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Foreign Investment: Pittsburgh's Business with Israel

Pittsburgh has a robust Jewish and Israeli community, with scores of programs, both social and academic, bridging the ocean. The relationship, however, is increasingly about business.



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In a city of bridges, Sagi Perel links Pittsburgh to Israel.

The Squirrel Hill resident, an Israeli-American with short brown hair and an easy smile, studied computer science and electrical engineering at Tel Aviv University. He came to Pennsylvania in 2005 to pursue his doctorate in bioengineering at the University of Pittsburgh. For the past four years, the father of three has worked as a software engineer and data scientist for Google in Bakery Square.

He thinks Pittsburgh, with its burgeoning tech sector, could learn something from Israel.

“In Israel, it’s a lot more, ‘Let’s build something.’ You just go to a white board and design something with somebody. Even with more mature companies in Israel, there’s less formality. It’s a lot more fluid than Pittsburgh — Israelis seem to thrive in this environment,” he says. “In the U.S., work falls along more social-economic aspects. You need to go a good school to get the right degree.”
 


Sagie Perel
 

Pennsylvania and Israel are no strangers — and, despite the 5,920 miles between Pittsburgh and Tel Aviv, they’re about to feel a little bit closer.

A group of local business and nonprofit leaders are putting together a Pittsburgh council in the hope that it can jumpstart research and development between the two places. A Memorandum of Understanding was signed in late 2017 between Pennsylvania and the Israeli Innovation Authority to this effect.

The linkages are not new. Pittsburgh has a robust Jewish and Israeli community, with scores of programs, both social and academic, bridging the ocean. The relationship, however, is increasingly about business.

Israeli companies have 44 locations in Pennsylvania providing roughly 3,500 jobs — making Israel the 18th largest international employer, according to the state Department of Economic Development. Pennsylvania, in turn, exports more than $230 million in goods to Israel annually, more in pharmaceuticals and computers than steel, state figures show. 

At least three Pittsburgh-based companies — ANSYS, Kennametal and Allegheny Technologies — already have a presence in Israel, not including businesses that have a Pennsylvania and Israel presence.

“In terms of jobs and Israeli investment in the U.S., we would certainly be contenders [among other states] for the gold medal. We’re definitely gold, silver, bronze — no question on that one,” says David Briel, executive director of international investment for DCED’s Office of International Business Development. 

“Israel, they’re extremely good at technology development, given their geography. They’re surrounded by less-than-friendly countries … so they expand in North America first. One goal is when they expand in North America, they look to Pennsylvania.”

The Pittsburgh Technology Council is paying attention.
 


Audrey Russo
 

Council President and CEO Audrey Russo says there are common threads between the two tech sectors and common challenges. Like Israel, Pittsburgh’s tech sector is not representative of its community. And people, on both sides of the Atlantic, are working to tackle that.

Pittsburgh, like the United States as a whole, struggles with under-representation in its technology and business-leadership communities. More than half of Pittsburgh’s population of roughly 300,000 are women, and 1 in 4 Pittsburghers are black.

The Allegheny Conference on Community Development has not documented anything specific in regard to African Americans working in tech.  The Federal Reserve Bank of Cleveland, which covers Pittsburgh, did not think statistics on the ethnic make-up of the region’s tech sector existed.

“It’s mostly male. It’s mostly Asian and Indian,” Russo says. “It’s less so women, very low on the female side. And it has a very small African-American population.”
Things were not that different in Israel. Meet 30-year-old Arab-Israeli woman Warda Melhem, a front-end developer in the Nazareth office of Galil Software and a natural conversationalist.

“If women hold up
half the sky, they should have an equal say in the future of Pittsburgh.”


Melhem studied systems information at Haifa University in Israel and, after graduating in 2011, worked for five years as a software developer, sometimes commuting as long as two or three hours each way to Tel Aviv from Nazareth. After having a child, Awny, she struggled to get back into the ever-evolving workforce.

Then, she met Tsofen, a technology company with offices in Nazareth — funded, in part, by the Greater Pittsburgh Jewish Federation and the Pittsburgh-based Jack Buncher Foundation — which works to place Arab-Israelis into the Israeli high-tech sector. They offered her courses and counseling, gave her discounted training in JavaScript, and connected her with Galil Software, which is based near an industrial park they helped build in the largely Arab city.

“When I saw Tsofen in the newspaper, on the Internet, I said, ‘I should go up there because I think I’ll find what I’m looking for there,’” she says. “Arab women? They do have a difference to make at the high-tech companies.”

The numbers are staggering — and speak to similar under-representation in the Pittsburgh tech sector. Nearly one in five Israelis is Arab, but, in 2008, when Tsofen was founded, there were just 350 Arab-Israelis working among the nation’s approximately 130,000 software developers/engineers, less than 0.5 percent. 

“The people in the villages, the Arab towns — they were saying, ‘Why should I study high-tech if I can’t get a high-tech job?’” says Sami Saadi, an Arab citizen of Israel and co-CEO of Tsofen. “So [in 2008] we started to think about what we can do about shared society and how we can integrate the Arab community with high-tech industry in Israel, to bring high-tech industry to Arab communities.”
 

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