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Remarks at U.S.-Israel Business Initiative Summit

Tuesday, October 19, 2010

Commerce Secretary Gary Locke
Remarks at U.S.-Israel Business Initiative Summit

Good morning.  I’d like to thank the U.S. Chamber of Commerce for hosting us this morning, and for organizing this conference. 

It’s a great pleasure to open this event with Israel’s Minister of Industry, Trade and Labor, Binyamin Ben-Eliezer. 

And it’s wonderful to see so many people here who have for decades helped make the U.S.-Israel trade relationship incredibly fruitful.

We’re here today to mark the 25th anniversary of the U.S.-Israel Free Trade Agreement.  This was the very first FTA the U.S. signed. 

It’s a model for what FTAs can mean for U.S. bilateral trade, and a reminder of how important free trade agreements are to helping U.S. companies sell more of what they make in overseas markets. 

It also has provided the foundation for what has become one of America’s most important economic and political relationships. Last year, our bilateral trade with Israel exceeded $28 billion, more than five times what it was in 1985.

And since 1995, when our FTA was fully implemented, nearly all tariffs on goods traded between Israel and the U.S. have been eliminated.

The U.S. and Israel have always shared the closest of ties.

Our democracies and commitment to freedom define us as nations, and our national interests, history and cultuers are closely intertwined. 

And increasingly, we’ve come to share another common characteristic: a powerful dedication to empowering our innovators and entrepreneurs so they can continue to create high-tech goods and services, and provide well-paying, sustainable jobs.  

Israel’s high-technology, biotech and clean energy industries have literally transformed the country’s economy over the past two decades. 

Today. . . .

  • Israel has more high-tech start-ups per capita than any other nation on earth;
  • Roughly 100 American companies have R&D centers in Israel, and
  • More than 70 Israeli companies are traded on the NASDAQ exchange – the third largest number from one country, behind only the U.S. and China.

The values both our nations promote--embodied in our economies and political systems--have only drawn us closer. 

Building on this cooperation is going to be key if we’re going to ensure common prosperity in the years ahead.

Because as we’ve seen over the past couple of years, the world’s economies are increasingly interlinked.  

A crisis in one country can affect economies all around the world. 

In the U.S., the effects of the worldwide recession are still being felt. But today, for all the challenges our economy continues to face, we are moving in the right direction.

After shedding jobs for 22 consecutive months, the private sector has now added jobs for nine months in a row, and we’ve seen positive GDP growth for four straight quarters.

Of course, the recovery is still too slow, too many people are still out of work.  And more work needs to be done.

But, as we emerge from the recession, the question is:  where do we go from here?

The answer can’t be backwards, back to an economy fueled by consumer debt and real estate speculation.

For this administration, rebuilding and re-tooling includes a renewed focus on trade.

The National Export Initiative the President announced earlier this year seeks to double U.S. exports within five years while supporting several million new jobs. 

It will expand the U.S. government's export promotion efforts in all its forms.

It will help improve access to credit, especially for small and medium-sized firms that want to export, from our export assistance centers in the U.S. to our Foreign Commercial Service officers in more than 80 countries around the world.

And under the NEI, we will continue to increase the government's focus on knocking down barriers that prevent U.S. companies from getting free and fair access to foreign markets.

But as we work to rebuild America’s economic foundation, we understand that for a developed country to take full advantage of the opportunities presented by the 95 percent of the world’s consumers outside our borders, our commitment to trade must be met by a commitment to fostering innovation.

That’s why, under President Obama’s leadership, we have focused on reinvigorating the building blocks that lead to discovery and invention.  

As a share of GDP, American federal investment in the physical sciences and engineering research has dropped by half since 1970.

Importantly, last year’s Recovery Act included $100 billion to support groundbreaking innovations in diverse fields, from research in life sciences and healthcare IT, to clean energy, smart grids and high-speed trains.

President Obama also announced a National Innovation Strategy, which among other things, called for doubling the budgets of agencies such as the National Science Foundation, so they could better support basic research at our nation's universities.

In Israel, technology has changed the face of the economy, offering new job opportunities to thousands of engineers and scientists and putting a premium on well-educated workers. 

For economies like those in Israel and the U.S., that want  to continue to thrive in the 21st Century, we must get better at connecting the great ideas to the great company builders.

And one of the soundest ways to ensure innovation is by supporting Innovation Clusters.

Clusters help create high-growth companies that can take a great idea and quickly turn it into a thriving company with incredible growth potential – companies that are referred to as “gazelles”.

As it turns out, “gazelles” thrive in areas as far apart as Israel and the United States.

They live in science and technology parks, laboratories, business incubators—places where entrepreneurs, scientists, product developers, and venture capitalists are clustered together and can work collaboratively. 

Places where innovations can not only be developed, but also brought to market.  Where new businesses have a chance to grow.  Where entrepreneurs—even the ones who at first don’t succeed—have a chance to try, try, and try again.

In the U.S., we have regional clusters in Silicon Valley, North Carolina’s Research Triangle and along the Route 128 Corridor in Boston.  

And the Commerce Department is investing millions in matching funds to help promote regional clusters in every part of the country.

The president’s 2011 budget included $75 million for the Commerce Department to implement a federal clusters strategy.

Israel is already far along in reaping the rewards of clusters. 

Some would say that, for all intents and purposes, Israel is one big cluster. 

But you can see them at work near the Technion, the Weizeman Center, and Hebrew University, to name a few of the better known ones – anchor institutions that have helped populate Israel’s innovative economy with hundreds of success stories.

Going forward, it’s critical to both our economies that our entrepreneurs and businesses continue to work together to solve some of the world’s most important challenges.

The U.S. and Israel have some of the most creative and talented entrepreneurs on earth.  We are filled with people who have that essential ingredient every successful entrepreneur must have. . .

. . . It’s a spirit of risk-taking, whether you call it “moxie” or “chutzpah,” that animates entrepreneurs to achieve what few others can imagine. 

It’s what drives an entrepreneur like Shai Agassi to take on some of the most entrenched industries in the world – automakers and oil and energy companies – to create a car that runs exclusively off batteries.

This entrepreneurial spirit also is what inspired Israel’s Given Imaging to pioneer the PillCam, which can be swallowed and transmit radio images from a patient’s gastrointestinal tract so doctors can analyze it.

This innovating spirit is not unique to Israel or the United States, but it’s a common, major characteristic of both our peoples.

And it’s a big reason why early next year, the Commerce Department will lead a trade mission to Israel, to focus on a wide array of Israeli companies, including those in the clean tech and healthcare technologies sectors.

These are sectors that hold incredible potential for both U.S. and Israeli companies. And this trip, along with the U.S. Chamber of Commerce’s U.S.-Israel Business Initiative, will be an important step in introducing innovative small and medium-sized U.S. companies to potential partners in Israel.

In closing, entrepreneurship is something Israel and America share.  It’s in our DNA. 

We have a propensity for thinking outside the box and working collaboratively on new ideas and innovations.  These are the hallmarks, the necessary predicates to an entrepreneurial society.

It is a testament to both our nations, and will serve both of us well in the years to come. 

These shared values add another layer to an already deeply intertwined political, cultural and economic relationship. 

Thank you.