The hundreds of billions of dollars in the stimulus plan of President Barack Obama can not only help US companies, but also foreign enterprises that believe they can help the US taxpayer as much he or she can help them. However, Minister for Economic Affairs at the Israeli Embassy in the US Asaf Vitman warns that Israeli companies not to get their hopes up too high.
What are the chances of Israeli companies getting in on the 21st century equivalent of the Gold Rush?
Vitman: "The chances are small. In many cases, Israeli companies have nothing to look for in the US stimulus plan because they have no substantial foothold in the US, or because they have no relative advantage in the most sought-after technologies in the plan, such as mass-transit technologies.
"What is driving the Obama administration is the immediate availability of a proposed project. The administration wants to see immediate fruits, sometimes within months, in terms of the ability to create new jobs. An Israeli company that has no established presence in the US, no connection with a particular state, or strong collaboration with a US company, will not meet this basic criterion, even if we say that it has attractive technology. An Israeli entrepreneur who has only just begun to think about participating in the stimulus plan is almost certainly wasting his time. At least a year will be needed to begin to participate in the system, and that's too long for the Obama administration."
Vitman added, "One who works before the Sabbath, can rest on the Sabbath. If you have a functioning infrastructure in America, you have the prerequisite for playing in the game."
Vitman said that the industries with the greatest potential in the stimulus plan for Israeli companies with a significant presence on the field, are medical systems automation and related technologies, and renewable energy technologies.
The Obama administration is strongly pressing on restructuring the US healthcare system, with the lowering of its operating costs a key objective, because these costs are taking huge chunks of the US federal budget, as well as corporate ones. A major reason for General Motor Company's (NYSE: GM) decline is its spiraling healthcare costs for employees and pensioners.
Vitman says, "The technology establishment of Israeli healthcare services is far more advanced that in the US. In Israel, nearly every doctor works with a computer. Not so in the US. In Israel, you can get the results of a blood test on your computer. That's not yet possible in the US. There are Israeli companies that know how to package and interface technologies that can bring the US healthcare system into the 21st century. DB Motion Ltd. and eWave Ltd., which computerized Israel's leading health funds, come to mind."
Vitman says that Israeli companies with relevant medical computerization technologies have large business potential, if only because the US has "countless" medical insurers, compared with Israel's four health funds.
Vitman says that renewable energy will probably also be a strong basis for Israeli activity in the US, especially given the cooperation agreement between the Department of Energy and the Ministry of National Infrastructures, for a joint venture that receives $4 million in funding from each party.
Geothermal energy developer Ormat Industries Ltd. (TASE: ORMT) and its US subsidiary Ormat Technologies Inc. (NYSE: ORA), as well as US-Israeli thermosolar systems maker Brightsource Energy Inc. are two renewable energy companies that fit in well with the Obama administration's plans.
Published by Globes [online], Israel business news - www.globes-online.com - on April 7, 2009
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