Side by side in last week’s Hebrew financial press were separate yet related two articles. One reported how four new Israeli VC funds had just closed out with US$340 million in hand. The other questioned why Palestinian high-tech just cannot seem to get going.

Now the proponents of each side will blurt out fairly obvious explanations for such differences. The Palestinians are just interested in investing in the destruction of Israel. Alternatively, Israel has no interest in helping a thriving Palestinian society succeed. And so the rhetoric continues.

However, in attempting to move beyond the mutual slanging of both teams, maybe there is a far more pertinent issue, one that relates to the subject of innovation. Let me examine this further.

Back in 1986, Israel’s economy effectively closed down, as it failed to cope with incessant hyper-inflation. In parallel, the war in Lebanon was grinding to a murderous stalemate and the first Intifada was about to commence. Since then, the country has earned the reputation of ‘Start Up Nation“. Only today, we have read how the Australian fund, Square Peg, intends to invest US$150m in the Holy Land. Over a hundred multinationals have r&d centres in Israel, and the list appears to grow monthly. All positive stuff.

In parallel, the reports on the Palestinian high-tech sector seem to clutch at straws. A few women striving to make a breakthrough? The new city of Rawabi described as a high-tech hometown, when it is not. Vague reports of crowd funding launching high-tech schemes in Gaza. For all the hype, it does not seem to add to much.

USAID, Cisco, Intel and others are known for trying to support the Palestinian economy with practical schemes. Coca Cola has building a new US$20m plant in Gaza, which will employ around 300 people. And the World Bank’s latest US55m grant will push its total to US$970 million since 1993!

The Palestinian economy is not in a good position, bankrupt. Blame politicians, who have preferred corruption and the fight against Israel as opposed to investing in society. Or blame Israel for not helping, but only sending in troops unnecessarily. But there again, as I mentioned before, back in the 1980s, Israel also endured a period of poor economic performance intertwined with bloodshed.

However, Israelis then took a different viewpoint. As a nation, they did not stand around and complain, but were prepared to make changes. The politicians simply froze the economy – prices, wages, money supply – in order to give it a chance to recover. The attitude of ‘we deserve help / the government will bail us out’ was gradually replaced.

Instead, Israeli entrepreneurs were encouraged with an exciting and evolving programme of grants and aid. People were allowed to think beyond the accepted and to operate outside the scope that the violence of the Middle East tends to demand. Emphasis was placed on innovation and industrial revolution rather than military service.

And I have to ask: Why does the Palestinian leaderships in Gaza and in the West Bank not adopt a similar approach? What have they got to lose?