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What Netanyahu will not tell about the Israeli economy

29 June 2019
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Categories: Afternoon Tea in Jerusalem, Blog, Business, Israel

When it comes to the economy and you are an incumbent Prime Minister chasing another term, there are two rules: talk up the good news and hide the bad news.

Israel’s PM, Binyamin Netanyahu, last week was rightly able to boast about Israel’s success in cyber technology and also the country’s low unemployment rate of 3.6%.

The problem is that Israel is about to have a second general election within 6 months. That means that Netanyahu’s government spent the run up to tone recent election ignoring economic woes. Those awful numbers and their implications can no longer be hidden from the eyes of the voters.

Recap: By the end of 2018, it was becoming increasingly evident that the government budget deficit was getting out of control – shooting through the accepted target of 3% of GDP. The previous Governor of the Bank of Israel had warned against tax cuts and found herself out of a job. The Ministry of Finance repeatedly assured everyone that everything was a temporary blip. Aha!

I and other commentators have been writing on the subject for a long time. And what action of leadership have we seen this month to tackle the problem?

  • The new Governor of the Bank of Israel, initially seen as a puppet of the Prime Minister, has warned of a debt ratio of 4.5%. That will damage the country’s ability to raise money for infrastructure projects. The larger the debt, the harsher the measures required.
  • Apparently, the DG of the Ministry of Finance, Shai Babad has stated that Shaul Meridor is unfit to head the budget department. In other words, the two top civil servants on the matter do not trust each other. Oops!
  • Some initial budget cuts were made a few days ago, but it looks like a hatch job to appease the markets. Everyone accepts that until there is an election on September 17th and a new government is formed  – probably many weeks later – nothing will happen.

In other words, Netanyahu and his ministers are so busy saving themselves and their party that the country’s financial safety will just have to wait.

How to estimate the value of what Israeli tech means to Europe?

6 June 2019
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Categories: Afternoon Tea in Jerusalem, Blog, Business, Israel, Palestinians

Israel has its detractors in Europe. For decades, car manufacturers would not sell to the Holy Land. Today, the leader of Britain’s main opposition party, Jeremy Corbyn, cannot mention the word Israel, except in a manner that challenges the right of the country to exist.

The question remains. Can Europe do without Israel?

Israel…….. (has) around 1 startup for every 1,400 people. Some of these startups have gone on to be high-profile exits — Waze, which sold to Google for $1.3 billion, and recently Mobileye to Intel for $15.3 billion, among many, many others – (technologies used by hundreds of millions of Europeans daily). Just for comparison, France has .112 startups for every 1,400 people. Germany has .056 startups for every 1,400 people, and the UK has .21 startups for every 1,400 people.

I just read today that the “European Union has awarded 742 Million Euro to 1,062 Israeli Scientific Research Projects”. That must be a reason for that.

Now those same detractors of Israel may object to this use of taxpayers money. At least it is being handed out in a transparent and accountable manner, as opposed to the billions available for the Palestinians. At the same time, it is money that eventually benefits peoples of all kinds, across national divides.

I recommend that you read the press release in full.

The EU Delegation to Israel, together with the Israel-Europe Research and Innovation Directorate (ISERD) and the Israel Innovation Authority, celebrated scientific cooperation under the Horizon 2020 program with an awards ceremony on June 4th at the Peres Center for Research and Innovation in Jaffa. Awards were presented to 423 Israeli companies and researchers that won Horizon 2020 grants in 2018. Grants totaling over 742 Million Euro have been awarded to 1,062 Israeli projects since the beginning of the program through the end of 2018.

The Horizon 2020 program is the largest research and innovation program in the world, amounting to approximately 80 Billion Euro over seven years.

International cooperation in research and innovation is a strategic priority for the EU. It allows for tackling global societal challenges more effectively, creates business opportunities, and makes scientific diplomacy a driving force for the external policy of Europe.

Israel has been a partner in the EU’s research and innovation framework programs since 1996 and was the first non-European country to join it. Over the years, the EU-Israel partnership has strengthened Israeli academic and industrial excellence, led to investments in research infrastructure, and enabled long-term, innovative research

The program has enabled Israeli companies, researchers, and innovators to gain access to European partners, to integrate into an extensive infrastructure of European research, and participate in flagship projects in the fields of quantum technologies, graphene and brain research. The European Research Council (ERC), which is part of Horizon 2020, supports ground-breaking research at the frontiers of human endeavour. Israeli researchers have been extremely successful in the ERC programme and Israeli universities and research institutes can be found among the top 10 organisations, worldwide, hosting ERC grantees.

EU Ambassador to Israel Emanuele Giaufret said: “Every year, we celebrate EU-Israeli collaboration in research and innovation and honor the Israeli winners in the EU’s research and innovation program, Horizon 2020. We hosted a ‘plastic-free’ ceremony and event to show support for a critical area where the EU has taken on global leadership. Policies promoting sustainability of the planet for future generations need to be supported with technologies, research, and innovative solutions, where EU-Israel cooperation can play a key role.”

