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Israeli economy continues to confuse the experts

19 August 2016
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Categories: Afternoon Tea in Jerusalem, Business, Israel, Jerusalem

It has emerged that the Israeli economy grew by nearly 3% in the first half of 2016. That means that all the gloom and gloom from earlier stats have been swept aside. In fact, this is one of the best performances in the whole of the OECD.

Moody’s liked the news and confirmed Israel’s A1 credit rating. And a week ago, S&P also commented favourably on Israel’s financial status. So it seems as if everything is moving along smoothly.

And now look again. The key element to this pattern of growth in 2016 so far has been a massive leap in private consumption – 9.5%. For example, new car sales are up 15% this year. However, all first year economic students learn that such a rush by individuals to their bank accounts does necessarily create long-term positive growth.

As for exports, a key part of the economic charge of recent years, the signs are worrying. The global market is reticent. The shekel remains high, especially in relation to key trading partners such as the UK. Intel and Teva, two dominant manufacturers in Israel, are undergoing planned restructuring, ensuring their exports are low comparatively.

My real concern is that what the stats tend to hide are internal structural weaknesses. For example, while politicians claim otherwise, there is no conclusive evidence that the housing market is slowing down.  The threat of a ‘bubble’ lingers on. Elsewhere, vested interest groups are ensuring that food imports remain restricted and forcing the consumer to accept bloated prices. Even government funds for start ups via the Office of the Chief Scientist have been partially reduced, arguably to pay for promises given to other ministers closer to the Prime Minister.

My own anecdotal evidence from clients in differing sectors is that there has been a pick up in recent months. However, for many it is just a partial rebound from a very difficult period stretching back at least 12 months.

My personal take on the situation is that the Israeli economy has ‘got away with it’ until now. Today, you just get the feeling that it is rudderless. As Bloomberg put it: “Israel’s economy roaring no more, even as it accelerates”. The question is will the Prime Minister care enough to support his Minister of Finance.

You and your small business – I dare you to value your time properly

16 August 2016
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Categories: Afternoon Tea in Jerusalem, Business, Israel, Jerusalem

My scope as a business coach and mentor in the Jerusalem area brings me into contact with a wide range of commercial operations. One theme that has come up a few times just recently is the issue of how to value time. And it ain’t that simple, especially if you are a small business.

Here are two case studies:

Let us call the client Barbara. Now Barbara has been providing a successful internet business for some years. Without a formal method or defined business model, the work has flowed in…that is until the flow of new clients dried up unexpectedly. Ouch! It is funny how in business people only turn to coaches in the bad times, where as in sport the opposite is true. I was duly summoned.

It became apparent that Barbara did not have enough time to spend on her commercial operations. Initially, she blamed the time she was required to spend at home. She really is a great, dedicated family woman.

However, further digging revealed that Barbara also likes spending her time helping others, day and night. People seek her out. They value her empathy and counsel. And she gives whole heartedly.

So, I challenged Barbara to limit the role of advice-giver to 30 minutes a day. Within a week, revenue was on the move upwards. And, interestingly enough, all those who needed to speak to her, still found a way to share their burden with Barbara.

In a separate case, David is setting up his business. The temptation is to charge low and haul the first set of customers through the door. This is an empirical formula, internationally accepted.

However, I challenged David to commit to how many work hours he wishes to invest in an average month of work. I then asked how much he wanted to bring home. And finally came the killer question: Of those hours, how many will truly be directed towards producing the service for the clients?

In other words, after all is said and done, how much time will David have to dedicate towards “working the customers”? In simple terms, if David wants US$200 a month and he only has one client for two hours, he has to charge US$100 per hour. Anything less, and he is not achieving his aims and may be making a loss.

Obvious? Yes, when written like this. So why do so many new businesses try to break the rule and thus end up with serious cash flow problems?

The punch line is that time is all around us, like air, yet seeming intangible. That is why many do not fully appreciate it…….at their commercial peril. Value your environment and that includes the time capsule in your very grasp.

What if “what if” is the wrong question to ask? A mentor’s perspective

10 August 2016
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Categories: Afternoon Tea in Jerusalem, Business, Israel

I don’t think it is the unique atmosphere of Jerusalem, from where many of my clients operate. Nor is it specifically the type of people I encourage through business mentoring. However, every week I find myself entering into long discussions based on the question “what if”.

And more and more frequently I find myself thinking that this is the wrong attitude. The client is on the wrong flight path.

Now let me be clear. From an early age, we are taught to check ourselves and to verify potential scenarios. Rightly so. Just take an investment decision – whether or not to purchase a new appliance for the home or expensive machinery for the office. A wrong decision could be disastrous financially and logistically.

However, while ‘what if’ sounds correct, what many people do not consider is the actual probability of such usually negative scenarios. Are they really likely to happen?

