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Intel, Israel, & your new microprocessor

29 December 2009
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Categories: Business, Israel

Intel has been operating in Israel since 1974.

Located on 4 sites. Over 6,500 workers. Export sales are expected to top US$3 billion in 2009. A successful r&d team, backed by Intel’s first production line outside the States. All-in-all, a very hefty operation for the multinational.

For example, the team in Haifa had a leading role in Centrino, found in many laptops around the globe.

The same set up has developed Sandy Bridge, a leading edge microprocessor. It will be larger and more energy-efficient than its competitors. And it should be on sale in early 2011.

Intel laid the path for many other conglomerates. Today, Siemens, Microsoft, Motorola, HP are just some of the many international conglomerates with larger facilities in Israel. Whether it be in the fields of medical devices, computer services, communications or otherwise, these companies provide a benefit to people around the world.

And here’s the catch, if not the hypocrisy. In Europe, and especially in the UK, there exist pressure groups, which seek to convince people not to buy Israeli products. These same people disseminate their information via their computers and their mobile phones……..which function with loads of tech from the Holy Land.

To quote my young teenager son: “Duh!”

Gaza’s economy – one year on

28 December 2009
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Categories: Business, Israel, Palestinians

It is a year since Israel invaded Gaza. Many NGOs report that the local Palestinian economy has been devasted. A closer inspection reveals a more complciated picture.

 Israel’s action was a response to the thousands of rockets that had been fired at southern towns since the withdrawl from Gaza in 2005. On the anniversary of the start of hostilities this week, Hamas organised a  “mass” demonstration of support. Estimates of the turnout vary, but as the Assocated Press commented:

…the Hamas call to rally was met with indifference. Ignoring a siren meant to call for a minute’s silence, cars whizzed by and pedestrians kept walking……”I wish they had commemorated the war by opening a factory. That would have been better than this,” said Gaza resident Rami Mohammed, 30.

And that is the problem for the Hamas leadership. Not all the people are stupid all the time. They will not continuously accept that Israel is to blame for their economic problems.

Take a look at the “tunnel economy”. First, it has created a new elite, where many of the members are linked to the Hamas leadership. And in true Orwellian irony, Hamas had ousted the previous Fatah leadership, which was seen as ridden with corruption.

Second, the underground economy has become an employer of child labour, a total contradiction of humanitarian ground rules, and thus a cause for more discontent.

There is another secret side to the economy. On the one hand, Hamas cries “poverty” to whoever will listen. And yet, when the time comes, it showers money on to the streets. Pictures from the Eid religious festival revealed shops full of produce.

Similarly, Hamas is thought to have invested around US$2 m in celebrating its battles against the Israeli army. But also this week,

…… sources in Gaza have reported of a new corruption affair in Hamas’ transportation ministry. According to one testimony, a senior ministry official named Ziad Harara took tens of thousands of dollars and disappeared……

This affair is related to the driving studies industry in the Strip. According to reports, senior transportation ministry officials take about $658-790 for issuing a driving license, even for people who do fail to meet the driving test’s demands. Hamas government workers receive a $100 bribe for letting people pass a theory driving test without taking it.

Motivation and creativity – a new year tip

26 December 2009
1 Comment
Categories: Business

Motivating your worker: With all that cheer in the air, surely nothing could be easier at this time of year.

And yet so many of us just simply miss the boat.

I recently wrote about how inspiring bosses are those who find a way to become a friend with their colleagues. Call it “micro social networking” if you will.

An article in Harvard Business Review labels this as “progress”.

On days when workers have the sense they’re making headway in their jobs, or when they receive support that helps them overcome obstacles, their emotions are most positive and their drive to succeed is at its peak. On days when they feel they are spinning their wheels or encountering roadblocks to meaningful accomplishment, their moods and motivation are lowest.

Note how this is all based around “a feel good” factor. People want to put in more effort when they believe that are achieving something.

Interestingly, even when tasks are outsourced, the external team needs to be encouraged in similar ways.  In an executive brief, which I was recently handed, it was explained that:

The quality of an outsource team’s output is directly proportional to the satisfaction they have in fulfilling the demands of your business. And much of this hinges on how well you value them as workers and their work. How do you make them feel that they are an integral part of your success? How do you make them feel as if they were your employees instead of outsourced consultants and workers?