Dr. Ami Appelbaum, Chief Scientist at the Israel Ministry of Economy and Industry, Chairman of the Israel Innovation Authority, and Chairman of ISERD’s Steering Committee noted that: “The prestigious European Framework Program enables industry and academia in Israel to compete in the world of excellence and innovation. The average success rate for eligible applicants is only about 14%, so winning a grant in the program is a sign of quality and excellence for both researchers and companies. The European Framework Program allows for individual proposals and combined proposals with European partners, opening the door for research and business cooperation with European entities beyond the significant funding they already receive.”

Nili Shalev, Director General of ISERD, added: “The European Framework Program provides companies and researchers with numerous advantages besides the generous funding grants. It elevates the quality of research, enables recruitment of high-quality workers, provides investment in advanced equipment, and facilitates work at international standards. The grant enables companies to cut the time it takes to go to market and enables interaction with many potential customers. The program places participants at the forefront of global research on issues of environmental and social importance. The program offers a wide range of opportunities and benefits, and we are calling on all interested parties to contact the ISERD director, who serves as a gateway to the program.”

Projects and research that received funding in 2018 include:

Israeli company Vectorious received funding via the European SME Instrument Phase II program in early 2018 to conduct clinical trials and continue developing its V-LAP product – a miniature wireless heart implant that monitors heart function, accurately measures left atrial pressure (LAP), and sends all data directly to the HMO or the hospital where the patient is receiving treatment. For the first time, physicians can make informed decisions and provide their patients with better treatment based on real-time clinical data.

Optima Design Automation from Nazareth was granted approximately 2.5 Million Euro to continue development and scale-up of its innovative product: a software platform for chip manufacturers designed to ensure functional safety of chips used in autonomous cars.

A joint project of the Agricultural Research Organization (ARO) – Volcani Center and the company Fluence for a decision support-based approach for sustainable water reuse applications in agricultural production (DSWAP) that aims to find holistic solutions for wastewater irrigation that ensures environmental safety and health with minimal energy investment. This project included research groups from Israel, Germany, Cyprus, Spain, France, Italy, and Portugal.

Triox Nano from Jerusalem won a 2 Million Euro grant to continue development of its new drug delivery platform SMARTIOX, which combines material and DNA techniques to provide breast cancer treatment for women by injecting the active ingredient used in chemotherapy directly into the tumor area alone. This platform could be applied to other disease treatments as well in the future.

The PlaMOS project, led by Mellanox and IBM’s Haifa Lab, is developing a powerful integrative platform that allows an eight-fold increase in the speed of optical transmitters and receivers used in datacenters. PlaMOS relies on small-scale wafer integration of novel ferroelectric-based plasmonic-photonic modulators, silicon germanium photodetectors, and BiCMOS electronics combined in a super-fast, micrometer-scale optical engine capable of transmitting and receiving data at the world’s fastest speed of 200 Gbit/s per optical channel.

The (hidden and obscene) costs of a general election in Israel

4 June 2019
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Categories: Afternoon Tea in Jerusalem, Blog, Business, Israel, Jerusalem

To cut a long story very short, Israel’s Prime Minister called for a general election in the winter of last year. It was held in April 2019, and his coalition partners won a majority. However, Mr Netanyahu has been unable to secure agreement amongst his buddies, and so is going back to the electorate…… on 17th September 2019.

As one person asked: If it takes the UK with tens of millions of voters and 650 constituencies only three weeks to prepare for an election, why on earth does it require the ‘start-up nation’ with four million voters five months? No answer. But just think how much extra money can be wasted in PR campaigns over that period, …..mostly funded by the taxpayer!

It is estimated that the direct cost of the election is around US$130 million. That makes for disappointing reading at a time when the country does not have a Minister of Finance and when the budget deficit has been lurching out of control for the past six months. The problem is that no real fix is in site before the winter, which means that the remedy will eventually be even more painful…..not that the present government will admit that to an electorate.

But there are other hidden costs.

After the elections in April, the 120 members of the Israeli Parliament, the Kenesset, were sworn in.

By the time the next election rolls around on September 17, Knesset Member Osnat Mark of the ruling Likud Party will have served in the Knesset for 10 months without performing any of the duties of a lawmaker. Nevertheless, she will receive a monthly salary of 43,000 shekels ($11,850), as well as a budget for aides and advisers.

Nice work if you can get it.

Moving on, let us recall why that first election was called earlier than required by law. The consensus in the press was that Mr. Netanyahu was seeking to delay the process of the four legal investigations against him. And by all accounts the main subject of discussions when trying to form a new government just now – a process which failed and resulted in those additional elections – was how to create a law that would weaken the prosecution’s cases against Netanyahu.

Add up the value of the charges against Netanyahu, and we are talking about billions of shekels.

Finally, let me turn my attention to the ultra-orthodox community, whose political parties see themselves as natural coalition partners of Netanyahu. They currently constitute about 16.5% of the populace, a figure expected to rise to 20% over the next decade.

However, 98% of 18 year olds from the community graduate without a proper education. Thus, when they do eventually enter the workforce, they are underqualified.

Actually, I should state “if” they work, because nearly 50% of ultra-religious men between the ages of 25 and 64 are estimated not to be a part of the working population. In order words, when Netanyahu agrees to the demands of his rabbinical partners, he is encouraging a form of enforced poverty.

