If, in the first decades of Israel’s existence,American Jewish support was through charitable contributions, tradeand investment is now the name of the game.
California high-tech companies and investors areleading the way in boosting the Israeli economy by establishingsubsidiaries and infusing venture capital.
Last year, despite the ups and downs in the peaceprocess, the economic indexes tracking trade between the Golden Stateand the Jewish state were up, says Baruch Littman, executive directorof the California Israel Chamber of Commerce.
In 1997, California exports to Israel reached $668million, up 10 percent over the previous year’s mark, with industrialmachinery, computer equipment, and other electronic and electricalequipment accounting for $427 million.
Direct investments in Israeli companies and stocks(more than 100 Israeli companies are listed on the major U.S. stockexchanges) showed similarly robust growth, with two of the majorplayers, Shamrock Holdings and Israel Emerging Growth Fund,headquartered in Los Angeles. The value of stocks held by the IsraelGrowth mutual fund rose 18 percent in the first three months of thisyear and 29 percent in 1997, reports fund manager BennettZimmerman.
Precise figures for Israeli exports to Californiaare not available, but they are roughly in balance with the country’simports from California, says Linda Ben Shoshan, Israel’s consul foreconomic affairs in Los Angeles.
Such Silicon Valley giants as Intel and AppliedMaterials are setting the pace by establishing branches and buyingcompanies in Israel, each investing about $1 billion.
But in a notable trend, capital and corporateexpansion is now flowing from Israel to California. For instance,Israel’s New Dimension Software and Magic Software have recently setup their U.S. headquarters in Irvine.
Indeed, Israel is now second only to the SiliconValley in the number of start-up high-tech companies, which ledElectronic Business magazine to describe the country as “Mazeltech onthe Mediterranean.”
California took an early lead in formalizing traderelations with Israel by setting up a state-run office in Jerusalem,headed by Sherwin Pomerantz.
Richard Gunther, an early large-scale investor inIsraeli companies, says that his approach was ruled both by the heartand the head.
“First, you invest from the heart because it’s thebest contribution you can make in strengthening Israel,” he says.”Then, you invest from the head because, besides helping Israel, yourealize you can make a substantial profit.”