Israel is America's 13th largest FDI source

Oftentimes the impact of Israel on the Western world is large enough to amaze even those of us who live here and experience the economic miracle every day.

That’s the reaction many of us had this week when the U.S. Bureau of Economic Analysis (BEA) released foreign direct investment (FDI) data for 2016.  The figures show that Israel is the 13th largest source worldwide for foreign direct investment into the U.S. at $55.4 million, roughly equal to that of Belgium, Australia and Sweden.   What is even more impressive is that this is an astonishing 121% increase from 2015 and that Israel is the 8th fastest growing source of FDI for the U.S.

Total foreign direct investment into the U.S. in 2016 was $55 billion, which means that the total foreign direct investment in the U.S. now stands at $3.725 trillion, a 12.8% increase from 2015. This was driven by strong growth in a number of markets, including Canada, Ireland, Switzerland, Singapore, China and Israel.

The top 15 sources of FDI into the U.S. last year by UBO (i.e. Ultimate Beneficial Owner) were: 

(In Thousands of U.S. Dollars)

1.  United Kingdom $598,319

2.  Canada $453,641

3.  Japan $424,347

4.  Germany $372,778

5.  Ireland $279,647

6.  France $267,573

7.  Switzerland $196,595

8.  The Netherlands $191,937

9.  Singapore $73,677

10.  Spain $67,179

11.  China $58,154

12.  Belgium $55,940

13.  Israel $55,362

14.  Australia $54,307

15.  Sweden $52,730

To be sure, Israel’s numbers were helped by Frutarom’s purchase of New Jersey-based Grow Co. Inc. for $20 million.  Nevertheless, there were plenty of smaller examples such as Omen Die Casting’s decision to build a 76,000 sqm production facility in southeast Indiana with a $7 million investment creating 100 jobs.

For a country that has been traditionally seen as one where early stage startups are eager to sell out to foreign buyers, the fact that Israel is engaged in foreign direct investment abroad demonstrates its maturity as an economic powerhouse in the region.   Note that in the list of the top 15 countries, Israel is the only one located in the Middle East.

While there is no telling whether these statistics suggest a growth trend that can continue, the numbers do attest to the fact that Israel, once again, punches significantly beyond its weight.

Sherwin Pomerantz has lived in Israel for 33 years and is president of Atid EDI Ltd., a Jerusalem-based business development consulting firm and a former national president of the Association of Americans & Canadians in Israel.