For example: What if the washing machine does not perform, as the reports tell us? What if the machinery does not reach reasonable output levels? What if it rains during the Mediterranean summer? Yes, it could happen, but is this likely? No. So why ask the question in the first place?

The answer is that the ‘what if’ game has become a politically correct commercial form of procrastination. People use it, when they are afraid to make a true decision. If they move on, they will have to commit to a project, requiring time, money and effort. For many, that can be scary.

Is there a way out of the ‘what if’ merry-go-round? Sometimes, I throw the question back at the client, encouraging them to answer their own misplaced question. Alternatively, I give a blank stare, forcing them to consider what they have just said. And on rare occasions, I develop the negative possibilities to a very ridiculous degree, at which point the client graciously asks me to back down.

Learning to ask pertinent questions at the right time is not an easy process, as we all know. Coping with hidden fears, which hold us back in commerce, is no less tricky. Reassessing the correct application of ‘what if’ is a big step in the right  direction

Israeli society and UK lawmakers – spot the differences

9 August 2016
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Categories: Afternoon Tea in Jerusalem, Business, Israel, Palestinians

A British JP, Joy Wolfe (who I know) yesterday wrote on her Facebook page that:

I am deeply disturbed by the growing evidence of virulent antisemitism at the top level of the Labour Party. The latest examples come from members of the Shadow Cabinet and are frankly mind blowing and would seem more at home in Nazi Germany that multicultural Britain.

Communities spokesman Grahame Morris wants British Jews who serve in the Israeli defence force to be treated as suspected terrorists.

And Justice spokesman Richard Burgon has urged MPs and party members to quit the Labour Friends of Israel group, declaring: “Zionism is the enemy of peace.

I suppose that in trying to support the Palestinians at any price, such comments may appear justifiable to the socialist politicians. There again, I fail to find any statements from them regarding the 3,000+ Palestinians killed in Syria since 2011. Thus, clearly, the hate contained in their words is directed solely against Israel and its citizens.

So let us spend two minutes and look at some recent developments in Israeli society – three quick ‘did-you-knows’ and a bonus package for the MPs themselves.

  • Did you know that the Israeli army has 18,000 thousand volunteers? And did you know that approximately 25% of them – about 4,500 – come from Arab communities (Muslim or Christian)? For the record, the numbers of Arabs in the army continues to grow every year.
  • Did you know that in the aftermath of a fatal terrorist incident last month in the West Bank, one the first people on the scene to help was Dr Ali Abu Shareh. Now this is man, who assumedly rejects the concept of Jews living in places like Hebron and the West Bank. Yet he rightly and proudly placed humanity before politics. He tried to save lives. Ironically, Dr Shareh has since been fired from his job by his Palestinian superiors. Coincidence? Whatever – it has been left to the Jews of Hebron to help him find new employment.
  • Did you know that Check Point, an Israeli company and a global leader in the fight against software fraud, has just discovered mega security flaws in 900 million android devices around the globe. I could cynically imagine that our intrepid MPs would prefer the bugs to remain in place rather than benefit from technology emanating from such a wicked country, ‘the enemy of peace’.

But here’s the crunch issue for the esteemed reps of the British people. It is now horrendously apparent that large chunks of British aid for the Palestinian people have been diverted towards the private bank accounts of their leaders – I suppose that technically they too are a part of the ‘people’ – or towards means of war against Israeli civilians. The trouble is that these monies come from the pockets of British taxpayers. They could have been used more effectively by true sufferers in other regions.

In other words, basic democratic principles of accountability and transparency have been flouted in the name of hatred. I can but presume that this is what Joy Wolfe is so rightly concerned about. It is the kind of ‘politically correct’ deceit that was used by Mosley in the 1930s.

It is the language that was rejected by one of the great democratic socialists of all eras, George Orwell, who described it as the defence of the indefensible. Shame upon them and their supporters.

Why procrastinators love eating red herrings

4 August 2016
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Categories: Afternoon Tea in Jerusalem, Business, Israel, Jerusalem

I love my profession. A business coach and mentor, primarily in the Jerusalem region, I have the opportunity to meet so many varied and interesting businesses and their teams.

As I have written before, one of the subjects that comes up with great regularity is procrastination. It is amazing how many people I meet who claim to be the best ‘putter offer’ in the world.

There are so many blogs explaining how to ‘cure’ or get over the problem. Here’s one from the Harvard Business Review earlier this week.

….next time you find yourself mystified by your inability to get important tasks done, be kind to yourself. Recognize that your brain needs help if it’s going to be less short-sighted. Try taking at least one step to make the benefits of action loom larger, and one to make the costs of action feel smaller. 

Not bad. However, for my clients the problem is often much deeper. They are full of seemingly genuine excuses – a.k.a politically correct language – why they do not have to do whatever by whenever.

An equivalent for politically correct in this case is “red herring”. We all understand what the phrase means, but few actually know what a red herring physically is. And the answer?…………….A red herring does not exist! There is no such fish.

