March 14, 2004, Updated September 13, 2012

BIRD – the Israel-U.S. Binational Industrial Research and Development Foundation – has been promoting bilateral cooperation between the United States and Israel since 1977.If you want to succeed in business, you have to change with the times. And the BIRD Foundation, which invests funds in promising joint ventures between Israeli and American companies, can attribute much of its success over the past 26 years, to keeping its eye on the market.

“Little has changed at BIRD regarding the way in which we operate,” said Dov Hershberg, BIRD’s executive director. “What does change is the areas that we focus on. We’re not afraid to change, and we’re not afraid to take risks.”

BIRD – the Israel-U.S. Binational Industrial Research and Development Foundation – has been promoting bilateral cooperation between the United States and Israel since 1977. BIRD provides a maximum of $1 million to projects involving American and Israeli partners. The foundation takes no equity in the companies with projects in which it invests, but receives repayment as a percentage of reported sales revenue when products reach the market.

Founded in 1977, it originally invested in a range of industries, but primarily in high-tech ventures, focusing on communications technology.
But when the high-tech bubble burst in the mid-1990s, it shifted its focus, balancing its technology projects with those in the life sciences, at a time when the number of medical and biotechnology companies in Israel was dramatically increasing.

By 2002, life sciences became the most highly represented sector, receiving about 30 to 40 percent of all grant funding. And now, with homeland security a rapidly growing sector of the market in which Israeli expertise is highly respected, BIRD is shifting its attention in this direction.

At its most recent meeting, BIRD announced its intention to invest over $1 million in Homeland Security projects. Its major Homeland Security projects are those with proven success in software applications, databases, data compression, artificial intelligence, and biometrics.

Applications in this area included the project between Mitam (Israel) and SITA (U.S.) – kiosks for direct purchase of international airline tickets with purchaser ID verification, verification with Ministry of Interior databases, and biometrics check.

Another sign of BIRD’s growing attention to Homeland Security is an upcoming seminar. On March 21, BIRD host a seminar for Israeli companies on Homeland Security Technology & Markets and building Strategic Partnerships – Your Door to the U.S.

Hershberg will speak on ‘Homeland Security – Matching Advanced Technologies to Needed Applications.’ Other presenters include Andrew Siegel – Senior VP, Corporate Development, InVision Technologies, Inc., Koby Huberman – Senior VP, Corporate Business Development, Nice Systems Ltd., Tal Keinan – Director, Homeland Security Technologies, Giza Venture Capital LTD, and Dr. Timothy D. Ringgold – CEO, Defense Solutions, LLC

BIRD’s board of directors meets twice a year to review applicants and make final determinations on which projects will receive funding. The six-member Board includes three members from both Israel and the United States Israel’s representatives include the Chief Scientist of the Ministry of Industry, while U.S. representatives include senior personnel from the State Department, Treasury Department and the National Institute of Standards and Technology.

At BIRD’s most recent meeting last December, a total of $9 million was invested in areas including life sciences, communications, electro-optics, and other areas. The 10 new projects are worth a total of approximately $23 million.
In addition to homeland security, BIRD is currently focusing on nanotechnology and advanced areas of optical communications, burgeoning areas in which it feels that Israeli companies have an edge.

Hershberg is proud of BIRD’s consistent record, even through times that have been difficult regarding foreign investment in Israel, noting that they continue to attract corporations on the level of Phillips, Kodak, Scientific Atlanta and others, to form partnerships with Israeli companies for major strategic development projects, with BIRD support.

He maintains that companies have come to trust BIRD’s evaluation of the market potential for new Israeli companies and their understanding of the business environment. BIRD has granted more than $200 million to nearly 700 projects industrial projects. U.S. companies, large and small, are eager to take advantage of Israel’s innovative technologies, and often choose to seek appropriate partners through BIRD, rather than alone, because BIRD is willing to share the risk with them.

BIRD is continually active in its efforts to play ‘matchmaker’ between Israeli and U.S business, implementing trade missions, sometimes in conjunction with the U.S. embassy, holding teleconferences, and using own Web site to market organizations that are seeking suitable partners.

To evaluate projects, BIRD counts on its own experience as well as the technological expertise from the projects evaluation group associated with the Israeli Office of the Chief Scientist of the Ministry of Industry and Trade and the National Institute of Standards and Technology of the U.S. Department of Commerce.

The agency relies on straightforward criteria when deciding where to spend its money. The most important factor it looks at, as does any investor, is its potential for generating revenue. As well as the potential of the project, it looks at the ability to provide product marketing, the presence of a clear marketing plan, uniqueness of the product and the potential for both sides to profit when examining a project.

“Though there are different ways to measure success,” said Hershberg. He noted examples in which the specific BIRD project may not have become profitable, but led to fruitful partnerships.

“A company called Galileo realized that it needed to shift its focus over the course of the project, and the changes it made helped shape the company and make it stronger – that’s a success as well.”

Hershberg said that there are currently “huge opportunities” in Israel. “The downturn we have experienced was not as much attributable to the security situation, but because of the world economic situation. As the international picture improves, there are clear signs that things are improving here: Israel has been and remains a haven for new technologies.”

The silver lining on the cloud of the recent difficulties, he says, is a confidence by foreign investors that the Israeli companies that have managed to ride out the troubled times and remain in business are “stronger than before.”

He is also excited by renewed signs of life in a project that BIRD initiated six years ago – with the goal of funding projects that involve three-way cooperation between Israeli, American, and Jordanian companies.

“The last three years have been politically difficult and much of the work that was started was essentially frozen,” Hershberg said. “But it seems to be reawakening once more, even though it is at a very early stage. The atmosphere is better now, and the program is still alive, although for a long time, the Jordanian government didn’t promote it actively for a while. Now Jordan is interested in strengthening its ties with the United States and this project is one way of doing so.”

Projects with potential include several multimedia initiatives in the Arabic language, and a desalination project, Hershberg said.

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Jason Harris

Jason Harris

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