Yet again, it’s all about making the person – employee or supplier – feel much better about themselves.

An extension of this approach is getting teams to be creative, seeing beyond their comfort zone. A fascinating article by Sue Arnold in the December 2009 issue of “Ruminations” illustrates this point. She concludes by observing that “creativity is essential  for any business to survive and thrive. Everyone has latent creative talent within them, but this often remains an untilised resource”.

And we all know that we are at our most creative when we are feeling motivated.

Now there’s a message for all managers wishing to start off the new year on a dynamic note.

3 cheers for good managers

21 December 2009
2 Comments
Categories: Business, Israel

Earlier this year, I wrote about Emblaze, a typically successful Israeli hightech company, but which had found itself plunging towards disaster. I cited the reasons of poor management and hinted at an arrogant corporate culture.

Many have argued that similar approaches were prevalent amongst corporate and mortgage bankers in America. And in Britain, the government has been found wanting, trying to buy its way to growth while revenue was drying up. In all these sitations, sooner or later, somebody realises that “the king is naked”, and thus begins a very painfull fall out.

Correspondence with a gentleman, named Colin, has brought to my attention that Emblaze has turned itself around. He claims that much has to do with the role of Guy Bernstein, the CEO, establishing new commercial relationships.

As I wrote to Colin yesterday, it is always interesting to see how companies overcome the seemingly insurmountable. Lo and behold, in today’s Hebrew newspaper, Yediot, there is a listing of several Israeli companies, who have pulled themselves away from bankruptcy.

The companies are located in the clothing, food and retail sectors. And for all the unique stories and internal processes, they have common themes.

  • Most were bought out, but the basic concepts have been retained
  • Most have benefitted from a merging with other logistical systems, resulting in significant efficiencies.
  • Most have benefited from a small injection of money.
  • They all reaped the benefits of a strategic management team.

Bottom line: In a year of economic recession, they have survived, expanded, taken on new staff. It’s smiling time again.

And the lesson for senior management? The phrases of arrogance, resting on your laurels, complacency come searing to the surface.

The recovery programmes implemented were clearly not that difficult nor complex (although probably painful). Generally, the previous set of owners had misread the dynamics. It would appear that for a business to maintain its success especially in a downturn, it needs to have in place a mechanism to further management creativity and innovation.

Why we hate marketing gurus

17 December 2009
3 Comments
Categories: Business

Most people have a marketing guru. Many of us have a favourite commentator on management or business studies.

And what I often find is that if you talk to people after they have finished reading a new item by their hero, they will say something like: “Brilliant, but…..” and then sigh. Why the disappointment? Why the annoyance?

Here’s what I mean. One of the most popular people around today is Keith Ferrazzi, and deservedly so. His latest 2 minute presentation showed people how not to be a “twitter idiot”. 5 innocuous tips.

And that’s the point. They are very simple and obvious. In a nutshell, he calls on people to provide generous help, but not to lecture. Rule numero uno of networking. Surely, we all know that and do that. But, Keith is correct. We forget and we do not. Cringe time!

Canadian Karl Bryan is in a similar field. In a recent post, he observed how all of us occasionally have to write copy to promote a project, but often we come unstuck just on the structure of the text. His five stages of approach to such an assignment are:

  • Command Attention
  • Showcase Benefits of Products/Services
  • Prove the Benefits
  • Persuade People to Embrace the Benefits
  • Call to Action

So why does the word “obvious” leap back in my head? Why don’t I (we) follow these basic procedures all the time? Ouch, how these people annoy me.

So, like it or not, we seek these gurus and their frustratingly simple mailings. And who needs them? All of us, whether you are a start up who requires guidance or a multinational with vast internal resources. We all forget the obvious, but should realise it takes an outsider to drag us back into line.

Let me close with two brief anecdotes to illustrate the point. Last week, I took my family cross country jeep riding. Unfortunately, there was a mistake with the booking and my wife was upset. The matter was sorted out and we had a good time.