In contrast. look at these two brief case studies in the world of procrastinators:

  1. One of my clients this week claimed that she could not move ahead in the company, because she did not have the correct qualifications. How did she know, I asked her. “Well, it’s obvious”, came the reply. And despite pushing, she could not supply any proof to her statement. She repeated the mantra.
  2. In another recent situation, the client insisted that their work day had to be structured in a set manner, because that is what others around them wanted and needed. When I asked, how they knew that, their only response was one of digging in their heels. “That is the way it has always been”.

My point? People place red herrings in their lives for a reason, usually totally unrelated to the immediate subject in play. It is seemingly that bad that they are prepared to place in jeopardy future progress rather than handle the issue. The core problem may be something much deeper.

In other words, they will eat a ton of red herrings – a.k.a. hot air – rather than do something constructive.

By the way and with some irony, you can create a red herring by smoking fish, which is probably what should happen to the preconceived notions that we all walk around with.

Israeli high-tech exports, and the defense industry

29 July 2016
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Categories: Afternoon Tea in Jerusalem, Business, Israel

Everybody knows that Israeli exports are driven by the high-tech sector. For years, Jaffa oranges have not been the commercial flavour of the month, having been replaced by the tasty riches of Intel and other multinationals based in Israel.

Within the tech hype, there is one sector that tries to keep under the radar – pun intended – and that is the defense industry. The issue came to light this week in a discussion over the 2017 budget. The Treasury is trying to up its level of control on export licenses for armaments.

In turn, the “Calcalist” newspaper ran a review of defense companies, and the numbers are fascinating.

In 2015, around US$5.7 billion of contracts were signed. This is about 10% off the average for the past decade, although a little improved on 2014. The peak was US$7.4 billion in both 2009 and 2010.

And the destination of these sales? This really surprised me. 53% are Asian and Australasian based clients. The rest is spread fairly evenly around Europe, USA and other regions. In total, these numbers represent about 10% of Israel’s annual exports.

What is the real cherry on the cake? A few days ago, the extent of Israel’s participation in the Rio Olympics was made public. Aside from a delegation of nearly 50 athletes, dozens of companies from the Holy Land have won contracts to protect the event – from the air, sea, cyber space and more.

It is estimated that about 10,000 Brazilian security service personnel have been trained by Israelis over the past couple of years. The total financial commitment is about US$2.5 billion, according to an item on Israel Channel 2 TV station.

What next? I am not an expert in this sector. Israel’s political enemies would rather boycott these capabilities and risk the consequences. However, can you imagine how unsafe we all would be without this contribution from factories in Haifa or start ups in Herzylia? Frightening!

Biotech industry in Israel – real progress

22 July 2016
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Categories: Afternoon Tea in Jerusalem, Business, Israel

The biotech industry in Israel seems to be finding its feet.

A week ago, “The Calcalist” – The Economist in English – daily financial paper reported on a new round of investments in the sector.

  • Bonus Biogroup completed an 18 million shekel (approx US$4.7m) sale of shares, ahead of its offer in the USA.
  • VBL, already present on NASDAQ, took in US$24m in order to boost its search for creating drugs against cancer.
  • Micromedic’s shares shot up 140% ahead of an announcement relating the success of its diagnostic kit for cancer.
  • Kitov raised US$12m on results that show its main product is highly effective in combatting arthritis.

These are not isolated pieces of news. At the end of June 2016, the Israel Biotech Fund (IBF) made its first move, selecting cancer drug developer “Vidac” as its first partner. IBF has a US$100m treasure chest to spend, supported by American giant Biogen, Medison, and others.

On a micro level, BioJerusalem and JBNF-Bio have had major success in recent years partnering local start ups with multinationals. The latter recently held a meet up with nearly 100 participants on how to create a start up. The bug of entrepreneurship is still mutating with vigour.

At a time when much of Israel’s economy is facing a slowdown, it is refreshing to observe how biotech in the Holy Land is bucking the trend.

Manipulators? You only need one weapon to overcome them

20 July 2016
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Categories: Afternoon Tea in Jerusalem, Business

As a business coach and mentor, I am frequently asked how to cope with people who are clearly not telling the whole story. Something sounds wrong.

“Ten techniques used by manipulators” is the title of a blog, which sets out just how nasty some bosses and colleagues are in the workplace.

Interestingly enough, such habits extend to suppliers, clients and as far as our social arena.

The blog is a very useful read. It sets out the very different approaches that the ‘nasties’ use. There is anything from aggressive to using third parties to the gentle manner, and much more. Each one comes with a self-help message.

And that is where the problem comes in. There is just too much to be aware of.

Once I had stepped-back, I looked at the pointers again. They added up to one key message.

Value yourself. Know your key strengths. Understand what are your core values and why you put them there. 

At the end of the day a manipulator wants to encourage you to pull down your own fundamentals.

