Within a 3-hour flight from the UAE and often referred to as the “Startup Nation,” Israel has steadily captured the global spotlight with its innovative prowess, entrepreneurial spirit, and thriving business ecosystem. In September 2020, the UAE and Israel signed a historic peace agreement – the Abraham Accords – which normalises diplomatic relations and trade between both nations (along other countries in the region including Bahrain).
In recent years, coupled with the signing of the Abraham Accords, Israel has become a magnet for businesses, investors, startups, and multinational corporations seeking to tap into its vibrant tech landscape. This innovation has led to breakthroughs in various sectors, including cybersecurity, biotechnology, agri-tech, and artificial intelligence.
Countries such as the UK for instance, shares strong trade ties with Israel. Bilateral trade agreements and the UK’s engagement with Israel’s business landscape has been fruitful, resulting in mutual benefits and thriving partnerships and increased export-import activities, benefiting both economies. Total trade in goods and services (exports plus imports) between the UK and Israel was GBP 7.3 billion in the four quarters to the end of Q1 2023.
The UK and Israel collaborate extensively in the tech sector. British companies have invested in Israeli startups, and joint research initiatives have accelerated innovation in various tech domains. Additionally, British financial institutions and businesses have also found opportunities to engage in Israel’s thriving fintech ecosystem, sharing expertise and supporting the growth of local startups.
As Israel’s high-tech sector continues to be the largest and fastest growth engine in the Israeli economy (responsible for 48.3% of all Israeli exports in 2022), other areas & sectors offering growth opportunities where UK SMEs and exporters could lend their expertise include,
- Cybersecurity
A tight economy is usually accompanied by increased fraud and cyber-attacks. Israel is renowned for its cybersecurity expertise, with many of its firms providing cutting-edge solutions to global challenges. The country’s cybersecurity startups have garnered international attention for their innovative approaches to safeguarding digital assets. Nevertheless, user adoption and conversion has become even more critical in this market, with businesses looking for solutions that can reduce friction for their end customers in order to prevent any sources of churn.
- Agri-tech Innovations
Israel’s unique agricultural challenges include extremely hot weather, insufficient natural fresh water sources and unsuitable soil. Given its arid climate and limited resources, Israel has pioneered agri-tech solutions that optimize water usage, crop yield, and sustainable farming practices. Opportunities exist for UK SMEs able to provide solutions into those areas, as these innovations are sought after by countries facing similar challenges.
- Life Sciences and Biotechnology
The Israeli life sciences industry can generally be divided into four major sub-sectors: digital health, medical devices, biotechnology, and pharmaceutical therapeutics. The country’s life sciences industry is dominated by small scale start-ups. For instance, Israel’s strong emphasis on research has led to significant advancements in biotechnology and life sciences.
The country’s biotech startups are at the forefront of developing groundbreaking medical treatments and technologies. Additionally, public institutions such as hospitals and universities utilise commercialisation companies (TTOs) to seek out, develop, and market the know-how accumulated by small scale start-ups to turn patents into commercial products.
Multinational corporations have recognized Israel’s potential and actively seek partnerships with startups and research institutions. These collaborations drive innovation and offer startups access to resources and global markets. The UK’s success in trade and investment within Israel exemplifies the benefits of cross-border collaboration. As both nations continue to strengthen their ties, the future holds exciting possibilities for UK SMEs and businesses seeking to tap into Israel’s dynamic business landscape and drive global innovation forward.
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