Barry Bogage, executive director of the Maryland Israel Development… (Baltimore Sun photo by Kim…)
The Maryland/Israel Development Center sees itself as a matchmaker — not of a romantic kind but an economic one.
For the past 19 years, the nonprofit group in Baltimore has been connecting Maryland companies with Israeli partners to promote trade and investments.
Most recently, MIDC helped secure funding for two Maryland companies to do business with Israeli firms through the Israel-U.S. Binational Industrial Research and Development (BIRD) Foundation. Direct Dimensions is a 3-D imaging technology firm in Owings Mills and Ariadne is a biotech software company in Rockville.
This year, MIDC also established a for-profit arm to invest in Israeli startups through a new venture capital fund.
The Baltimore Sun spoke with Barry Bogage, founding director of the Maryland/Israel Development Center, about the state's economic relationship with Israel and the venture capital fund.
What role did MIDC play in helping Direct Dimensions and Ariadne secure funds from BIRD?
We represent the BIRD Foundation in the state of Maryland. By representing them in the state, we try put together projects from Maryland and Israeli companies and get financial support from the BIRD Foundation. We gather a fee from the BIRD Foundation for successful deals.
What we did with Direct Dimensions and Ariadne was to connect them with the BIRD Foundation and help BIRD find partners in Israel. They each received $900,000.
We've done that with several other projects over the years. …
The BIRD Foundation uses a handful of organizations like us. We're closer to the companies in our region and can both market Israel and the BIRD Foundation to our companies a lot better than BIRD itself can do.
What is the state of Israel's investment in Maryland?
The best way to answer that is we have 20 some Israeli companies with offices in Maryland. It's always a fluctuating number because companies get merged or acquired or go out of business. …
In the '90s, we had 40 Israeli companies here. That's when money was fast and loose so you had a number of startups.
We had a really big success about 10 months ago. [Israeli] wireless broadband company Alvarion is moving their U.S. headquarters to Montgomery County. They're moving 25 jobs here.
What makes Maryland attractive to Israeli companies?
The workforce, because we essentially have the workforce … in sectors that parallels what's strong in Israel.
The biomedical fields. You can't do better when you have [the Johns Hopkins University], [the University of] Maryland and the [National Institutes of Health]. They could find the scientific talent and business talent that understands the [scientific] talent. That is second to none.
And then in the IT world, the biggest customer is here. The U.S. government and all the government agencies and all the companies that service those in Maryland. The Census Bureau, NASA's Goddard Space Flight Center, NIH and the NSA.
You are looking for innovation and that's where Israel excels. It's a great place for them to do business.
Given the growing attention to investing in China and other emerging markets, why is the relationship between Maryland and Israel still important and relevant today?
It's because of technology. Israel has the second-largest venture capital market after the U.S., which is an expression of how much technological innovation is taking place, more so than the European countries.
Whenever anyone needs to look at innovation, they have to look at Israel.
There has been an international movement in the last decade to pressure large and institutional investors to divest themselves of holdings in companies that do business with Israel. Is it a challenge to get some Maryland businesses interested in working with Israeli counterparts?
There has been an Arab boycott against Israel for decades which only the Arab countries ostensibly adhere to. There is a lot of quiet trade between Israel and the Arab world.
Otherwise, there has been a lot of talk about divestment from Israel but it has not really materialized, especially from the U.S. There is more strident talk in some parts of Europe and while it has been unpleasant, it has not seriously affected the economy or investors.
Why did MIDC decide to open a for-profit investment fund with an Israeli partner, Trendlines, earlier this year?
The background is that Trendlines is a consultant firm in Israel, which has been our representative for 15 years. We've worked with them for a long time. We have a great relationship with them. They set up their own venture capital fund about six years ago. …
They've been doing very well. And a year or so ago, they wanted to raise another fund and we said we would like to get into this.