A manipulator tries to maneuver their way around these rocks. Yes, they are rocks, very impressive boulders. Your own self worth.

So, make sure that you do not help them clear the path through towards……the wrong turning in your life. They make it sound so easy to say yes, when actually “no” is a shorter and simply word to utter.

Palestinian economy: The fifth “giveaway”

17 July 2016
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Categories: Afternoon Tea in Jerusalem, Business, Israel, Palestinians

Last week’s blog on “4 takeaways of the Palestinian economy” highlighted how so much money seeps into Gaza and the West Bank. Yet so little is accountable and so much seems to escape the notice of Western donors.

As one person commented that rather than ‘takeaways’, this is a policy of “giveaways”! And thus on that note, I would like to apply one more comment to this huge generosity from Western taxpayers.

 Alex Fishman wrote a detailed commentary this weekend on the continuing tension between Gaza and Israel. While the government of Jerusalem is investing billions in new tech to prevent tunnels reaching its territory, Hamas has upped the level of digging and shoveling beyond anything previously known. 50 or so terrorists – captured, or those that gave themselves up – have spilt the beans on what is being dug, where, by whom and how.

But let me concentrate on the financials and stats that Fishman alluded to:

  • To date, in 2016, it is estimated that Hamas has channeled up to 300 million nis towards the tunnels. (About US80 m)
  • Approximately 20% of the Hamas budget is allocated to military needs.
  • Despite Egyptian efforts, Hamas still has around 10 or so tunnels pointing in the direction of Cairo. (It is worth recalling, Egypt is furious that ISIS operators in Sinai receive regular support from Hamas, including escape routes and medical treatment.)
  • The tunnel creation is a 24/7 project that has already cost at least 20 lives this year alone.
  • Roughly 5,000 Hamas militia are being trained for ‘tunnel warfare’, more than double the total available in 2014.

Now Fishman did not offer any directs sources to substantiate these facts. However, I think it reasonable to state that Hamas are up to no good. These tunnels are designed to cause injury and destruction.

So, where does the concrete come from? Lorries enter from Israel, ostensibly with raw materials for new homes. Oh come off it!!! No wonder, UNWRA complains that home building is behind schedule.

And where does the financing come from? Strange how that question never seems to be asked in European Parliaments………..even if these same governments give hundreds of millions directly and indirectly every year to Gaza and to the West Bank?

The unreported Palestinian economy: 4 takeaways

15 July 2016
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Categories: Afternoon Tea in Jerusalem, Business, Israel, Jerusalem, Palestinians

The default reporting mechanism for the Palestinian economy is that it is bust and that is mainly due to Israeli oppression.

The facts that Ramallah and Gaza and surrounds are today replete with shopping centres or that the economy leapt forward when under full Israeli control up to 1999 seem to be irrelevant. So I briefly want to take a quick survey of anecdotal evidence as to what is happening.

Ostensibly, the answer is nothing. The Ma’an News Agency in Ramallah has not updated its economic section in English for over two months. Moving beyond this bizarre situation, I found out that:

1) Certainly, the EU continues to pour in hundreds of millions of Euros on behalf of the Palestinians. It justifies this on the grounds that the money stops a complete collapse of the two-state economy. The strange thing is that the donors from the Arab states are still around US$1 billion short in meeting their commitments, and show little real to pick up the slack.

This does beg the question why the oil-rich nations revoke on their financial pledges to the leadership of Abbas and Hamas? What do they know?

2) That the Palestinian economy is in dire straights is not an argument. It is a fact. The perennial question is where does all the aid go to?

It is significant that even the British newspaper, the Guardian, considered one of the most hostile to Israel for two decades now accepts that:

About 6 percent of the Palestinian budget is diverted to prisoner salaries. All this money comes from so-called ‘donor countries’ such as the United States, Great Britain, Norway, and Denmark.

Thus, by one calculation: “The Palestinian Authority is paying them (prisoners) up to £1,957 a month – more than the average salary of a UK worker.” Absolutely stunning!

Why the complete lack of accountability? Why does UNWRA, what I describe as the largest charity in the world, have no external auditor? Why is so much of taxpayers’ money poured into bottomless pot, yet relatively little is spent elsewhere?

3) The blog of Haifa Diary picked up on a small yet significant news item. The Israeli security services arrested a small-time Palestinian smuggler. No big deal, except that he was carrying thousands of dollars intended to fund Hamas terrorism in the West Bank.

So what is it? The average Palestinian does not need the cash, or their livelihood is just irrelevant for their leaders in this incessant game of hatred?

4) And if we are talking of illegal trade, did you hear about the illegal spare automotive parts, which were nearly smuggled into Gaza? No? Silence in your media?

Well, I bet you did not hear about all of these stories? And maybe it is time to ask why?