Statistics indicate that 53% of the ultra orthodox live under the poverty line, as opposed to 9% for the rest of the population.

What the heck? Unemployment is at an all time low. The economy continues to grow in real terms. Loads of top musicians are turning up to play open air concerts this summer. So why should we care about a few squandered billions of dollars, if the Israeli government does not want us to think about them?

 

 

Who needs a business mentor?

30 May 2019
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Categories: Afternoon Tea in Jerusalem, Blog, Business, Israel

About 18 months ago, I gave a talk at a large conference near Tel Aviv of owners of SMEs. The subject was why they should consider hiring a business mentor.

For many of these people, they consider a mentor as just another expense. After all, how can an outsider known their business better than themselves?

I drew an analogy to the world of sport. In athletics, football, swimming  and the rest, there are many, many, many naturally talented human beings. Yet just about all of them have a coach.

Why? Because that extra voice and set of eyes have an experience that is able to bring the best out of others. Coaches and mentors have a special, somewhat undefined, skill that adds so much more to the achievements of the client.

It is the same in business. Sometimes, in order to get over that finishing line, you need an additional head and pair of hands, and there is nothing to be embarrassed about by admitting it.

To understand further what I mean – and to examine my table tennis skills – have a look at this video.

 

Customer service: Can it be taught or does human nature win over?

27 May 2019
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Categories: Afternoon Tea in Jerusalem, Blog, Business, Israel

The headline of the article says it all: “Tough Israeli airport security can be insulting”.

It is a fine balancing act. Israel has to be ultra vigilant when it comes to security. However, does it have to be so rude, when questioning suspicious types at its airports? Read the responses of those in charge. At least as reported, there is not a hint of empathy at the plight of those turned over, many unfairly. Take it or leave it!

The issue comes to mind following my visit to a distillery in Islay, off the west coast of Scotland. Yes, Bruichlladich is a long way from home. However, the tastings on offer were a major comfort.

The staff were friendly and welcoming. Their explanations were excellent. It was the end of an early summer’s day – well, summer for that part of the world – and if you pardon the pun, everyone was in fine spirits. I decided to purchase a bottle.

I was told that in order to receive a tax refund, I should take my receipt to the appropriate desk at the airport. They did not offer the service of the paperwork at the distillery itself, which I thought was unusual. Unfortunately, at Heathrow airport, I was told that I had been misinformed and that I was required to submit the papers I did not possess.

Annoyed, I wrote to Bruichlladich. They responded (twice) within 24 hours. The response was understanding. They informed me that there would be some staff retraining. I was told that I could expect to receive a small item in the post.

Bottom line. Full apology. It was not possible to wind the clock back, but the distillery had risen to the occasion. Let’s face it. Islay is an island of 3,500 very friendly people and a lot more sheep than that.

By way of contrast, yesterday, I phoned a hotel near Jerusalem. I am trying to arrange a group booking for a family event. I eventually tracked down the relevant person.

When she spoke to me, I was able to enjoy the subtle background noise of lorries hooting nearby. Without explaining what was included, she cut straight to the price, as if I was supposed to absorb all its meaning in a quick gulp of breath. And then, she could not get me off the phone quick enough.

And if you think she called me back to follow up, you are wasting your time.

I can only assume that in all three stories, people have received some form of training in customer service. Clearly, in two of the incidents, the matter is seen of lesser importance. So the questions remain:

Where do you think I would want to purchase (again) if I had the choice, and why? And why don’t those people, who need to learn that lesson, fail to learn that lesson?

What makes Jerusalem’s high-tech scene so vibrant?

23 May 2019
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Categories: Afternoon Tea in Jerusalem, Blog, Business, Israel, Jerusalem

Occasionally, I have mentioned the amazing buzz over the past few years created JLM BioCity. There is a wealth of ideas and innovation coming out of that team, yet in the relatively tiny city of Jerusalem, is world class. But what of the other sectors?

Earlier this week, I received a briefing of what else is happening around the city. I was stunned by the range of activity. What follows is a summary of that same bulletin published by the umbrella organisation, called JNext.

The weekly report starts off with a comment on the role of designers and ‘design mindset’ in general, became much more significant and crucial for tech companies to grow and succeed. They believe Jerusalem can and should become the place ‘Where Tech Meets Design’ and we are happy to invite you to the flagship conference of the ‘Tech Meets Design’ initiative as part of the annual Jerusalem Design Week.

A. THIS IS BIG. Jerusalem was ranked by Startup Genome as Israel’s leading life-science cluster in Israel and one of the top-10 life-science ecosystems worldwide. The city was also ranked as one of the top-20 global ecosystems for Artificial Intelligence companies. Check out the full report and the Jerusalem page on the Startup Genome website. 🏆

B. Ben Wiener of Jumpspeed Ventures, the fund the invests only in Jerusalem based or born startups, announces its new fund, injecting more capital into the capital city. Ben is awesome, everyone loves him, including us. 💸

C. Bitemojo, the most delicious startup in the world (and one of Ben’s portfolio companies), has won the Global Gastronomy Startup Competition of the World Tourism Organization out of 300 startups from across the globe. If you haven’t tried it yet, Bitemojo is a culinary experience of self-guided food tours with nothing but your smartphone. Check out recent interviews with their co-founder, Michael Weiss on the WTO website and on TheMarker. Yummy 😋

D. Genetika+ (another one of Ben’s portfolio companies..) was featured in JPost’s ‘Companies that Make the World a Better Place’ section. Genetika+ is developing a personalized medical testing tool to better treat depression by helping physicians find the best drug therapy for their patients.

