BOSTON (JTA) -– Israeli-founded companies based in Massachusetts brought in $9.3 billion to the state last year, continuing to outpace the state’s economy in overall revenue and job growth, according to a new report released Wednesday by the New England-Israel Business Council.
When factoring in the impact of spending on goods and services, such as office space, marketing and other business needs, the figure nearly doubled to $18.1 billion, the report found.
Some 200 companies employ nearly 9,000 people in Massachusetts, up from some 6,600 three years ago, when the New England-Israel Business Council released a similar study. Both studies were conducted by Stax Inc., a strategic management consulting firm, with support from the Combined Jewish Philanthropies of Greater Boston.
In that time, the revenue from the Israeli-founded companies grew twice as fast as the Massachusetts economy overall and now represents nearly 4 percent of the state’s entire economy.
“That’s a big deal,” said the report’s author, David Goodtree.
“Israeli-founded companies are a major driver of the [Massachusetts] economy and are bigger than before,” he told JTA in a phone conversation ahead of a news conference on Wednesday morning at MIT’s Sloan School of Management.
Massachusetts Gov. Charlie Baker was expected to attend the news conference, as were several hundred business leaders including Lior Div, the CEO of Cybereason, an Israeli-founded cybersecurity firm now based in Boston.
While data storage companies and the life sciences have been significant for several decades, the fastest growing sectors for Israeli-founded firms in Massachusetts include cybersecurity as well as companies that focus on the tools to create apps, Goodtree found in the study. Other strong sectors include water technology, eHealth and 3-D printing.
“Israeli businesses play a leading role in our state’s robust economy in both tech and life science, and we greatly value our special relationship,” Baker said in a statement. “The future looks bright for the Commonwealth and Israeli companies to bring even more world-changing innovations to global markets together.”
Israel’s consul general to New England, Yehuda Yaacov, said in a statement that the economic relationship is a model of collaboration for other states.
But Goodtree cautioned that competition from other states is fierce. Since 2010, governors from 30 states have brought trade delegations to Israel, the report noted. The chief competitors are New York and Silicon Valley in Northern California.
Goodtree said the advantages for Massachusetts are in its stronger talent pool and lower cost of doing business, but this is not known widely enough in Israel.
The report also noted that the Israeli-founded businesses in Massachusetts secured nearly $1.2 billion in venture capital investments between 2013 and 2015, representing 10 percent of venture investments in the state. Nearly 70 percent of that money came from out of state, including from Israel and Silicon Valley.
“The Israel-Massachusetts business relationship started over half a century ago and has grown ever since,” said Dan Trajman, president and CEO of the New England-Israel Business Council, said in a statement. “Looking towards the future, we can see in the next several years the addition of one hundred Israeli founded companies contributing to the local economy with the support of the innovative ecosystems on both sides of the pond.”