Still, no compensation was suggested. Further, we later found out that there were also family discounts, which were never offered. So, we paid full price for a nice day, having been offended. Guess who will not back be going back there? And guess which salesperson has not realised the mistake in the big picture? Sad.

 A musician, Dave Carroll, had difficulty with United Airlines.  United apparently damaged his treasured Taylor guitar ($3500) during a flight.  Dave spent over 9 months trying to get United to pay for damages.  During his final exchange with the United Customer Relations Manager, he stated that he was left with no choice other than to create a music video for youtube exposing their lack of cooperation.  The Manager responded : “Good luck with that one, pal”.

The video has since received over 5.5 million hits.  United Airlines contacted the musician and attempted settlement in exchange for pulling the video. Naturally his response was: “Good luck with that one, pal”.

Taylor Guitars sent the musician 2 new custom guitars in appreciation for the product recognition from the video that has lead to a sharp increase in orders. https://www.youtube.com/watch?v=5YGc4zOqozo&NR=1

Foreign investment in Israel: Hightech & traditional industries benefit

16 December 2009
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Categories: Business, Israel

It’s been a bumper week for foreign direct investment in Israel. American pharma multinational, Abbott Laboratories, paid US$123m for control of Starlims, an Israeli data management software enterprise.

That news was preceded 24 hours earlier by the purchase of Optonol, a small company just outside Jerusalem, which has developed  a brilliant application to treat glaucoma. Medical device giant, Alcon, has offered a deal potentially valued at hundreds of millions of dollars.

This is all part of a growing trend. A UK based investor report noted that for the period August – October 2009, foreign direct investment in to Israel, hit over US$250 million every month.

Significantly, not all of this financial flow is directed at high tech. For example, in a statement released by the Israeli Tourism Ministry, there has been an “unprecedented demand from entrepreneurs to invest in hotels.”

37 entrepreneurs recently replied to the Tourism Ministry’s invitation for grant allocations to establish new hotels and to return buildings once used as hotels to their former use. The Tourism Ministry allocated 300 million NIS to providing grants for entrepreneurs within the framework of the 2009-2010 work plan for this dual purpose. An extra 100 million NIS will be allocated to this program next year in line with demand.

In accordance with the Law for the Encouragement of Capital Investment in Israel, the Tourism Ministry offers a higher level of participation: 20% of the total investment excluding land costs.

It has already been announced that the Ritz Carlton chain intends to open its first hotel in Israel in 2012.

Israel economic updates

15 December 2009
1 Comment
Categories: Business, Israel

Yuval Steinitz, Israel’s finance minister, issued a warning at the end of last week. Despite the growth foreseen in 2010, the year will still bring along some unexpected aftershocks from the credit crunch.

Possibly. It is certainly true that few expect the strong gains of the stock market to continue. Even the most conservative of unit trusts have gained 20% since the mid-summer.

With that noted, this week has again seen a string of good news.

An IMF team is currently in Israel. Despite reservations over the country’s tax reforms, planned for January 2010, the draft report states that:

 Since the beginning of 2008 it appears that Israel has been acquiring safe haven status.

Encouraging. So is the report that for the first time since the onset of the downturn, the current quarter will see more people hired than fired. This optimism is clearly reflected in the hightech sector, which has been of key importance in Israel’s continuous growth.

On a different front, 2 independent agencies have ranked Israel as top of their international list of growing real estate markets. This is significant because the building industry feeds into many other parts of the economy, and thus provides an all-round economic stimulus.

Palestinian economy: yesterday and today

10 December 2009
1 Comment
Categories: Business, Israel, Palestinians

Until 5th June 1967, East Jerusalem and the West Bank were part of the Hashemite Kingdom, a fact recognised only by Pakistan and by Britain. Gaza was governed by Egypt.

If you look at reports from the World Bank or various UN agencies for the period, these Palestinian territories were amongst the poorest in the world.

“The Israel Test”, a new book by George Gilder, throws some interesting light on what happened to the standard of living after Israel took control. Citing a string of UN reports, Gilder notes that the Palestinian economy took off. In an interview this week, he observed:

When Israel inherited the territories in 1967, it administered them, but much more loosely than it administered it own economy. And so the territories became the fastest growing economy on the face of the earth. Some 250,000 Israeli settlers moved to these previously Judenrein areas, and they attracted some two million Arab settlers. Eight Arabs moved in for every Jew.

