Israel as gateway to developing world
Business leaders gathered at Go4Europe conference in Tel Aviv say Jewish state poised to link its innovative spirit with Europe’s established business practices to spur growth in technological breakthroughs
“We are looking for the best talent in the world, and Israel is known for having some of the best talent,” Meir Brand, the managing director of Google Israel, Greece and sub-Saharan Africa, told The Media Line. “We also look for the entrepreneurial spirit and the risk taking that Israelis are comfortable with.”
Brand was among a large group of leading financiers and high-tech CEOs who discussed their vision for creating more cooperative connections between Israel and Europe. The presenters spoke of Israeli know-how and Israelis’ inclination to challenge the status quo.
“One thing in Israel is the cultural element, the disrespect of authority, together with extremely strong technical skills,” Dor Skuler, the vice president of Franco-American telecommunications company Alcatel-Lucent told The Media Line.
“There is also a very healthy and strong team spirit (among Israelis). They’re very helpful to each other, and they have a mindset that focuses on the success of the team. They also have a real hunger to disrupt the market.”
While Israel holds promise with those looking to create new digital products, companies who want to engage in larger infrastructure projects still face issues of regulation and government interference.
“There’s a lot of non-coordination between ministries when it comes to national infrastructure, which can cost an entrepreneur a lot of money because of delays if they don’t know how to work the system,” Yosef Abramowitz, a solar power pioneer and CEO of Energiya Global, told The Media Line.
“Our advice for international investors who do want to benefit from long term, green investments in the state of Israel is to find a trusted local partner who can navigate the politics and bureaucracies in Israel.”
According to a recent Bank of Israel study, the average construction time for a project in Israel is 14 years. This lengthy process is one that has stymied business opportunities.
“We’ve seen solar energy companies that have left Israel,” Abramowitz said. “And we’ve seen solar energy companies that have closed shop. So that should be a warning sign to the Ministry of Finance that the state has been squandering the opportunity to have billions of dollars invested in its energy infrastructure. Security has to be given to investors about the future of the industry.”
Entrepreneurial spirit
While regulatory and bureaucratic issues may make some investors wary, international high tech firms seem to find the unique Israeli attitude irresistible. Google’s Brand pointed out the global presence that exists within the small country.
“Almost all of the global multinationals have a significant presence in Israel,” he said. “I think that it’s no coincidence that Apple built its first R&D center outside of the US in Israel. (These companies) are all here because they want that entrepreneurial spirit and the ability for their employees to take risks in order to disrupt the market that they are in.”
Google Executive Chairman Eric Schmidt said last year after visiting the country that “Israel has the most important high-tech center in the world after the US.” The big name endorsement is not hot air: Israel has attracted such high-profile companies as Intel, IBM, Apple, Google and, most recently, Facebook, which bought Israeli company Onavo and plans to use their office as the regional Facebook headquarters.
This influx of capital and knowledge has continued despite Israel’s location in the volatile Middle East. While the Arab Spring has led to instability throughout the region, with Egypt undergoing political changes over the last two years, Syria embroiled in civil war and Lebanon facing the fallout from that conflict, Israel has been largely spared the problems of its neighbors, and a recent spell of relative peace has bolstered the attractiveness of investing in the Jewish state.
On the other end, Europe has been dealing with the aftermath of the 2009 economic crisis, which left the Euro zone in a weak position. Countries such as Greece, Spain, Portugal and Italy all faced economic collapses as they were unable to pay their bills and unemployment skyrocketed. But Europeans are hopeful that developing deeper ties with Israel will bring both countries increased fortunes.
“It’s absolutely necessary for Europe to look outward because the big growth globally is outside of Europe,” Maximo Buch, the Minister of Economy for the Valencia region of Spain, told The Media Line. Buch added that Asia and the developing world are promising consumer markets. “We need to play globally, not just locally.”
One way Europe sees this happening is by connecting its economies and development centers with Israel in order to create symbiotic partnerships between the two areas. A major challenge is finding the Israeli products that can work well with European businesses, Buch said.
Abramowitz agrees, saying that despite the challenges Israel is poised as the gateway to emerging markets around the world.
“I think for companies and investors who are looking to go into fast growing markets around the world, particularly in Africa, Israel is a phenomenal gateway,” he said. “This is because of proximity, because so many Africans are trained in Israel, because of a historic relationship, and because what Africa needs most, which is food, water, and energy, and renewable energy.
"Israel can provide (these things) and we can do it faster and cheaper, and we can integrate them. At this point, food water and energy are interrelated, so we as a country can provide a package deal.”
Israel appears poised to take advantage of an influx of capital into its borders, while Europe stands to gain the innovative edge that it needs to remain competitive in the globalized economy.
Article written by Rye Druzin
Reprinted with permission from The Media Line