E. The Hebrew University hosts a Canna-Tech conference to promote more collaborations between the academy and industry in one of the world’s hottest trends. The Hebrew University is one of the leading institutions globally with expertise in Cannabis-related research and patents. ☘️(**the closest to a cannabis emoji..)

F. From a heavy metal band to a gaming company. Capricia, a Jerusalem-based gaming studio is about to release its first game. Check out the interview with the creators on Geektime 🎸

G. Mellanox, one of Israel’s biggest success stories (recently acquired by Nvidia) are in the process of starting an R&D activity in Jerusalem. They are looking for an excellent SW Team Leader manager to join 5 Years experience in C and Linux and at least 2 years of experience in leading SW teams is a must.

H. Taboola, one of the world’s leading content discovery platforms are in the process of setting up an R&D site in Jerusalem. They are looking for Algorithms Engineering team leader and SW team leader (JAVA) to lead the site.

Jerusalem has around one million inhabitants. Over half is compiled of two large conservative sectors; the ultra-orthodox Jews and the Arabs. And despite that natural restriction, which can limit industrial growth, the city is as vibrant as ever in the high-tech world.

The hidden numbers of Israel’s high-tech success

22 May 2019
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Categories: Afternoon Tea in Jerusalem, Blog, Business, Israel, Jerusalem

A few years ago, I was acting as the business mentor for a biotech company that had entered the Mass Challenge incubator in Jerusalem. Alongside them were a couple of people developing an app for the culinary tourist market. And today?

The biotech entrepreneur is still pushing ahead. Bitemojo has just won an international gastronomy competition (UNWTO). Is this one tiny step to becoming another Israeli high-tech success?

Every now and again, there are journalistic gripes that Israel does not produce enough commercial Unicorns. Well, I was recently wading through the updated stats of Israel’s success as a start up nation. What is impressive how the numbers seem to keep growing, almost exponentially.

Just look at the base of Israel’s ecosystem. For example, Comverse, which hit troubles and was sold off in 2016, saw 299 of its employees set up 386 start ups. ICQ, the founder of ‘chat technology’ and sold for US$400 million to AQL had 42% of its staff create 66 enterprises. Anobit, Intel’s first Israeli purchase, fostered an additional 11 businesses.

Another aspect of the high-tech industry is its impact on the lesser developed elements of the working population. Roughly 160,000 people are employed in high-tech, and there are about another 10,000 unfilled positions. Back in 2010, maybe 3,500 came from the ultraorthodox sector. That number had close to trebled by the end of last year.

Not only does this ensure that two conflicting parts of society are able to meet each other in the workplace. Significantly, many of these observant workers are female. Their work hours are frequently adjusted to match their domestic demands, often allowing husbands to study all day in religious seminaries.

Overall, women compromise around a quarter of the Israeli high-tech sub economy. Since 1995, at least 24 ladies have led exits of US$ 30 million or more. At the top of the list is Dalia Prashkar, who sold to BMC for US$650.

The Non-Jewish population is also beginning to make its mark. 24% of the overall population, barely 8% work in high-tech. Intel, CISCO and others had taken major steps to change the balance. And there is now a government sponsored high-tech incubator in the Arab city of Nazareth.

What next? Fivver, Waze, Wix have all succeeded on the global stage. ReWalk is helping paraplegics move about. Mobileye, started out to prove to Toyota that a solitary camera could protect a car from accidents. The company was sold to Intel for US$15.3 billion last year. It has already seen a unicorn spun off from it.

So what will we be saying about Bitemojo in five years, or maybe  we will only have to wait twelve months?

The value of a picture

21 May 2019
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Categories: Afternoon Tea in Jerusalem, Blog, Business, Israel

If you had to choose one picture to sum up or to encapsulate how you feel about your work, your profession, your business, what would it be?

Now, I am a lousy photographer. The question came to me, as I was going through some snap shots of my recent holiday. I unexpectedly came across this item.

 

Loch Lomond (2)

This beauty spot was captured on the northern tip of Loch Lomond, near Glasgow, far away from my home in Israel. In better resolution, readers would be able to pick out the reflections in the water. And from here, I could go on to sing the joys of a recent wonderful holiday.

However, my point is different. I have had the pleasure of visiting the lake in the past. And on each occasion, it brings out a reality test in me. Strange, but the backdrop and tranquility allow me to reassess what is and is not important in my business.

In other words, the atmosphere helps me to focus and to appreciate what I want to be doing and how to achieve those goals. Yes, even experienced business mentors need a wake up call from time to time.