This was a golden age for Arab Palestinians. Their numbers tripled, their per capita incomes also tripled, their educational levels soared, and their life expectancy rose from 42 to some 70 years.

……..the delivery by the international community of the territories to the PLO (in 1993), who then brought to a screeching halt all the economic development. The PLO caused a 40 percent drop in GDP per capita incomes, and just generally reversed the huge achievements of the previous 20 years.

The moment Chairman Arafat launched the Intifada in September 2000, the Palestinian economy was bound to go into free fall. Labourers were not allowed into Israel. The industrial area at the Erez checkpoint was decimated. Even money given to the Palestinians to rebuild Gaza after Israeli withdrawal – such as for the greenhouses project – seemed to vanish.

Today, there seems to be 2 Palestinian economies. Clearly, there are parts of the West Bank, which are doing well under the tutelage of President Abu Mazen.  For example, the Ramallah stock exchange is on a high.

Yet down in Gaza, after 2 years of Hamas rule, there appears to be little economic progress. Associated Press reports that the situation is so bad that people are buying fake cancer prognoses in order to leave.

Managers aversion to saying “thank you”

9 December 2009
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Categories: Business

Two actual work situations:

A) Companies are beginning to see the end of the recession. Many have survived after dismissing workers and / or cutting back on benefits. Not pleasant for those being squeezed, but understandable. And yet, now that there good times are on the horizon, we all know of senior management that do not return the favour in a tangible manner.

B) My friend returned home recently very upset. She was entering the final phase of a project for the parent company and a bug was found in one of her initial tasks. For all her significant efforts, she felt picked on.

Although I have condensed complex issues in to a few lines, they have a common theme. In the first situation, employees know that they have no reason to work hard, because they will never be appreciated. Similarly, my friend’s counterparts abroad will found it difficult to extract that extra mile out of her, as they could only comment on faults.

Bottom line: Nobody can manage to say thanks. Productivity, and thus revenue, and thus profits, suffers.

Simple, ain’t it. You don’t need an MBA to get it , and yet most mangers just cannot understand.

A few weeks ago, I attended a Dale Carnegie training course on this subject. The course is run all over the world, which shows the need and demand. Stats were quoted all over the place to prove the basic point. 

Research from Mercer Delta shows that engaged employees deliver 4 times more value to the organisation than non-engaged employees.

Dr Robert Brooks has written extensively on this theme.

If there’s one thing the winners of the Globe 100’s Top Places to Work have in common, it’s this: They all believe it’s good business to keep employees satisfied, motivated, and working hard. Show them respect. But in today’s economy, when layoffs are more common than bonuses and perks, how do you do that?…… In my consultations I have found that employees will be motivated to perform with quality and energy in those environments in which they feel appreciated, they feel their voice and opinion is heard and respected, they know that they can advance as their skills are honed, and they know that their bosses are accessible and supportive.

Brooks and the Carnegie lecture have two factors in common. First, they recognise that managers are often hired because of academic qualifications or experience, but little emphasis is focused on their ability to inspire.

Second, the key to inspiring is learning how to become a friend with your colleagues. In return, the advice offered and the requests inparted by “friends” are listened to and acted upon. In modern parlance, managers need to learn to network.

Find a way to show workers sincere appreciation and they will perform. It’s usually cheaper than a pay rise. No technology is required.

Ever wondered why so many people in positions of responsibility fail at this task?

Networking: who needs it? Jerusalem experiences

7 December 2009
1 Comment
Categories: Business, Jerusalem

Networking is one of those key buzz words, which is turned out ad nauseam by marketing gurus. However, a recent experience in Jerusalem focused the importance of the concept and why we cannot run away from it.

Let’s quickly examine how networking fits into our lives. Keith Ferrazzi summed it nicely. By liaising and mixing with people, we succeed. Therefore, we have to get up from our comfort zones and find out who can help us.

Simple no? Well, not if you are shy, physically restricted, uncertain, or whatever. In other words, the vast majority of us seemingly have no idea how to go about networking.

