Business Development Talk with Asher Kotz and Yair Ephrati

The Fairfax County Economic Development Authority (FCEDA) helps businesses start, expand or relocate in Fairfax County, Virginia.  Asher Kotz is the Business Investments Manager of Cybersecurity and Israel for the FCEDA. Yair Ephrati is the Director of the FCEDA Israel Office.

How has business development changed since COVID-19? 

Yair: Drastically. The pandemic has and still holds substantial effect on the US market, and since even the devoted FCEDA employees are forced to work from home since mid-March 2020; it has been quite the challenge adapting to this new reality. So now we direct our focus more on virtual events to highlight business opportunities in Northern Virginia resilience back-to-open economy; we are also keeping much closer tabs on our prospects since they are our ‘bread and butter.’  

Asher Kotz (Courtesy)

Asher: Fairfax County EDA is currently working with Israeli partners: BIRD, IATI, Israel Export Institution and the America-Israel Chamber to conduct webinars on growth segments in Northern Virginia for Israeli companies: Homeland Security, Cyber, AI, Defense, Aerospace, and Construction Technology.  June 30 webinar will be with IATI and AmCham; July 23rd webinar will be in collaboration with BIRD and IEI. 

Where do you see the economy going?  

Yair Ephrati (Courtesy)

Yair: We see a shift in the economy across the board from companies who have reached a realization on the pros of working from home, which negates the need for a physical office.

However, when working with large-size corporations, you need a hands-on approach that working from home does not allow. 

But we believe that Northern Virginia – with its hub of strong segments – such as data-center, cybersecurity, defense and aerospace and government contracting – represent a short and long-term business opportunities for Israeli companies that see the US market as a must be for their growth plan strategy.  

Asher: In the last few months in 2020, major US corporations announced expansions in Northern Virginia –Microsoft, Walmart Lab, AWS, Google, Facebook, Salesforce, and above all the continued economic development project of Amazon HQ2 in Northern Virginia – 37,000 new jobs over 12 years. 

How should business development managers adapt?  

Yair: They should find other avenues of reaching out to potential companies, ramping up PR efforts and on-line promotion of assistance to firms who are looking to expand. Another way is connecting those companies to strategic partners from the Northern Virginia area that can assist with jump-starting sales and business development creating a good base of operations in the DC area.

What should executives know?

Yair: They should realize that New York and San Francisco – traditional location destinations for Israeli firms – are in a very bad shape because of COVID-19 pandemic, civil unrest, and high-cost of doing business. So the Northern Virginia region on the East Coast is a resilient, friendly business environment, and has experienced less impact from the pandemic and economic shut-down. The region remains a strong landing location for Israeli firms as they expand into the US market, and offers a lot more upside for considerably less money for company needs.

How big is the economic relationship between Fairfax County and Israel?

Yair: Very extensive. FCEDA has had an office in Tel Aviv since 2004, and currently about 35 Israeli companies have locations in the County that serve as their US base of operations. Israel is known as the start-up nation for a reason, and many of the technologies invented there are utilized worldwide. Also, because of Israel’s many security challenges stemming from the geopolitical reality in the region, Israel is considered one of the best developers of HLS, cybersecurity, and military technology in the world, which makes Israel a perfect target country for FCEDA and it’s close proximity to the US Federal government in the Capital. 

Asher: In addition to working with companies to expand into Northern Virginia to invest and create jobs, Fairfax County EDA also developed and facilitated relationships among Israeli universities – Technion, Hebrew University, and universities and healthcare institutions in Northern Virginia: George Mason University, iNova HEALCARE Systems.  Furthermore, FCEDA works with Israel MOD SIBAT, Israel Export Institution, Israeli Embassy in Washington and the BIRD Foundation to host business delegations to facilitate collaboration among US and Israeli companies.   

Israeli companies over the last 15 years have invested in acquisitions of local Fairfax County based US companies, and in expansion of their local operations:

1. Elbit Systems of America (a subsidiary of Elbit Systems LTD, in Israel) has acquired Innovative Concepts, Inc. in 2008 for $15.0 M.
2. Plasan Sasa in 2012 acquired 51% controlling interest in a Reston based engineering company, Artis, for about $60.0 M.
3. Verint Systems in 2016, has acquired Contact Solutions, based in Reston, a provider of cloud-based voice and mobile customer self-service and business intelligence software. In 2011, the company acquired Vovici, based in Reston, VA for $76 million. 
4. Nice Systems in 2016 acquired Nexidia for $135 M (Nexidia Federal group was based in Reston, VA.)
5. Amdocs has done 3 acquisitions in Northern Virginia: 2013, Celcite Management Solutions LLC, for approximately $129 million; 2013, Actix for approximately $120 million (US HQ operation in Reston.)  2018, Vubiquity with a management office in Reston, for $228 M.
6. CYREN, based in McLean, in 2011, relocated its HQ from California.
7. Priority Software established a regional sales office in Reston in 2017, to run their US operation.  They are growing the local team. 
8. Israel Aerospace Industry North America, in 2019, relocated its HQ operation to Herndon and announced expansion of 50+ new jobs and capital investment.  
9. Melleanox Technologies established Mellanox Federal in Herndon in 2013. 
10. ForeScout has expanded to a new office in 2019 in Tysons, to focus on the federal business and commercial sector, increasing their staff and operations.
11. Cellebrite has established a new office in Tysons for their Federal team to support their growing federal business and mid-Atlantic commercial sales.  

The FCEDA has had an office in Tel Aviv since 2004 to work with Israeli companies that are considering expansion in the U.S. market.  What have been your biggest accomplishments?

Yair: I would have to say the following:

1. Winning the project of relocating US HQ operation of Israel Aerospace Industry North America to Herndon, in Fairfax County.  IAI is a major defense, aerospace and HLS company in Israel, and is creating over 100 jobs for the County in the next 3 years. 
2. The establishment of the new United Airlines direct flight service from Tel Aviv to Washington Dulles International airport, in May 2019.  The 3 times a week flight has made the DC area a more convenient business hub for Israeli companies for the US market.  
3. In June 2017, Fairfax County EDA hosted the global brand Cybertech Fairfax conference at the Capital One HQ building in McLean.  The cybersecurity-focus conference attracted 450 + attendees and featured 30+ Israeli companies and speakers from US government, industry and private companies.