Israelis are responsible for a huge chunk of immigrant-founded high-tech companies in the U.S., and after years of concentration in Silicon Valley, they are finding a new hub in Boston.
Doron Reuveni is bracing himself for another freezing Massachusetts winter. The CEO of uTest, a start-up that uses the crowdsourcing model to offer a range of software testing services, is a member of a growing community of Israeli high-tech entrepreneurs living in the United States, many of them on the East Coast. “We pay a price for not living in Israel. Usually, it’s the weather and the lack of decent hummus,” quips Reuveni.
According to estimates, 150,000 Israelis, including entrepreneurs and their families, live in California’s Silicon Valley alone. Most work in leading technological firms, act as investors or work as investment bankers or attorneys.
Thousands more, like Reuveni, live on the East Coast – in New York, Massachusetts and other states. While many are chastised for living abroad, their involvement in high-tech usually benefits Israel, often through the establishment of R&D centers back home.
According to a joint study by researchers from Duke, Stanford and the University of California, Berkeley, Israelis living in America are the sixth most active group when it comes to founding start-ups in the United States. The study, entitled “America’s New Immigrant Entrepreneurs: Then and Now,” evaluated the rate of immigrant entrepreneurship in the U.S. from 2006 to 2012 and traced the complicated relationship between immigrants to the U.S. and their host country’s economic development.
According to the data, 3.5 percent of all companies started by immigrants in the U.S. between 2006 and 2012 had an Israeli at the helm. Thirty-three percent were founded by an immigrant from India; 8.1 percent by Chinese; 6.3 percent by British; 4.2 percent by Canadians and 3.9 percent by Germans. Adding to the significance of the study’s findings is the fact that all the other countries in the top six have a much larger ex-pat population in the U.S. than does Israel. Earning greenbacks, but no green card
The American researchers speak of a “reverse brain drain” – the return of entrepreneurs who gained experience and knowledge in the U.S. to their countries of origin. This is a trend that undoubtedly benefits the Israeli economy. The study found that one of reason entrepreneurs return to their home country is the difficulty they have obtaining a green card in the United States. “My partner has been waiting three years for a green card that will allow him to travel back and forth,” says Reuveni, “even though he’s an entrepreneur and a shareholder in a company whose investors are all Americans.”