Enter Ezra Butler. I was the moderator at the latest meeting of the Jerusalem Business Networking Forum, when Ezra spoke. To sum up his 20 minute presentation in one sentence: Networking is all about making friends, and nothing more complicated than that.

It is friends who turn to each other for help in commercial matters. Friends trust each other on difficult subjects. Friends rely on the advice of each other. And you make friends by listening to the needs of a new acquaintance.

On the flip side, if you walk into a meeting of strangers and start pumping them with your value proposition, you tend to end up with nothing more than a 2 minute chat. Follow up is minimal at best. 

Listening often takes more than a couple of minutes of your time. The rewards are stronger and last longer.

Maybe there is a spiritual lesson in all of this. Jerusalem has been around for over 5,000 years. Its religious monuments have borne the stories of millions in that time. And the city still stands today.

How Israel coped with the credit crunch

6 December 2009
1 Comment
Categories: Business, Israel

The international credit crunch centred around a failed mortgage system in the USA and large, greedy international banks. Israel had been forced to sort out those issues years previously, so faced the downturn with a structurally safer economy.

Still, Israel’s strength lies in an export based system, and the world financial system was contracting. What was the Bank of Israel (BoI) and the Finance Ministry to do?

Professor Zvi Ackstein is the deputy governor at the B0I. In a fascinating interview in this Friday’s Hebrew newspaper, Yediot, he describes how his team responded.

They quickly identified that the shekel was gaining strength, primarily against the dollar. This was cutting in to the profitability of many companies, thus endangering employment. They also noticed that the change in the exchange rate was due to speculation, and not as a result of differences in import / export ratios.

The BoI acted. It deliberately and openly set out to buy dollars. This policy has continued to date. The results:

  • The shekel is slowly beginning to lose value against the dollar, helping Israeli exports maintain their competitive levels.
  • The BoI predicts serious growth of around 4% for 2010.
  • Interest rates will continue to rise, but they are not expected to leap forward under present circumstances.

Me thinks there are some lessons here for the wise folks of the international finance community.

Observations on the Palestinian economy

4 December 2009
1 Comment
Categories: Business, Palestinians

Until the onset of the second Intifada in 2000, the World Bank considered the Palestinian economy as one of the fastest growing economies on record. Years of suicide bombers, Israel restricting labourers entering the country, incursions into Gaza and more had left the Palestinian territories broke.

In the past year or so, it has been accepted that violence is down. Israel has removed dozens of roadblocks. Palestinians are seen back in the Israeli workforce. Have these changes combined to give an economic boost?

There is plenty of anecdotal evidence to report strong shifts on the ground. For example, independent journalist Tom Gross wrote in the Wall Street Journal that:

As I sat in the plush office of Ahmad Aweidah, the suave British-educated banker who heads the Palestinian Securities Exchange, he told me that the Nablus stock market was the second best-performing in the world so far in 2009, after Shanghai. (Aweidah’s office looks directly across from the palatial residence of Palestinian billionaire Munib al-Masri, the wealthiest man in the West Bank.)

Later I met Bashir al-Shakah, director of Nablus’s gleaming new cinema, where four of the latest Hollywood hits were playing that day. Most movies were sold out, he noted, proudly adding that the venue had already hosted a film festival since it opened in June.

On his own blog, Gross posted pictures, originally shown in the newspaper “Palestine Today”. They show Gaza during the recent Eid festivities. Shops full of goods, a galaxy away from the photos shown by most of the world media.

This information comes as a welcome relief to the stated economic aims of Khaled Mashaal, head of the Hamas political bureau in Damascus. He was quoted on the Filisteen al-’An website as saying: “most of Hamas’ funds and efforts are invested in the resistance and military preparations”

The Wall Street Journal assesses that the Palestinian economy will grow by 5% in 2009, despite the global credit crunch and having to absorb returnees from Dubai. 

Any impact of lower remittances would most likely be softened if those workers find work in the West Bank. With a building boom under way in Ramallah and other Palestinian cities, fueled partly by international aid money totaling $1.7 billion in 2008, many returning from Dubai are finding jobs.

Innovator’s DNA – has Israel discovered the code?

3 December 2009
1 Comment
Categories: Business, Israel

“How do I find innovative people for my organization? And how can I become more innovative myself?”