A classic case study in ‘how not to make a pitch’

14 July 2016
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Categories: Afternoon Tea in Jerusalem, Business, Israel, Jerusalem

Yesterday, I was very excited to attend a seminar in Tel Aviv on the adtech industry in Israel. Here was an excellent opportunity to learn more about native advertising and the contribution of the Holy Land start ups to the global community in the field of video.

From the pre networking, it was obvious that the place was full of people and company reps with great talents, directing live content in ways thought impossible just a few years ago. And yet, much of the talk and the discussion forced me to slip into my role of business coach and mentor. Here’s why

  1. After a brief intro from the hosts, the first speaker was forced to halt in mid track after 45 seconds. The microphone failed. The fault was quickly fixed. However, once back on his feet, our maestro promptly said that he would not repeat himself, “because it was not that important.”      You mean that I and hundreds others are about to sit here and waste our time on you listening to you? Amazing kick off!
  2. There then followed a panel discussion. OK. But nobody introduced the participants and what gave them the right to be on stage in the first place. So, initially, their comments came over very disjointed.
  3. Few of the speakers throughout the evening appeared to appreciate or even consider the make up of the audience. You could tell, just by looking around and counting those in the audience playing with their mobiles during the presentations.
  4. And then there were the pitchesrom the start ups, each given just a few minutes to state why their technology is so ‘wow’. I watched as at least two presenters spent half their time explaining what they are not. What a waste of an opportunity.

And in contrast? Over the past few days, clients of mine have made pitches for funding.

  • The founder of a start up originally complained to me that he could not explain what he does in less than two minutes. That came down to 15 seconds. They have since received the first level of approval.
  • In parallel, a Jerusalem company has created a one page executive summary that sets out concisely their progress over the years and the proposed business model. No need at this stage for a 20 page business plan. They are hopeful to receive an injection of cash to fund future development.

To be honest, one pitch did catch my eye. Within 30 seconds I had understood what is so special about VocalReferences, as laid out by cofounder David Wenner.

I ended up leaving the conference early. Before doing so, I looked around the audience. I wondered how many investors and business accelerators were present in the room and how under whelmed they had been left. A golden opportunity for many so sadly underused.

Look whose money is invested in the Palestinian economy – 3 takeaways

8 July 2016
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Categories: Afternoon Tea in Jerusalem, Business, Israel, Palestinians

For decades, we have heard that the Palestinians do not have any money. We know that their brothers in the Arab League do not readily convert financial promises into actual deliveries. Despite that, Palestinians mange to build extravagant tunnels and shopping centres.

So who is paying for the development of the Hamas regime in Gaza or the perpetuation of the Abbas empire in Ramallah? Consider these three anecdotes that shows what happens on the quiet to the earnings of Western taxpayers.

First, the generosity of the UK knows few limits. It was revealed in the Parliament of Westminster on July 4th by the minister for the DFID, the Department for International Development that: –

DFID provided almost £157 million to the Occupied Palestinian Territories (OPTs) between 2014/15 and 2015/16 to help build Palestinian institutions, deliver basic services and promote economic development. DFID has either met or exceeded the majority of its targets for programmes in the OPTs.

DFID supported over 390 companies to improve their operations and increase competitiveness. In each of the two years, through UNRWA support, over 26,000 families received social transfers (either food or cash) and almost 45,000 children were provided basic education. Furthermore, over 1.6 million medical consultations were provided over the two years.

In addition to this support, the UK provided more than £17m in immediate humanitarian assistance for those affected by the Gaza conflict in the summer of 2014. Non-food Item (NFI) packages were provided for 23,400 families covering their needs for three months.

Very noble. And this does not mention contributions to the EU for Palestinian-specific projects.

So, turning to Brussels, there is no doubt that the EU can be incredibly supportive. It recently contributed 10 million Euros towards a much needed desalination plant in Gaza. Officially, the EU contributes around 170 million Euros annually to the Palestinians. This does not include the hundreds of millions, which find their way to UNRWA. Could this be one of the reasons that the British voted to opt out of Europe?

And finally, some may say ironically, there is the support and training provided by Israel. Yes, the government in Jerusalem is not immune to what happens in the West Bank and in Gaza. One prominent expression of this can be found in the agricultural sector, where two sides met up regularly.  In fact is staggering just how much Israel gives to the Palestinians via business centres, education, medical assistance and much more.  This must be worth tens of millions of dollars in any given year.

This week, a flotilla of aid from Turkey arrived in Israel. The goods are to be transferred under supervision to Gaza. This act of charity may save face for the Turkish regime, but it is not what the Palestinians necessarily need not will it directly help the overall cause of peace.

It is time to change the narrative. The Palestinians do have money – not a lot, but it is right there. They do need more investment, not in its leadership but directly in the people. And as the UK Parliament is beginning to understand, the monitoring of these donations has to become transparent and accountable, which simply is not what happens today.