Too often, that reality check for many of us comes after having to cope with an unpleasant crisis in our lives. The truth is  very different. We have opportunities to ‘stand back and to think’ all the time. Yet we refuse to avail ourselves of those moments, usually because we are too afraid.

A picture – and yes, it can express 1,000 of your words in one breath – can help you to re-establish that focus. So I ask once again: What is that visual moment does it for you and are you prepared to use it more often?

 

What is the value of a delay in your business?

1 May 2019
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Categories: Afternoon Tea in Jerusalem, Blog, Business, Jerusalem

True story:

Yesterday, a guy turned up 44 minutes late for a one-off 60 minute business coaching session in Jerusalem. He had taken the wrong bus and was thus badly delayed.

He asked to reschedule. I took one look at him and made an immediate, potentially cruel, assessment. I denied his very legitimate request.

Over the next 3 minutes, I coached him into delivering short targeted elevator pitches that he was not used to uttering. he became empowered. I then asked him why he had requested a one-off session. Over the following 10 minutes, I shared with him a series of bespoke pieces of advice, all the time encouraging him to share more information about his commercial issues.

16 minutes later (and another three for good measure), he walked out of the room confused, shaken and delighted. My assessment had been correct. He had been too protected for too long. It was time for a shake up.

To be blunt: It was time to show him that he is allowed to announce what he is trying to achieve and how this will make his community a better place.

The nightmare of the wrong bus journey had been eradicated (almost) and replaced with hope. That delay had (bizarrely) given his 60 minute meeting an added dimension and purpose.

Jay Shetty’s latest video focuses on this very point. For most of us, a delay is a hardship or even a punishment. Actually, it is often an opportunity for us – to think deep, to appraise and to assess, and then to change.

I look forward to seeing my client in a couple of weeks to see what has happened. And yourself….?

 

What are you worth, at work?

24 April 2019
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Categories: Afternoon Tea in Jerusalem, Blog, Business

I was chatting with a relative yesterday. They were describing how their boss and company owner was so manic that they had installed secretly cameras in the office – checking up on what time staff came in, while they were thousands of miles away in a different time zone on holiday. We discussed how to react.

On reflection, a more important question surfaced. What is your self worth? After all, the boss is playing control freak par excellence. This power play can only be won by diluting the self respect of individual staff members.

A great podcast by Daniel Pink looked at the same subject from a different angle. How can we measure gratitude?

We are taught to count or add up our blessings. Pink argues that we should mentally remove what is important to us. can we do without them. That will reveal what is crucially important for us.

True, and definitely food for thought. However, it leaves you feeling a little hopeless. A somewhat painful exercise.

Thus, I argue that Pink misses the follow up to his observation. There are times when we hit a crisis point. And, although help may be on offer, it has to come from within ourselves. We have to dig deep.

Long distance or marathon runners call this hitting a wall. And I just came across this amazing poster, which sums up with supreme clarity what I am trying to explain. It offers a clear way forward.

MARATHON

I looked at the picture for several seconds, as I contemplated what it was saying to me. What I can reveal were all the thoughts were powerful and motivating. Yourself?

 

The economics of Jerusalem: 4 points for the summer

22 April 2019
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Categories: Afternoon Tea in Jerusalem, Blog, Business, Israel, Jerusalem

Easter, Passover, almost Ramadan….the main religions seem to be in shut down mode. And yet the economic meanderings of Jerusalem, Israel, suggest otherwise.

Netanyahu won the general election less than two weeks ago. How he builds his coalition will be interesting. It is clear that he wants to try to keep the Finance Portfolio in the hands of his own Likud party, but how that that will eventuate remains unclear.

What is a given is that despite the strength of the economy, there are many structural changes that remain firmly on the table and ignoring them is a regressive act. For example, it is now accepted that the value of real estate in Israel is on the rise, despite the previous government’s flagship programme on the issue. Much needs to be done, and soon.

Following up on that theme:

The high exposure to credit for construction and real estate, together with mortgages, constitutes almost half of the banking sector’s credit portfolio. It continues to be an important risk for the banking system. There is a risk in the event of a renewed upheaval in the housing market equilibrium…

The Bank of Israel has been warning about this for months, but the ruling politicians and their mandarins have preferred to ignore the warnings. In fact the Governor’s tenure was not renewed. Whoever inherits the Ministry of Finance will be required by the money markets to act, and do so in real time.

Looming in the background is President Trump’s deal of the century, which is slower being leaked. As one journalist observed:

If you break it down, the Trump plan amounts to calling on the Palestinians to accept quasi-economic autonomy, with a US administration giving them monetary support and raising money for them from countries in the region – the “Arab NATO”: Egypt, Saudi Arabia, Jordan, and the Arab Persian Gulf states.

And meanwhile, the Israeli Ministry of Foreign Affairs, still dominated by the PM himself, has found a clever way to encourage countries to move their embassies to Jerusalem. First step – open up a large bureau for joint financial cooperation.

For example, since the visit of the Brazilian President to Israel last month, there are discussions to open a trade mission in the capital. In a similar posture, Hungary and also Australia are looking to create diplomatic offices in Jerusalem, based initially around boosting trade with the Holy Land.