Thus commences a fascinating read from The Harvard Business Review. The authors ask what is the common link between “visionary entrepreneurs like Apple’s Steve Jobs, Amazon’s Jeff Bezos, eBay’s Pierre Omidyar, and P&G’s A.G. Lafley”. And they come up with 5 skills that set apart such people from us ordinary types.

We found that innovative entrepreneurs (who are also CEOs) spend 50% more time on these discovery activities than do CEOs with no track record for innovation. Together, these skills make up what we call the innovator’s DNA. And the good news is, if you’re not born with it, you can cultivate it. 

Imagine that you have an identical twin, endowed with the same brains and natural talents that you have. You’re both given one week to come up with a creative new business-venture idea. During that week, you come up with ideas alone in your room. In contrast, your twin (1) talks with 10 people—including an engineer, a musician, a stay-at-home dad, and a designer—about the venture, (2) visits three innovative start-ups to observe what they do, (3) samples five “new to the market” products, (4) shows a prototype he’s built to five people, and (5) asks the questions “What if I tried this?” and “Why do you do that?” at least 10 times each day during these networking, observing, and experimenting activities. Who do you bet will come up with the more innovative (and doable) idea?

So what? Well, there has been much talk recently about Israel’s ability to use innovation skills in order to lead the economy away from recession.

Here’s the thing. Israel has not fared well in the past decade with its eduction standards, particularly at primary and secondary levels. And yet, the products of the system are entering economic life well prepared for the challenges.

As I parent, I am amazed. I cannot describe how many times I feel distraught at the lack of homework and poor attitude, sloppiness.  BUT….

But the article says you can learn to be innovative. I can see how the methodology is similar to how my children cope with their projects at school.

Wierd, yet it’s worth asking. Is the breakthrough to finding the code of “innovator’s DNA” hidden by the muck of a failing education system?

5 healthy stories from Israel’s economy

2 December 2009
4 Comments
Categories: Business, Israel

As the Holy Land heads off towards Christmas and the cold weather approaches, Israel’s economy is sending out a string of healthy messages.

Israel’s debt-to-GDP ratio has risen only marginally during the international credit crunch. In comparison, other countries like the UK have suffered much worse and will have to pay for their governments’ rescue programmes for years to come via higher taxes.

That macro supervision is encouraging. In parallel, analysts showed their faith in the Israeli economy this week. Bank of America-Merrill Lynch commented that “investors should overweight Israel, at least until the dust settles in Dubai”. The stock market has recorded solid gains for the past 3 days.

On the micro level, Kodak Israel will be hiring new workers. The company is one of several multinationals, such as Intel, Siemens and Microsoft, with succesful r&d centres in Israel. The local branch will be supporting the software development of the Kodak’s preprinting and digital imaging systems.

Foreign investment is also picking up. Pfizer have just committed to a strategic partnership with Protalix, a contract valued at up to US$110 million. Go back 5 years and Protalix was barely a commercial germ in  small industrial incubator.

Dune Networks is a similar story. Founded less than a decade ago and located on an agricultural kibbutz, the company has been sold for US$200 million to Broadcom, a major player in the fabless semiconductor market. This places Broadcom’s level of investment in Israel at nearly US$600 million.

Successful start ups don’t need budgets, correct?

1 December 2009
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Categories: Business, Jerusalem

When looking at the factors which go towards a successful start-up, the importance of a solid vision cannot be underestimated. This enables you, the entrepreneur, to see what resources are required and when.

OK, so you now have a crystal clear picture of what you want to achieve and by when. Fine. It will cost roughly whatever. That can be financed by a bank loan or an investor. Time to start making the phone calls, no?

It’s a that stage you receive an annoying reality check from your spouse. “Honey, shouldn’t you draw up a budget?” And we all know the response. “Oh gee, thanks for your concern (newspeak for ‘keep out of it’), but I am only a start-up. Those excel spreadsheets are not for me.”

Wrong! But why? Because we all need a budget, whether you are a 10 year old kid, stretching your pocket money to the last sweet, or if you are about to invest your savings in an untried project.

A budget is like as a vision. It forces you to think.

