Innovation Without Borders: Israel and Bahrain Partner for Progress

The Abraham Accords have led to significant developments in the economic relationship between Israel and its Gulf neighbors. While it sometimes feels that the spotlight has been put on the UAE-Israel business relationship, there is more being done on the Bahrain-Israel front than ever before.  The establishment of a strong business relationship between Israel and Bahrain is essential for propelling regional collaboration and prosperity while addressing pressing, shared challenges. This cooperation likewise has tremendous economic potential for both nations.

Bahrain holds significant advantages for investment and business collaboration. It provides an access point to the Gulf Cooperation Council (GCC) market for rolling out new ventures and products. The country’s agility has translated to it being a leading force in regional development initiatives. The Kingdom offers several additional benefits to businesses, including its proximity to Saudi Arabia. It has passed supportive legislation and taxation policy in specific areas like financial services to attract investors.

The Kingdom of Bahrain is also currently investing in technology and building a strong digital economy, making it attractive for Israeli startups to seek business partnerships. The government of Bahrain has established various institutions such as Tamkeen, the Economic Development Board, and the Bahrain Development Bank, to support and nurture the private sector, startups, and companies in growth stages. This is part of Bahrain’s effort to diversify the economy, chiefly by integrating innovation and technology. These efforts are making a substantial impact. For example, Bahrain has reduced the proportion of oil and gas in its GNP from 40% to less than 20%.

Bahrain’s growing investment in innovation is working to create a fertile environment for startups to grow, while its strategic location and business-friendly policies are attracting foreign investments. What is left is infusing the ties between the two countries substance in the form of deal flow.

Israeli tech ecosystem stakeholders have started to note Bahrain’s immense potential, and numerous joint initiatives are currently underway, forging deeper relationships based on knowledge-sharing and innovation. Recently, Israel and Bahrain signed a memorandum of understanding to cooperate in technology, research, and development, in much-needed sectors such as healthcare, renewable energy, and water management – and this partnership is already bearing fruit.

Bahrain, like other Gulf countries or Morocco, has long-term national development plans with precise objectives. As a result, it is possible to accurately identify technology needs and understand how Israeli innovation can support or address these. Responding to regional sustainable development goals, Israeli innovation business leaders recognize the strategic value of this relationship and are focused on expanding their business partnership with Bahrain.

Building a sustainable and lasting business relationship between Israel and Bahrain is a priority for Start-Up Nation Central. Our team is working with Bahrain’s Ministry of Industry and Commerce and the Ministry of Finance and National Economy to design an ecosystem development strategy tailored to Bahrain’s local sphere of innovation. This project will propel Bahrain towards a knowledge economy – which is currently a national-level priority – and offer human capital solutions to Israel’s hi-tech sector.

connect to innovate bahrain israel

Further advancing these initiatives and strengthening ties between the two countries, Start-Up Nation Central with the Ministry of Industry and Commerce in the Kingdom of Bahrain (MOIC), Bahrain’s Economic Development Board (EDB), the Embassy of Bahrain in Israel, and the Embassy of Israel in the Kingdom of Bahrain, will jointly hold the Connect2Innovate Conference in Manama this month. The event will bring together governments, corporations, and investors, alongside Israeli innovation ecosystem leaders, to focus on challenges across fintech, logistics and supply chain, water, energy, and climate.

The potential benefits of the ongoing partnership are significant for both countries. Bahrain’s advanced laboratories, business accelerators, and educational opportunities have made the Kingdom an ideal place for Israeli startups to find viable partners, especially in sectors where Israeli technological innovation has a competitive advantage, such as health, climate, and agrifood. Bahrain is an ideal place for Israeli companies to set up regional research and development hubs with low operating costs and significant labor subsidies – supplying an additional solution to combat the tech employment shortage in Israel.

Bahrain’s investment in innovation and its focus on developing a knowledge-based economy has created an ideal environment for startups and businesses to grow, and on the flip side, Israel’s strengths in technology and innovation can further fuel Bahrain’s progress towards a diversified and thriving economy.

The partnership between our two countries has the potential to bring significant benefits to both – and the continued engagement we are fostering will cement the connections needed for long-term relationships with a clear focus on innovation and technology.

Nave Shachar

Nave Shachar is the GCC & MENA Innovation Diplomacy Director at Start-Up Nation Central. A Middle East specialist with nearly a decade of experience in strategic business development and policy work with government agencies for Fortune 500 companies and large businesses in the region.

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