Despite it snowing on the Golan Heights this week, the commercial story around the city is heating up.  I hope that the Prime Minister’s personal issues do not effect his efforts to move forward on all fronts.

 

 

Jerusalem – a global high-tech influence

18 April 2019
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Categories: Afternoon Tea in Jerusalem, Blog, Business, Israel, Jerusalem

This week, I attended at networking meeting in Jerusalem. Leading local companies were asked to present to a packed forum what they contribute to the local and international economies. Nothing too original in that, but together they made a loud deafening noise.

(I took no formal notes. So my observations are drawn from memory).

Let’s start with Intel. Always known for being the first prime high-tech company to set up in the Holy Land. And Israel is known within Intel as its first overseas r&d center. Today, the company employs over 12,000 Israelis directly, impacts on about 46,000 other workers, and is one of the country’s leading exporters.

The big news. As in the past, the next generation of chips entering millions of computers globally is being developed in Jerusalem.

By the way, my office is  situated near the Intel facilities. Every day, you will see the company employing those from all walks of life, including all the religions.

Intel bought out Mobileye, which has partnerships with most leading car manufacturers. A spin off from Mobileye is OrCam, which is valued at over US$1 billion within a decade of being set up. OrCam helped blind people to vote in the recent general elections in Israel. It intends to help them to drive. And from there, it will help those with impaired and other disabilities.

The list goes on. Brix Software is powering Finntech services for CrossRiver Bank in New Jersey. Synamedia, which was spun out of Cisco, is providing the likes of SKY TV and many others encryption services. etc etc. It was a fascinating list of stories from the many speakers. All are desperately trying to recruit software engineers.

What does this all add up to?

Jerusalem has around one million citizens. As seemingly throughout its history, it is a hotbed of religious and diplomatic discourse. And yet, the city and its residents are making an exciting and positive impact on the lives of billions around the globe.

That is a story worth investing in. That is a story that the world can look to as an achievement. despite the odds.

 

My business mentor wants to motivate me through exercise! What for?

15 April 2019
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Categories: Afternoon Tea in Jerusalem, Blog, Business, Jerusalem

It was a great few hours last Sunday evening. A packed Jerusalem coffee house listened to two lecturers, explaining the connection between working out and improving your work environment.

(Side bar: To cut the technical jargon, there are four chemicals in the brain that do good things for us, when we activate them through exercise).

A business coach and mentor myself, I have spent much time over the past 15 years ensuring that I have to buy new running shoes every six months. It was only once I had started to train regularly that I realised how badly I missed it, when pesky things like holidays with the family began to get in the way.

And I will never forget the morning after my first full session at the gym. The body tingled for a whole day, and I am not the only one to remark like this. A very special feeling.

Daniel H. Pink is well known on the motivating circuit, A recent video of his asks how we can motivate ourselves to go out and to exercise regularly.

Basing his observations on the work of others, he argues that the ability to run (or swim or cycle or whatever) can be seen as a “gift”. It is not something we have to do, but we can choose to accept the option, or not.

For Pink, the question of whether to exercise or not can become an autonomous decision. We can control what we do. This approach helps to shake off the pressure of not being bothered with going out in the rain.

As if to prove the point, yesterday’s 9.30am client turned up straight from the gym. Shortly after our previous session, when they had very cautiously listened to me preaching about the virtues of getting off their backside, they had met a friend. That person was looking for a gym partner. To their surprise, my client immediately took up the suggestion and started to go.

My client now trains five times a week and he said:

Working out has added two hours of thinking time to my day.

But what for? I am often asked this by people. What is the benefit from all that extra effort?

Last week, I was part of a very interesting chat with friends. Each had learnt to run and each had completed a personal milestone. And we all agreed. Once you cross that finishing line, you almost automatically think to yourself: “What next?”.

And then you understand: You are not just looking for the next physical challenge. You wonder what else you can achieve at home and in the work environment.

The economics of Israel’s general election

7 April 2019
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Categories: Afternoon Tea in Jerusalem, Blog, Business, Israel

It is an accepted fact that Israeli general elections are determined by who is seen as the best person to lead the country safely and courageously through a war, if so needed.

You can talk about the corruption charges launched at Prime Minister Netanyahu. You can argue that his main rival and former Chief of Staff, Benny Gantz, is a political novice. etc etc. These factors pale into insignificance. What counts – what matters – is the perception of future physical safety andwho can be seen to deliver on that.

The lead economics’ editor in the Ha’aretz newspaper – a journal that despises Netanyahu – believes that the man should be thrown out by the nation. He is corrupt, and that corruption is ruining the country, financially and socially and morally.

I was more interested in the economic presentation by Sever Plocker in the Yediot Ahronot paper. As he surmised, for much of the past two decades, when Netanyahu has been Finance Minister or Prime Minister for most of the period, the economy has soared along at around 3.5% annually, barring 2009 and a small matter of a global credit meltdown.

But…..

In her 2017, Dr Karnit Flug, then Governor of the Bank of Israel, observed in her annual report that there was too much reliance of revenue flows that may not come through, especially at a time when expenditure was set to rise. By November 2018, the lady was out of a job.