When initiated properly, it encourages you to admit exactly what you need and how much the project will cost. In parallel, on the revenue side, you will be forced to justify your market model. Not a pleasant process, but very necessary.

And if you think that exercise was painful enough, get this. Imagine that you have finally spent days on your spreadsheets. You produce some positive figures, which are checked by your ever-supportive spouse. You are relieved and are about to pour a celebratory glass of wine, when you hear a tentative voice from the computer room: “Your cash flow is negative.”

“What’s that? How can it be if my budget looks sound?” you scream, as your glass narrowly misses the laptop. “And anyway, why do I need a cash flow, if I have a budget?”

It’s not back to square one, but more financial thought is demanded, and rightly so.

If you want some tips on cash flow, I suggest you look at this management blog. For future entrepreneurs, I have been asked by WritePoint to conduct a course on “how to start-up a successful business”. For further details, contact Chaya on 02 5716668 or see https://writepoint.com/blog/?p=961

Dubai 0: Israel 1

29 November 2009
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Categories: Business, Israel, Jerusalem, Palestinians

Like Iceland, Dubai tried to expand too fast, until boring old reality caught up with it. Sooner or later, people will not finance debt without reward.

Meanwhile, Israel plods along with its mundane officials ensuring that the essentials are done right. Hence, the encouraging growth predictions from the Treasury, the IMF, Barclays Capital and others for 2010.

So why are most Israeli financiers rather amused at the Dubai fiasco? Well, first of all, because of the malicious Arab Boycott, officially Israelis are not allowed to conduct affairs with Dubai. Just speak to tennis player Shahar Peer, who has been banned from taking part in competitions there.

So, maybe the view from the Holy Land is that these guys are getting what it deserves.

On the other hand, business encourages any politicians, including those from Dubai, to be hypocrites. Today’s Israeli press reports of Kibbutz Afikim and maybe a dozen other agricultural companies that have or are conducting commerce in the country. I have a Jerusalem friend, who regularly travels there to go to exhibitions, where he meets other Hebrew speakers. etc etc etc.

Yes, Israel’s wealthy have bought interests in Dubai and will suffer, at least in the short-term. Lev Leviev has a flagship diamond shop in Dubai. Yes, Israel’s stock market will dip temporarily in sympathy with its rivals around the world.

Actually, the most interesting effect on Israel may come through the back door. It is estimated that up to 100,000 Palestinians are in danger of losing their jobs and being thrown out of Dubai. I wonder where they will go?

Bank of Israel gets it right

26 November 2009
2 Comments
Categories: Business, Israel

Earlier this week, I commented on how the Bank of Israel had ignored local pressure groups and fought its corner on behalf of the whole economy. Interest rates were raised by 0.25% to 1%.

3 days later, and the governor, Stanley Fisher, is bathing in praise.

Avi Temkin in the Globes financial newspaper described Fisher as a “light unto central banks”. 

Fischer is simply ahead of other economies, and is blazing a new trail that others will follow in a while. The Bank of Israel Governor has not hidden in recent months his opinion that countries must abandon their expansionary policies if economic conditions obligate and enable them to do so. His latest step is a type of call to all to move in this direction, and a sign to the world that talking about a continuation of expansionary policies for a long period is not accepted by everybody.

Michael Eisenberg, a popular blogger and venture capitalist, notes that Fisher’s term in office will soon be over. He recommneds that Prime Minister Netanyahu must keep him on.

In some ways, the softest and sweetest praise has emerged from the Wall Street Journal. Its headline noted that the interest increase came on the back of an economic turnaround. As I have said several times in recent months, many other financial can only be jealous of such a relatively strong economy.

The signs for 2010 and Israel’s economy continue to look good. Well done, Stanley.

When a rise in interest rates is good news

24 November 2009
1 Comment
Categories: Business, Israel

Usually, when a central bank raises interest rates, the sectorial lobbyists press their automatic convulsion button; trades unions, manufacturers, small business groups, and anti-government newspapers.

True the world over, and definitely true in Israel. Just look at the Hebrew press to judge the reactions to the Bank of Israel’s surprise announcement yesterday to raise the inter bank rate by 0.25% to 1.00%.  

