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December 23, 2013 6:02 pm

Analysis: U.S.-Israel Energy Bill Latest Example of Collaboration That Supports ‘Start-Up Nation’ Growth

avatar by Joshua Levitt

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2013 US-Israel Innovation Index. Photo: Screenshot.

2013 US-Israel Innovation Index. Photo: Screenshot.

While the American Studies Association announced a boycott of Israeli academics last week, the U.S. Senate on Friday signed a bipartisan U.S.-Israel energy bill calling for closer collaboration on resource development with the Jewish state.

Commenting on the move, Forbes columnist and OurCrowd partner Zack Miller said that it is these types of international collaboration agreements that have “revved Israel’s economic engine,” supporting the continued growth of the “Start-up Nation.”

“One thing that can’t be underestimated is the young country’s experience and roots in creating  international partnerships — cooperation that share and learn from the best Israel and the world can provide to help collaborate and accelerate progress internationally,” Miller wrote on Monday in Forbes.

Miller is a partner in OurCrowd, an equity crowd funding site for accredited investors in Israeli start-ups. Based in Israel, he meets frequently with delegations from other countries.

“These business types typically visit Israel for one purpose only: to learn how Israel has become a nation of start-ups and how they can return to their home countries and emulate the success we’re enjoying here,” Miller wrote.

Miller cited a study from the U.S. state of Massachusetts, which has sponsored several delegations to expand joint ventures in Israel. A new study by the New England – Israel Business Council said Israeli companies doing business in the state have generated over $6.2 billion in 2013, up three times in three years,  while employing 6,700 people in Massachusetts.

International educational collaboration has also boosted Israel. New York state’s Cornell University’s partnership with Israel’s Technion, led to Cornell NYC Tech, a two-year Masters degree program in connective media in conjunction with the Technion. Graduates will receive degrees from both prestigious institutions (not unlike the Kellogg School of Management’s program with Israel’s Tel Aviv University), Miller wrote.

“The program, like others of its kind, was developed to address the need for tech talent in New York City as the City’s financial and media world evolve along with the technology that shapes them. The future campus, to be set on Roosevelt Island, is no less ambitious,” he said.

Cooperation, until now, historically ended with the energy markets, Miller wrote: “For those interested in the global energy market, the old joke goes that Moses took a wrong turn bringing the Israelites to Israel. Israel has been scrappy economically in part because the country lacked its own natural resources. Instead , the young country has always focused on human resources to address its natural resources problem.”

But all that changed in 2010, he said, when “Israel struck gas — lots of it — and its find of natural reserves is reshaping economic and political policy in the region. Investors in Israel’s natural resources industry know that to fully extract value, Israel’s needed to partner with many companies, including US-based Noble Energy. It appears Israel has enough natural resources to become a net exporter — not only of ingenuity, this time, but also of a real commodity.”

Off the coast of Haifa, the Tamar field, Israel’s first major hydrocarbon discovery, is believed to hold over 10 trillion cubic feet of natural gas. On the international market, at $5 per thousand cubic feet, Tamar’s gas would be worth $50 billion.

The U.S. Senate energy bill, which passed its bipartisan committee and needs to go to the full Senate for a vote, was designed to pave the way for more U.S. firms to participate in Israel’s energy boom.

Miller also cited a study that shows Israel is the “U.S.’s #3 innovation partner, right behind Switzerland and Canada. So, as Israel, the Start-Up Nation, grows into its big-boy, Scale-up Nation shoes, other nations looking for its secret sauce can look directly to its partnering ability for guidance. Israel’s technology and start-up ecosystem have both benefited from and created global partnerships that work to support growth in Israeli ingenuity on a global scale.”

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