Was the warning warranted? As Plocker points out, the budget gap of 2018 is 3.8%, double that of 2016. It is one of the highest in the OECD. And 2019 is likely to see the difference widen.

In other words, whilst the economy may seem to be in good hands and unemployment is set at 4%, the grey clouds are building up. After the elections, “the government will have to trim the rise in spending and raise tax revenue”. Plocker wonders why Dr. Flug will not be offered an apology.

Plocker continues by pointing out that not only have housing prices not really fallen. It seems that they will rise again as the impact is felt of the lack of little new housing being built. Ouch again, and so on.

What has the economy of 2019 and 2020 got to offer Israelis, on the back of a decade of Netanyahu in government? As the Netanyahu approved new Governor assesses:

In order to maintain the economy’s robustness, the government will have to make fiscal adjustments, a mix of greater efficiency, trimming the rise in spending, and a rise in revenues from taxes.

That does not sound very nice, thank you very much! That can only be the fault of the present government.

The Globes financial newspaper surmised:

The challenges facing the next government are greater integration of Arab women and haredi men into the workforce…. Another challenge is the low efficiency of Israeli bureaucracy. The Bank of Israel recommends that the government should set qualitative and quantitative goals for government workers in the framework of new labor agreements.

Netanyahu has made arguably racist comments about Arabs. He is so tied to the haredi parties that he will help them keep their constituency off the streets. And his claims about reducing bureaucracy – a pet theme of his – remains just a pet theme.

So who to vote for, if it is the economic issues that determine how people will decide? Well, we now have a better understanding as to who not to back.

Israel’s economy – pre 2019 General Election

29 March 2019
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Categories: Afternoon Tea in Jerusalem, Blog, Business, Israel, Jerusalem

Last week, I questioned if the Israeli economy truly needed another four years of a Netanyahu-style government. This comes on top of a warning from the Bank of Israel that growth is beginning to show signs of slowing down.

But not all is gloom and doom. Yesterday, I spent an exhilarating morning moderating  a networking session between the Jerusalem Business Networking Forum and a delegation from Global New York. We were hosted by Biohouse, a brand new state-of-the-art hub for bio start ups in Jerusalem. The concept is so good that it is to be exported, first to Tel Aviv and shortly to New York.

This impressive centre is not all that is new in Jerusalem. For example, HIL Applied Medical Ltd. has signed an agreement to lease a 700 square-meter space from The Hebrew University of Jerusalem to set up a manufacturing centre. The total cost of the project will amount to approximately $5 million. And this is potentially dwarfed by the plans of Mapi Pharma, which intends to set up a facility to manufacture a drug to combat MS.

Elsewhere in Israel, the big chiefs of Citibank and Walmart have been visiting, and not just to look at the late winter storms. Skoda, owned by Volkswagen, is expanding its operations in the Holy Land. The Radicle Challenge is seeking to promote Israel’s resurgent agritech sector.

The thirst of American and European fund mangers to be a part of the start up nation does not seem to be ending anytime soon. The financial numbers are staggering.

I just these stunning macro figures would convert out more into the pockets of those millions not involved in the world of high-tech and innovation.

 

The admiral, a clay pot and your abilities

25 March 2019
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Categories: Afternoon Tea in Jerusalem, Blog, Business, Jerusalem

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The 2014 speech by Admiral William H. McRaven went viral and is still going round Facebook. The core line is that marines are commanded to make their bed every day so that they start the morning with an achievement. Book that one small issue and then you will have the confidence to nail down more demanding tasks.

I was reminded about the video as I stared at a small glazed pot, roughly the size of the palm of my hand. That dark green, near useless item, has travelled with me for decades, gathering dust in various different homes. And last week, I found it a new shelf, as we were unpacking yet another box.

I reflected how I had made the pot when I was about nine years old. Compared to others in my class, it was nothing special. After all, I was no good at art. Even today, I draw the most primitive of pictures.

And yet, I began to recall how quietly ecstatic I was when the item had come out of the kiln. It had survived. I had created something.

I do not recall sharing my delight with too many people. I do not recall my teacher sharing with me any words of encouragement. I guess that the momentum was lost in the history of mankind. I was soon to drop pottery.

Also last week, I was discussing the next steps to be taken by the owner of a small Jerusalem-based business. Providing a unique service, she was beginning to think very ambitiously. As her business coach and mentor, my job was to help her to channel her motivation in order to compensate for a lack of certain skills.

Suddenly, it was clear from her face that she was getting cold feet. I assured her that her vision was fine. Now, instead of concentrating on the final stage – which is a long way off – that she should just ensure that she completes the first few tasks, and do so as best she can. With perspective restored, she walked tall out of the room, and I am looking forward to our next meeting in a couple of weeks.

For the record, I recently read that my school has introduced a series of art, needlework and creative classes for boys aged around 13-14. You wonder why?

As for the pot, I think that it is time to fill it with something more valuable than paperclips or similar.

 

 

 

Keeping Israel’s election economy together

19 March 2019
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Categories: Afternoon Tea in Jerusalem, Blog, Business, Israel

April 9th 2019. Election day in Israel. It is not so much of who will be the biggest party, but which block on the political map will win. For now, Netanyahu’s right wing grouping has a slender lead, just.

