Can a “start-up nation” help create a “start-up state?” A stalwart group of advocates known as the Michigan Israel Business Bridge (MIBB) believes that linking the entrepreneurial talent of Israel with the manufacturing expertise and markets of North America, via Michigan, could have a significant effect on developing Michigan’s new economy.
Israel, dubbed the “start-up nation” by authors Dan Senor and Saul Singer, is maturing as one of the leading entrepreneurial cultures in the world. MIBB believes that Michigan stands to gain from this intellectual resource, while Israel gains from exposure to the markets and manufacturing capabilities of the United States.
MIBB, established in 2007 and based in West Bloomfield, introduces its members to opportunities through trade missions, expositions, monthly networking meetings, and one-to-one match-ups. Israel, a country which is smaller in geographic size and population than Michigan, has over 3,000 companies centered on life sciences, homeland security, alternative energy, water technology, and agro-industry, with more engineers and scientists per capita than any other country in the world, according to MIBB.
Co-founders Chuck Newman and Susan Herman initially hosted a dinner for Michigan state legislators in conjunction with a student exposition of Israeli business innovation at Michigan State University. The meeting introduced the idea of promoting a Michigan-Israeli business exchange. That led to discussions that formalized MIBB.
Although not widely publicized, Israel has made significant technological advances since the introduction of Jewish immigrants to Israel from the Soviet Union 20 years ago. Many were highly educated, skilled researchers and product developers who found a welcoming culture and economy, supported by the Israeli government.
“If there is one story that has been largely missed despite the extensive media coverage of Israel, it is that key economic metrics demonstrate that Israel represents the greatest concentration of innovation and entrepreneurship in the world today,” note Senor and Singer in their book, Start-Up Nation.
The influx of intelligence, cultivated by public-private entrepreneurial incubators, spawned a dynamic environment that “really changed the culture of Israel,” adds Newman. “But Israel needs to collaborate. It doesn’t have scale on its own. It doesn’t have markets. It has limited manufacturing capabilities. It has limited managerial capabilities. It’s really an innovation factory. We combine that with advanced manufacturing capabilities and the ability to distribute, market, and organize.”
Unlike the United States which has good relationships with trading partners in North America, Europe and Asia, “The neighbors that border Israel are not so friendly,” explains Pamela B. Lippitt, MIBB executive director. Israeli companies look to Europe or the United States for partners. MIBB creates the “connective tissue” that allows partnerships to thrive here, she adds.
Israel is the third largest generator of new patents in the world, says David Schreiber, chief strategist for Oakland County Economic Development and Community Affairs. “They have put a high emphasis on innovation. Connecting our companies with that innovation is a great way for us to innovate. They have a lot of start-up companies and a lot of great ideas. To grow they need to partner with established companies in the U.S. Certainly a great place to do that would be Michigan. One of the reasons it’s a good place for Israel is because we already have a lot of strong relationships, on a person-to-person basis, with Israel. That helps to facilitate those business connections.”
People in Michigan are much more likely to think of Israel as the Holy Land or a place involved in international strife, not as a potential business partner, says Joseph Ben-Gal, a West Bloomfield investor and MIBB treasurer. It’s perceived as a small country “not realizing, especially in the high-tech world where size doesn’t really matter, if you develop a great product and you deliver it into the hands of a big corporation, it can go into millions of cars.”
With a strong Israeli economy and the need for Southeast Michigan businesses to diversify, “We felt that this is a great opportunity for a win-win combination,” Ben-Gal says. “We see our role as putting them together in a room and facilitating the meeting, and they’ll know what to do.”
Some of the Southeast Michigan business relationships initiated or supported by MIBB include:
NanoMAG, in Ann Arbor, which has developed technology for providing magnesium with remarkable property, but the company needs a supply of magnesium and the expertise of a magnesium producer. NanoMAG developed a partnership with the Dead Sea Works, which mines magnesium out of Israel’s Dead Sea. That was facilitated by a $500,000 research grant from the BIRD Foundation, which supports U.S.-Israel business partnerships.
Solutions Recycling Services (SRS), in Dexter, which separates and purifies industrial fluid, is working with an Israeli company to cultivate high amounts of omega 3 oil from algae. The Israeli company cultivates algae, while SRS is developing a method of extracting omega 3 from the algae. The collaboration will expand to other cultivation sites in the United States.
A trade mission to Israel, sponsored by MIBB, helped develop an existing academic partnership between Oakland University William Beaumont School of Medicine with an Israeli hospital, which will lead to joint research and teaching opportunities. Other academic partnerships with Israel are also being developed with Michigan universities.
Powermat, a Commerce Township company that markets a wireless charging system with the same name, developed the product with Israeli technology.
MIBB is planning an automotive matchmaking event next summer for Michigan automotive suppliers looking for new technology for vehicle application and Israeli companies marketing their products to the North American market.
A trade mission to Israel led by then-Gov. Jennifer Granholm with MIBB resulted in a memorandum of understanding which included incentives for water technology collaboration, resulting in business partnerships in Oakland County. “If the MIBB had not been there, that meeting and those connections would not have taken place,” says Schreiber.
MIBB doesn’t only match existing enterprises with one another, it fosters relationships with start-ups on both ends, says Ben-Gal. “This is the perfect combination. The world they live in is the digital world. …They can find partners for their development work, [and] for licensing technology. High tech development is the engine in Israel and it is now becoming the engine in Detroit. …You look for places with a similar mentality, places where young entrepreneurs can take it all the way from zero to success. You cannot do it just by yourself in your basement any more. You need to collaborate with people in adjacent products and technologies.”
MIBB is a natural fit for the business culture of Southeast Michigan, given the large local Jewish population, Ben-Gal adds. “They are more open to listen. When you bring to their attention a business opportunity with an Israeli company, they’re more open, more familiar… They know it’s a thriving economy and that there is a very successful high-tech sector. It’s an easier introduction. But at the end of the day, it needs to be good business.”
As Michigan retools to compete in the new economy, initiatives like MIBB are certain to increase its competitiveness. Chuck Newman, founder of ReCellular, didn’t set out to start the nonprofit, which has taken much of his time and financial investment, but he’s seeing the return in business traffic. In fact, he envisions, eventually, a direct flight from Detroit Metro Airport to Ben Gurion Airport in Tel Aviv.
“I wanted to maximize the amount of good that we could do, not maximize the amount of money we could earn,” says Newman. “I love Michigan. I love Israel. And I love business. This is a triple play for me. It’s not giving financial reward — in fact quite the contrary, I put money into it. But the psychic award is amazing. I feel very well compensated.”
Dennis Archambault is a freelance writer and regular contributor to Metromode, Model D, and Concentrate.