Israel’s economy: Connecting the dots in July 2016

6 July 2016
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Categories: Afternoon Tea in Jerusalem, Business, Israel

Just look at these headlines from today’s financial news in Israel.

  1. The number of new cars being delivered in Israel just keeps on rising.
  2. The price of housing is expected to to climb even further for the predictable future.
  3. The trend for 2016 reveals a drop in the number of high-tech exists.
  4. Following on from the fall off in growth in 2015, the Bank of Israel has pegged back its updated forecast for 2016

Can you start to connect the dots?

If not, let me give you another clue. Whilst consuming spending is holding up in specific sectors and while key parts of the economy are not performing, I have yet to read about one significant move by the Israeli government to bolster the country’s economy.

Let me just check that. Oops, I made a mistake. The government has recently approved six extra days leave for the whole economy! But this sort of proves my point – all play and no work often leads to disaster, no?

The next miracle of the car industry comes from Jerusalem?

5 July 2016
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Categories: Afternoon Tea in Jerusalem, Business, Jerusalem

Jerusalem is synonymous with biblical miracles. When it comes to the changing brilliance of the car industry, our thoughts turn to the Far East or Germany. In fact, it seems that a former start up from Jerusalem by the name of Mobileye is about to change all that.

Let’s abck track for a moment. For almost two decades, Mobileye has been creating algorithms to enhance car safety and prevent accidents. It is located on three continents and boasts partnerships with many leading manufacturers. By the way, if you were to walk into its offices in the Holy City, you will find a vibrant atmosphere albeit in a very modest building.

About a week ago, the company’s share price jumped about 10%, ahead of news of an expected announcement for further collaboration with BMW and Intel. Mobileye’s tech will be at the forefront of a new driverless car. For the record, this capital influx was not the first time recently that Israel had been in the news for the car industry. VW has recently thrown US$300 at Gett.

In fact, the scope of the Mobileye project is significantly larger than initially speculated. In an interview with the Hebrew press, Elad Sefati VP, has revealed that Mobileye is talking to 13 different manufacturers. The Jerusalem company will supply the navigational technology. In fact, there are five customers which are closing in on first stage production.

The hope is that the BMW automatic or drone car with the Jerusalem miracle pack will be ready for launch in 2021, and this will take place in Israel. How times have moved on.

A ‘Spiritual Response’ from British Isles to Israel’s economy

1 July 2016
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Categories: Afternoon Tea in Jerusalem, Business, Israel, Palestinians

Thursday 30th June 2016 represented a day of mixed feelings for Israel

Early in the day, a Palestinian entered the home of an Israeli family and slew a 13 year old girl in her sleep. A few hours later, there was another stabbing incident on the costal city of Netanya.

While that was going on, the British Labour Party released its report on anti-Semitism in its ranks. Led by Sami Chakrabarti, it concluded that “too much clear evidence of minority hateful or ignorant attitudes” amongst members. Fair enough. However, party leader, Jeremy Corbyn, when commenting about the findings, made his central point the equivalence of Israel with ISIS!

While wondering if Corbyn realises (or cares) that Jews pray in the direction of Zion in Jerusalem, it did not take long for the leaders of the   Jewish community to dismiss outright such a statement. Yet if Corbyn’s language was not vile enough, his apparent supporters were caught on camera uttering further anti-Semitic remarks…… and never a mention of a few words for the wretched family, whose daughter had just been stabbed to death ‘in the name of peace’.

In total contrast, a few hours later, I was on my way to take part in the 3rd Tel Aviv Whisky Live event. Thousands attended, of every creed and colour. And arguably the most popular stands were those with reps – whisky ambassadors – from the distilleries from the British Isles.

For example, Tomintoul had an excellent display, and I admit to being pleased with my tasting their 12 year old malt. What I found particularly interesting was their understanding of the kosher laws regarding this very special drink, an issue that most seem very obscure to the Speyside team. Similarly, I was delighted to learn about Teelings single malt, whose base is in the heart of Dublin, Eire. And to be honest, I left with a very healthy looking bottle of heavily peated Jura.

The point is that these companies and their competitors and fully engaged now in the Israeli market. They look beyond the hypocrisies and misjudgments of people like Corbyn and fellow politically correct animals – who would advocate people to boycott such an event.

Spiritually, and in more ways than one, the distilleries are simply working with the Jewish nation, treating the local populace just like any other country. Which raises the question as to what sinister issue is preventing Monsieur Corbyn from doing the same?

Surveying Israeli high-tech, June 2016: 4 weddings and a funeral

30 June 2016
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Categories: Afternoon Tea in Jerusalem, Business, Israel

I wrote last week that “Israel is no longer number the only country in the game of start up nations”. After another eventful seven days for the Israeli economy, I can only confirm that statement. For all the good news, for all the new partnerships being formed with overseas investors, there is something very worrying just under the surface.

Let’s start with four pieces of positive soundbites.