For most of Israel’s 71 years and in direct contrast to most democracies, the issues of defense and foreign policy are seen as more important than the economy and social affairs. That is probably still true today, but how people feel about the shekel in their pocket is obviously a pertinent factor in how they will cast their vote at the polling station.

Let me be clear. Israel’s economy has been one way track upwards since the beginning of the century, barely effected by the 2008 global crisis. And Netanyahu, as Prime Minister or in other positions, has played a key role in that success. Just over 8% of the working population is involved in high-tech and they are generally doing very well.

Yet there is a feeling that the clouds are gathering. And even if they are, can Netanyahu keep the picture bright enough to control his support for another three weeks?

There has been a worrying trickle of less positive economic information over the past month:

And so the list goes on. Crisis time it is not, but something is not right.

The most indicative sign of this is the price of fruit and vegetables. Now Israel was set up as an agricultural economy. There are hundreds of farms – private, kibbutzim and so on.

The previous government promised that the cost of living would be a key part of their next programme. Would this mean a freer approach and the reduction of duties on the import of fresh produce? Prices stabilizing?

You must be joking! Over the same period since the early 2000s, prices have nearly doubled. Out of season fruit are just not available. The local farmers are still protected, even though they will argue that they are given a raw deal by the big chains of supermarkets. Competition is stifled. So much for the free economics, preached by Netanyahu.

Last weekend, I read the most bizarre analysis. In order to override the power of the chains, more and more farmers are setting up their own local shops. Great. However, the newspaper “The Marker” compared 14 types of products, sold in three private shops and also in four chains.

You would have expected that the farmers could offer the best deals as they do not have to bare the cost of middle men. Again, you must be joking! Of the nearly 100 prices in the table, almost without exception, the farmers were the most expensive.

And this is the economy that Netanyahu is trying to sell to the electorate as a picture of achievement.

 

 

 

 

 

 

Palestinian economy – Israeli economy

15 March 2019
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Categories: Afternoon Tea in Jerusalem, Blog, Business, Israel, Palestinian Society, Palestinians

Israel is where Western countries send delegations to learn how to copy the success of the start up nation. Just this week, it was announced that Mellanox exited for a mere US$6.9 billion. Who’s next?

And yet there are those who are questioning if the proverbial bubble has burst for the Israeli economy. The fiscal deficit is climbing. The general election on April 9th and is likely to result in further political instability. Can the economic triumphs of the past decade be repeated?

Palestinians benefit from a resilient Israeli economy. Legally or otherwise, over 100,000 labourers find employment daily via their neighbours. If they gainfully registered they receive full social benefits, which barely exist in the territories. That said, since the Oslo Accords, both in the West Bank and particularly in Gaza, the Palestinian economy has shrunk.

Yes, there was a positive blip at the end of the 1990s – 15% improvement for two consecutive years. However, Chairman Arafat’s decision to launch the Intifada killed that off, as well as others.

The West Bank has historically been the stronger of the two districts. According to an analysis by Doron Peskin, unemployment has risen slightly over the past two years to almost 18%. Arguably of more concern is that economic growth has shrunk by almost 50% to about 2.7% annually. The data for Gaza is far more depressing.

What is important to note about these numbers is that natural population growth is higher than 3%. President Abbas is ill and is seen increasingly as less able to command respect. And we have observed that the Israeli economy may be weakening, and thus less able to take up some of the slack.

Next stop? I am not sure. However, just before Hamas launched two rockets at Tel Aviv last night, there had been a massive demonstration in Gaza. The populace were revolting at the high cost of living. At the same time, the shops in the better off suburbs still appear to be remarkably busy.

I suggest that there is a lesson here. The Palestinian leadership should learn from their Western colleagues, listening to Israelis about how create wealth rather than seeking to destroy hope.

The ABC of selling; unexpected punchline

11 March 2019
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Categories: Afternoon Tea in Jerusalem, Blog, Business, Jerusalem

Here’s a big sales tip: Never miss one of Bernadette McClelland’s short mentoring videos, always so insightful.

Bernadette’s latest two minute clip refers to the ABC of selling, and I quote:

ABC – Always be Closing – Meh!
ABC – Always be Connecting – Mmm!!
ABC – Always be Contributing – Magic!!!

However, she goes on to add a sting in the story. Some people sell so hard that they end up missing the point. In other words, minimal profit. Ouch!

I have recently faced two examples of this attitude with mentoring clients from the Jerusalem area.

In the first case, the seller was so determined to win the contract that he has climbed down to a point were he is working for a very low hourly rate. It can be argued that this deal will help him secure success with other clients. Maybe, but at what cost? And will he now be at ‘the mercy’ of the first customer?

In a second incident, my client nailed down a fantastic sell. The goods went out at a very lucrative price. However, because he is a nice guy and gets a buzz out of helping people, he threw in so many extras – at a cost of an enormous amount of time – that the profit level has been diminishing by the second.

Call it ABC – or even aleph, bet, gimel to give it a local connotation – your selling should not obligate you to give or to contribute so that it hurts. Why? Because that will stop you helping others downstream.

 

 

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