Dozens of leading U.S. companies have set up technology incubators in Israel to take advantage of the country’s penchant for new ideas, which is why Bill Gates observed in 2006 that the “innovation going on in Israel is critical to the future of the technology business.” Likewise, Israeli high-tech firms often turn to U.S. companies as partners for joint production and marketing opportunities in the United States and elsewhere, creating tens of thousands of American jobs. And although Israelis make up just three percent of the population of the Middle East, in 2011 Israel was the destination of 25 percent of all U.S. exports to the region, having recently eclipsed Saudi Arabia as the top market there for American products.

U.S. companies’ substantial cooperation with Israel on information technology has been crucial to Silicon Valley’s success. At Intel’s research and development centers in Israel, engineers have designed many of the company’s most successful microprocessors, accounting for some 40 percent of the firm’s revenues last year. If you’ve made a secure financial transaction on the Internet, sent an instant message, or bought something using PayPal, you can thank Israeli IT researchers.

Israeli innovators have also come up with novel solutions to the water and food security challenges posed by population growth, climate change, and economic development. By necessity, given the geography of the Middle East, Israel is a world leader in water conservation and management and high-tech agriculture. Israel recycles more than eighty percent of its wastewater — the highest level in the world — and has pioneered widely used techniques of conserving or purifying water, including drip irrigation and reverse osmosis desalination. And a number of Israeli companies are leaders in the development of renewable energy sources; BrightSource Industries, for example, is building a solar power plant in California using Israeli technology that will double the amount of solar thermal electricity produced in America. These innovations, bolstered by the substantial American investment in Israel, contribute to long-term U.S. domestic and foreign policy objectives relating to sustainable development.