After steering clear of overseas trade missions in his first 18 months on the job, Governor Charlie Baker now appears poised to travel to Israel with business leaders later this year.
Israel’s population isn’t much bigger than that of Massachusetts, and the country doesn’t rank in the state’s top 20 markets for exports.
But proponents say Israel, like Massachusetts, punches above its weight class, the two places’ world-renowned startup sectors are natural matches, and this state has much to gain from Israel’s expertise in cybersecurity. There’s a common language and, to a significant extent, a shared heritage.
Six Baker aides trekked to Israel in June, on a visit particularly focused on cybersecurity. Baker didn’t attend. But the June trip could help lay important groundwork for when Baker does go, likely on the administration’s next scheduled trip there in December.
“There’s a really strong case to be made for why it’s so economically important,” said MassChallenge chief executive John Harthorne, who hopes to join the trip. “They create this opportunity to interact with high-level leaders on the other side that I wouldn’t get at a tiny nonprofit startup. I just don’t have the access. . . . The governor’s presence makes a difference.”
Baker’s staff still won’t confirm whether the December trip is on his calendar, although the governor’s attendance is widely expected. Spokesman Tim Buckley would only say that the administration is studying a potential trade mission to Israel and that any such trip would not be taxpayer-funded.
Patrick’s trips to Israel were credited with spurring the arrival of El Al’s nonstop flights between Boston and Tel Aviv. And his 2011 trade mission was considered instrumental in the decision by Israeli water purification company Desalitech to open a headquarters in Newton, as well as Israeli digital health firm EarlySense’s choice of Waltham over Ohio for its main US office.
Andrew Cassey, an economics professor at Washington State University, said it can be difficult to calculate the long-term benefits of these missions. That’s largely because it’s hard to know whether a subsequent business deal or corporate expansion would have happened anyway.
These sojourns certainly are not unusual: Cassey studied a decade-long period starting in the mid-1990s and found about 500 trade missions led by governors nationwide, with more than 40 states launching at least one.
“Governors tend to go to the places where there are already strong relationships,” Cassey said.
Business leaders say it’s particularly important that the governor personally participate in the trips, rather than send emissaries.
A governor’s trade mission can close deals and open doors. These trips create deadlines to finalize a business deal or an expansion plan, to ensure the politicians have success stories to unveil during their tour. And a governor, as the state’s most prominent elected official, can line up in-person meetings with hard-to-get political officials and business executives.
“When the governor goes, it frees up officials on the Israel side,” said Udi Mokady, chief executive of CyberArk Software, an Israeli cybersecurity business with a headquarters in Newton. “It creates a more impactful image.”
Mokady cochaired the June mission to Israel. He said CyberArk picked the Boston area for its overseas expansion in 2001, in part because of the density of talent here, the proximity to investment firms, and the quality schools. Time-zone proximity gave Massachusetts the edge over Silicon Valley. The company employs nearly 200 people here today.
And Harthorne had Israel in mind almost from the inception of MassChallenge, the Boston-based startup accelerator. The reason? Israel’s startup ecosystem is one of the strongest in the world, Harthorne said, and the startups there are eager to find a way into the US market. MassChallenge recently opened a new Jerusalem office, with enough room to eventually accommodate up to 100 startups.
The New England-Israel Business Council has played a key role in building these business connections and playing them up in the public eye.
Board member David Goodtree sees important similarities between the innovation economies in the two places: diverse sectors that include life sciences, information technology, and data storage. He said some of the Boston area’s biggest companies, including Akamai Technologies and EMC Corp., contain some Israeli DNA, either passed on from a cofounder or through intellectual property.
Yehuda Yaakov, consul general of Israel to New England, said Patrick’s trips strengthened those ties. He’s hopeful that Baker’s trip can build on that groundwork.
“He has said he’s going to Israel sooner rather than later so I’m confident it’s going to happen,” Yaakov said. “We’re a small country, [but] we’re bursting at the seams with talent. That talent is looking to expand all the time.”
In total, Patrick’s 10 overseas trade trips during his eight-year term added up to nearly $1.6 million, almost entirely funded by quasi-public agencies.
In the case of the Baker administration’s June excursion, Combined Jewish Philanthropies, not a state agency, picked up the $25,000 tab for five of the six Baker aides who attended. Among those in attendance were Assistant Economic Development Secretary Katie Stebbins, Deputy Economic Development Secretary Carolyn Kirk, and Information Technology Office Director Mark Nunnelly. (Nunnelly paid his own way.)
Combined Jewish Philanthropies also helped fund a trip led by Senate President Stanley Rosenberg in December.
From a good governance perspective, Common Cause Massachusetts executive director Pam Wilmot said it’s usually better for these trade missions to be funded through the state budget and not an outside source, to avoid the potential for a conflict of interest. “The danger when you have third parties paying is that they may want something in return,” Wilmot said, “or that’s the appearance that is given.”