In fact, the change is a sign of praise for the economy and those running it. It shows that the country is becoming more worried about possible inflation and public sector deficits rather than the recession. In other words, Israel’s economy is growing.

There is much statistical and anecdotal evidence for this – eg, surveys of the labour market. One strong indication is what has been happening on the Tel Aviv Stock Exchange (TASE). A 9 month survey to 30.9.09 shows how shares are shaking off volatility and recording deep gains.

To quote from part of the report:

In August TASE saw its first equity IPO in eighteen months. Foreign financial investors injected $0.9 billion to TASE.
Prices of corporate bonds, which had declined in the closing four months of 2008, staged a comeback as well during the period under review. In the corporate bond market mainly banks and a number of large companies raised capital in public offerings and private placements to institutional investors.

TA-25 and International indices – 1-9/2009
In USD terms

The TASE has been expecting higher interest rates for some time. The fact that they have not appeared for 3 months will not arrest a further rise in prices for the near future at least. Let us hope that the investors are showing their confidence in the economy and not just fuelling another market sell out.

I want to start up my business, but…..(1)

23 November 2009
1 Comment
Categories: Business

Whether you are a budding entrepreneur or business advisor, we all know that phrase. We feel the trepidation behind the voice. “I have a great idea, but how do I convert it into a go project?”

So the first thing many people do these days is to google ‘how to start up’. And they will invariably hit a site offering 10 key points to make your business a success.

Very useful…or not? Because these simple facts of life often demand that you possess money, work space, a website, and loads of other resources that 99% of start ups do not have. Oops, and back you go to square one.

Looking for a fresh approach, there are plenty of other factors to consider. All they will cost you is a bit of time and patience. And they set you up in a much healthier position.

First, work out your vision; a very clearly defined idea of where you want to be after 12 months and 3 years. Simple? Actually, when many people carry out this exercise fully, they end up asking a lot of very searching questions of themselves and their chosen path of gold.

Even more important is that the resources they had initially thought that were required are way now different. They have changed in nature and in scale. Time and money saved before you start.

Then, once you have understood your vision, summarise it in a 15 second “elevator speech”. If you cannot do that, it implies that you have not worked out in enough detail what you want to do. And that means you are not sure what you are selling. Ouch!

When you have completed these seemingly simple tasks, you will have developed a reasonable degree of confidence in what you want to deliver to the waiting public. So what?

Look around you. Most successful new enterprises have been created by people full of themselves. Obama has used the phrase “yes, we can”. He is only suggesting that all of us can control what we want to achieve.

It is at this point that you are ready to look in on those necessary inputs. The difference is you will know exactly how much you need. The next blog describes the process of evaluating resources.

Jerusalem: hot, holy & a hightech success

22 November 2009
1 Comment
Categories: Business, Israel, Jerusalem

If you were to judge by the reporting of the international media, Jerusalem today is a city waiting to explode.

The Israeli government is accused of building on Palestinian land in Gilo. Actually Gilo is a full suburb of Jerusalem with over 30,000 residents, and the Jerusalem Municipal Planning Committee has also granted permits for 5,000 new apartments to be built for Palestinians in the east of the city.

In parallel, thousands of ultra-orthodox Jews have been demonstrating violently against the opening on the Sabbath of the local Intel factory.

The fact is that commercially, Jerusalem is one on the most important facets of Israel’s hightech community. And this statement does not just rest on Intel’s existing complex in the city. For example, this coming week, the corner-stone of a new IDPj factoy will be laid, which will employ a further 200 locals.

According to the BioJerusalem website, “nearly half of the biotech research and half of the medical research in Israel is conducted in Jerusalem at the Hebrew University of Jerusalem and its affiliate Hadassah Medical Center”. In fact, down the road from Intel, a new nanotech centre is being completed.

Israel’s capital city hosts many of the world’s leaders in solar energy. LUZ began its history in Jerusalem. GSE has created a new technology for solar panels. Leviathan (wind energy) and Cequesta (water treatment) lead the way in other aspects of the alternative energy business.

Jerusalem has an amazing biblical and modern history. If left to the ill of extrmists or the simplistic writings of journalist meeting deadlines, the true successes of the city will be lost to the world.

 

 

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