A) Last week, I attended the launch ceremony of the Mass Challenge in Jerusalem. Nearly 50 start ups from differing sectors will be housed together in an incubator for about 12 weeks. Mentors and investors will be brought in to visit and to encourage.

Similarly, a new US$100 m biotech fund has just been launched to invest in Israeli pharma and medical kits. And a US15 million agritech incubator has been set up by a group of local and overseas investors. Really vibrant stuff!

B) Cisco has made another yet another purchase in Israel. Cloudlock was started in 2007 in Tel Aviv and has grown to 150 workers. To date, US$38 million had been invested in its efforts to promote security via the cloud. Jon Chambers has announced that he has agreed to a valuation of US$293 to include it in the Cisco empire.

C) MIS is located near Nazereth and makes dental implants, not a very sexy subject to many a folk. However, its 420 workers caught the eye of the NASDAQ company DENTSPLY, which has laid out US$375 m in cash for its sales base in over 50 countries.

D) And in a more general note, the good word on Israeli Fintech continues to seep out. According to KPMG, around about US$ 5.7 billion has been invested globally into the sector in the first half of 2016. Roughly 12% of that can be attributed to Israeli tech. Impressive.

But, and there is a but, the future remains grey. A recent OECD survey of 34 countries ranked Israel as 28th and 29th respectively, when it comes to reading and maths. Japan was placed first. What can of base is that for the next generation of entrepreneurs?

Something needs to change, and fast, when considering the future competitive strengths of the ‘start up nation’.

 

Israel’s worrying economy: Anyone in government listening?

23 June 2016
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Categories: Afternoon Tea in Jerusalem, Business, Israel

Unemployment is way under 6% in Israel. Chinese venture capital is surging into the Holy Land. Some would argue that Israel is bucking a global trend as foreign investment continues to flood in:

……during the first 10 days of June, a total of $237 million were invested, mostly by foreign investors. The first 10 days of May saw investments totaling $28 million, with $327 million invested during the entire month of May. The sum for the first half of 2016 is approaching $2 billion.

But, and there is a big “but” as I have mentioned several times  since the beginning of the year. There is also an increasing surge of worrying signs that the economy is not just slowing down. It is losing its competitive global edge.

For example, the rate of growth for the first quarter of 2016 stood at a paltry 1.3%. An index used by the Bank of Israel, which combines leading economic indicators, progressed by an insignificant 0.13% in May.

The Chief Scientist, Avi Hasson, spelt it out very bluntly this week. Hightech in Israel is struggling, both in order to find the correct resources and in competing with other countries – which have successfully improved on the ‘Israeli formula’.

  • If in 2002, the government invested almost 0.8% of the GDP in high-tech, that stat has dropped to under 0.6%.
  • The country already lacks thousands of engineers.
  • That employment hole is not likely to be filled soon, as currently less than 10% of students apply for a science degree. (In 2004, the proportion was 13%).
  • Both the Bloomberg and WIPO Global Innovation Index show Israel dropping down the ladder by six or seven places over the last year.

If there is a message in all of this info, it is that something major is not right. As Bloomberg itself noted: “Israel’s long-held status as a hotbed of tech innovation is under threat….”. The government seems less interested, tax incentives are no longer competitive and new regulations are piling up.

Google’s chief, Eric Schmidt, and Cisco boss, Jon Chambers, have echoed similar comments in recent weeks. Israel is no longer number the only country in the game of start up nations.

In itself, none of this worries me. Text books are full of economic cycles. Britain led the industrial revolution, based on steam, only to be overtaken by Germany and the USA. Yet today, the UK is still arguably the world’s fifth largest economy. It learned to adapt.

What does concern me, big time, is that for all these warning signs, the Israeli government has not taken one major policy stand on the issue. The mandarins and the politicians in Jerusalem appear either incompetent and / or uncaring as to what will happen to the future of our economy.

Struggling to manage your work schedule? 3 practical tips to change things around you

22 June 2016
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Categories: Afternoon Tea in Jerusalem, Business, Jerusalem

This week, I checked in on one of my newer clients near Jerusalem, a start up in the field of arts. The assignment had not been done. Papers scattered everywhere. Stress written all over their face. And now they had to grapple through a session with their business coach and mentor.

No amount of coffee (nor chocolate) was going to be of any use, surely? And yet……….Time to take a step back.

First things first. I have just seen a lovely quote on Guy Kawasaki’s twitter account. He cited the CEO of YouTube, Susan Wojcicki.

If you are working 24/7, you’re not going to have any interesting ideas.

Never was a truer word said. If you keep burning the candle at either end, you may somehow complete tasks, but you will lose effectiveness. For example, you will start to become hassled and forgo the trust of those around you. Innovation and creation will be concepts of the past.

My client is on the go all day, every day, 24 / 7. They are not hanging near the breakdown zone, but they are not thinking as straight as they should be.

