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Cleantech Firms Looking to Find a Few Good Matches
Just as it has excelled in the biomedical and information-technology fields, Israel has become an acknowledged world leader in producing breakthroughs in an emerging concentration known as "cleantech" -- producing more environmentally friendly ways to do many of the things associated with modern life.
The cleantech sector encompasses wind power, solar thermal energy, water-recycling and purification, and the conversion of waste into power. Many have attributed Israel's prowess in the field to its longstanding need to make the most out of its limited natural resources.
According to BusinessWeek, the Jewish state recycles some 70 percent of its waste water, the highest percentage of any nation in the world.
But in order to grow from an idea to a reality, most Israeli startups have to look abroad for markets -- since Israel doesn't have enough people to support a large domestic market -- as well as for financing.
At the same time, Pennsylvania has been trying to position itself as a center for "green" jobs and a place that attracts investments from foreign companies.
Hoping to make a few good shidduchs -- and green ones, at that -- the America-Israel Chamber of Commerce Central Atlantic Region and Israel's Economic Mission to North America organized Philadelphia's first "U.S.-Israel Cleantech Conference" on Sept. 15 at the University of Pennsylvania.
"Climate change and environmental challenges are the primary issues that will shape our way of life and influence society over the next century," Binyamin Ben Eliezer, Israel's minister of industry, trade and labor, told the roughly 200 people who attended the daylong program.
Representatives of 15 Israeli cleantech firms were selected by the Israeli government to take part in the conference; similar programs were also held last week in New York and New Jersey. Most of these companies have grown beyond the seed level and already have a product. Here, they had the opportunity to mingle with potential investors and representatives from large-scale U.S. corporations, such as Lockheed Martin.
Shmuel Shuster, who covered Wall Street and the hi-tech sector for the Israeli finance publication The Marker before recently moving to Philadelphia, explained that the Israeli firms were here for several reasons: to solicit more capital to further develop their product, to find customers, to team up with strategic partners to help them expand in the U.S. market or, in some cases, to find a large enough company willing to buy out their ideas.
'A Real Opportunity'
Shuster said that a criticism of Israeli business culture has been that too many founders sell their ideas quickly before allowing their companies to grow into something larger and more lasting. But, he said, this is beginning to change, and conferences such as these can help more companies find the means to grow into mature entities.
"The bigger American companies, they don't know these companies," Shuster said of the Israeli start-ups. "They never heard of them. And this is a real opportunity for the Israeli companies to introduce themselves."
Ian Kaplan, CEO of Variable Wind Solutions, a Tel Aviv-based firm that works to make wind turbines more cost-efficient, remarked that it's always good to network: "Like they say, 'You raise money when you can, not when you need it.' "
Kaplan and others acknowledged that it was difficult to find investors in recession time. But, he added: "I think you are starting to see the light at the end of the tunnel." With all the federal funding available, "it helps reduce the level of risk and makes investors feel more comfortable."
Debbie Buchwald, executive director of the America-Israel Chamber of Commerce's Mid-Atlantic region, said that it's far too soon to determine whether any actual deals came out of the conference; multimillion dollar transactions take time to hammer out.
"Relationships were formed that can lead to clean energy development," attested Buchwald, adding that she'd heard several of the meetings had been promising. "I'm sure there were numerous connections made that I'll never even know about."
Beth Cohen, an event co-chair who directs emerging growth services at the Philadelphia law firm of Blank Rome, said that officials in Philadelphia and Harrisburg, Pa., are working to coax foreign cleantech companies to do business in the Keystone State -- and that Israel is very much on their radar.
Cohen was one of about 20 business leaders who accompanied Pennsylvania Treasurer Rob McCord on a trip to the Jewish state over the summer. She said that other regions, such as the Boston and Atlanta areas, are aggressively courting Israeli cleantech firms to establish a presence, and Pennsylvania has stepped up its efforts in the last few years in that vein.
"Pennsylvania has more representatives in foreign countries than any other state in the U.S.," said Cohen. "Pennsylvania really understands at the state level that Israel is a country with cutting-edge technology."
Daniel Desmond, the former Pennsylvania deputy secretary for energy who served as an honorary conference chairman at the recent event, said that the federal stimulus dollars directed toward green initiatives have presented a long-awaited opportunity for advancement in the field.
"Here in Pennsylvania, if you are in the cleantech business, it is clearly the spring of hope," he said. "Government is paying attention, the private sector is paying attention, and, at long last, the marketplace is paying attention."