German presence in Israel is not a recent phenomenon and the motivation for big German corporates to go to Israel are well-known: according to a study by the German Israeli Chamber of Commerce, German firms mainly invest in Israel to access the local innovation market. In fact, about 50% of German FDI into Israel is innovation-seeking. The rationale for leading German industries is to keep up with technological revolutions and shape the digital future in the face of fierce global competition. Especially in the automotive, smart mobility, and cybersecurity sector, disruptive Israeli technologies and Israeli know-how hold important opportunities for the German economy.
However, the famous German “Mittelstand” companies (SMEs) still remain underrepresented in the Israeli market, despite the recognized huge mutual potential. In an increasingly competitive world, where disruptive technologies threaten the survival of traditional industries, German Mittelstand companies must open to external impulses.
The Bertelsmann foundation (2017), in their study on the topic, have identified five modes of engagement that German companies chose when starting activity in Israel: 1. Opportunistic exposure (e.g. marketing, distribution, or production) 2. Scouting 3. Establishing accelerators and incubators 4. Establishing R&D activity 5. Strategic investments and mergers and acquisitions (M&A).
The GISEP, which is named in the Bertelsmann study as one of the engagement resources for German companies, provides the first point of contact for those aiming to get in touch with the Israeli startup- and innovation scene. Amongst other things, the GISEP facilitates B2B contacts by organizing sector- or topic-specific events and workshops and bringing interesting Israeli startups to fairs and congresses in Germany. In addition, we provide a network of ambassadors in Israel, who have extensive knowledge of the local ecosystem.
The list below shows three startup hotspots in Israel identified by the GISEP, each with its own industrial focus. For more information on the local activities and players, please click on the respective city.