Also this week, I came across an insightful article on the Harvard Business Review from Steven D’Souza. Entitled “Don’t get surprised by burnout”, he discusses the telltale signs that indicate when we are overworking. As he correctly observes: “The truth is, we are much more fragile than we think.”

What I really liked was the suggestion, which reads like a request from the heart.

Welcoming gaps as opportunities to rest, not inconveniences.

Again, another powerful statement. Stop treating 11.00pm as an opportunity to finish off a task in peace and quiet. Once this becomes a habit, you will be sacrificing your beauty sleep. Thus you cannot wake up refreshed, full of engaging thoughts.

Finally, if you are faced with that situation, when there seems so much to do and so little time to do it in, go find a pen and paper.

  • Draw up a chart. Itemise each specific task that has to be completed. That is identify what is a ‘must’ rather than merely ‘a nice to do’.
  • Prioritise the duties in terms of high / medium / low.
  • Estimate how long each one should take to perform.
  • Give each line a specific time entry in your calendar or work diary.

How does this help? Try it for simplicity. Suddenly, having broken up the horror, everything will become so much more doable.

The CEO demands 10 ways to reduce our expenses, or else…….

17 June 2016
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Categories: Afternoon Tea in Jerusalem, Business, Jerusalem

Having trained formally as an economist and now operating as a business mentor in the Jerusalem region, I have seen this scenario upteen times. Either because of a cash flow crisis or because the CEO just feels like, a demand is issued to cut costs.

Depending on the size of your organisation etc, there almost always some likely candidates for the chop – the employee nobody cares for, that extra advert, the new equipment that can be purchased next year, a few accounting tricks with the pay packets, and so the list goes on.

For a more detailed look, you can check out a set of ideas from biz guru Barry Moltz; “10 ways to reduce expenses right now”.  All are worth considering. And most can be summed up under the theory of trying to get ‘more for less’ from your suppliers.

However, while not ignoring the need to control costs, let me point to another solution. How about concentrating on upping expenditure – should I say, investing more resources – in marketing and sales! What would happen if your company took a relatively small sum to beef up those people who go out and bring in real money?

I remember years ago hearing of somebody who bought a large but failing retail outlet in Hong Kong. The new owner’s first move was to increase salaries to baseline employees. The cash started to pour into the tills.

In contrast, I know of one dominant subsidiary, part of an international concern, where the managers overseas are driven by ‘bottom-line numbers’. The default thought process is that if pre-tax profits keep falling, than costs have to be hauled back. Little time is wasted on creating and implementing a new strategy to meet changing demands.

And it is that concept – strategy building and seeing it through – that I stress to my customers as their business coach. Many try to push me back, because such a step can draw out their own weaknesses. However, cost savings only take you so far. Generally, they do not create wealth.

So next time you want to improve your cash flow, try thinking laterally. Consider raising expenditure if you can see there is a reasonable chance that it will provide you with long term additional revenues.

Still searching for Israel’s economy – a sad truth

13 June 2016
1 Comment
Categories: Afternoon Tea in Jerusalem, Business, Israel

Despite the attempts of the cleverest government spin doctors, the Israeli economy is drifting. Worse, nobody seems to be doing too much about it. Last week brought new evidence to that effect.

On the positive side, external investment continues to arrive into selected sectors. Since the so-called BDS – boycott Israel campaign commenced in 2005, FDI has actually tripled. Orbimed, the world’s largest medical VC, has just raised over US$300 million to invest in the Holy Land. Resources are even making their way in to the Arab sector.

As if to prove the point, a competition was held last week featuring former soldiers in the elite 8200 unit. They have initiated start ups like Intensix – handling big data for medical institutions during emergencies – and Sensory Treat, which helps children with special needs. The winners received some healthy handouts. The fact is that on the back of these successes, the average wage in Israel continues to climb steadily.

But, and here is a ‘big but’, “two thirds of Israel’s population employed in the workforce receive below the average national wage”. As I have described before, Israel is a country of two economies.

It is five years since the ‘cottage cheese revolution’, where hundreds of thousands of people protested against the high and rising prices of basic goods, such as cottage cheese and vegetables. The government promised action. Committees were set up. Talk was everywhere. And today?

However since 2011, the cost of a 3.5 room flat in Tel Aviv has climbed from 2.4 million shekels (US$ 0.65 million) to about 3 million shekels. It is estimated that whereas previously it took 130  monthly payments to put down a deposit on a flat, that stat has gone moved onwards to 150 payments. Younger couples, the core of the new middle class, are being squeezed out of the housing market. Meanwhile, vested interests continue to block reforms in the banking and vegetables sectors, also a major negative impact on the middle classes.

Where to now? The Israeli government has yet to make a move. There again, we have been waiting for something serious economic policy to emerge for at least two years. And patience is not a commodity known to be available in quantity in the Middle East.

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