For the past two decades, the Israeli economy has created an excellent reputation, basing its rapid growth around high tech – the start up nation of the Middle East. Assaf Kassel, 35 years old and father of two young kids, typifies this trend.

And like many of his generation, Assaf allowed his surroundings to teach him to seek beyond what he was trained to do. He left the world of computer terminals and set up………..

………well, let me digress here. You see Assaf has just won a prize for one of the best small companies in Israel, proving that the economy of the Holy Land is not just about the challenging the boundaries of science. And I was stunned by what he has achieved.

First, contrary to the advice of his colleagues, he established a business based on a gut reaction.

And what is that business? Arab Instruments is all about purchasing quality musical instruments from around the Middle East, and then reselling them to clients overseas. The company has based its success around a large range of online video clips, showing off the prowess of its products.

Second, embracing the culture of others, Assaf has found a brilliant antidote to the language of violence that haunts the whole region. While there are those that advocate boycotting Israel, a sinister flashback to Nazi Germany, Assaf is communicating via music and trade with those who would not normally be in touch with Israel.

For the record, Assaf was not the only winner which crossed assumed ethnic lines. Juha Guesthouse was jointly established by a Jewess and her Arab friend. Situated in the Mulim town of Zarka, near the old Roman port of Ceasarea, they too have shown how people can come together. The clientele is as mixed as the commercial partnership.

And what do these anecdotes say about Israel’s economy? It is big enough for everyone, whatever your religion or political views.

It has become comfortable professional practice amongst international journalists to blame Israel for all the economic woes of the Palestinians. Even during International Holocaust Day, respected Sky News anchorman, Adam Boulton sought to compare the systematic slaughter of 6 million Jews to the current hardships of those in Gaza and the West Bank.

In terms of sound bites, one has to wonder why such communicators did not mention how over 2,400 Palestinians have been killed or disappeared amidst the violence in Syria. Similarly, there is silence re the dozens executed by Fatah and Hamas regimes. Surely, this environment of violence and hatred must act as a bigger downer on the Palestinian economy than Israel’s actions.

As for the facts on the ground, we known that the Palestinian economy is dependent on donations. One of the largest component of this is UNRWA, the United Nations Relief and Works Agency. Its current annual budget, ignoring special projects, runs to over a billion dollars, putting it as one of the largest international charity in the world. Major donors include Britain and the European Union. UNRWA runs a dedicated assistance programme to help Palestinians rebuild homes. Of the US$ US$585 million dollars promised, barely 25% has been handed over.

Interestingly, despite the name and its initial history, UNRWA is not controlled by the UN. It has no external accountable nor transparent reporting procedures. Thus distributions disappear. When you consider that its educational facilities became army camps for Hamas operatives during last year’s war with Israel, you have to wonder who truly benefits from the hundreds of millions of UK, European and American taxes.

The weak tax base of Palestinians has long been a cause of concern for the IMF and the World Bank. Poor government practices do not enhance the collection process. In parallel, Palestinians are understandably angry at Israel’s decision to withhold excise collected on behalf of the Ramallah Finance Ministry. This is worth over US$100 million a month.

Whatever Israel’s reasoning, Palestinian civil servants, the largest group of wage earners in the economy, are yet again not receiving full salaries. On the other hand, the Saudis have just delivered US$60 million. Similarly, Iraq and Qatar have promised a further US$50 million together. Why does the man in the street not feel these contributions?

And how are Hamas and others able to fund the rebuilding of their military prowess?

The average Palestinian deserves better from his and her leaders. There may not be a lot of joy around, but money is out there, as videos of shops for the elite prove time after time. Palestinians are being deprived of the basic right to receive their fair share of public monies, yet Israel takes the rap.

If you are looking for a suggestion: I note that Iran does not help out with the UNRWA budget. And yet according to an article in the Hebrew newspaper “Calcalist” (Economist), for all the sanctions imposed on Tehran, the Ayatollahs make sure that Hizbollah receives a cool US$100 million annually. Now if those weapons were converted into ploughshares…..but that would require a desire to seek peace.

I am often asked the question by potential clients: Should they seek help from a business coach or a psychologist?

Well, as a business mentor and consultant, operating in Jerusalem and Tel Aviv, I guess that most of my responses reveal a natural bias. However, the issue came up again last week from a very different angle. I realised that three of my current clients are psychologists by training. Now that struck me as unusual.

One is very much still practicising their skills. A second has moved to a related field. The third has long abandoned the profession. Each is trying to set up or expand their business. Each one is trying to grapple with challenging commercial approaches. And, each one is held back by ‘self issues’.

Interestingly, many of their problems can be found amongst those people who might have approached them for help: procrastination, self doubting, complicating simple problems and much more.

So does that mean, if you have a business problem, you must turn to an experienced business coach?

David Clutterback in his book “Everyone Needs A Mentor” cites an illuminating case study. Tennis players were briefly coached by specialists from another sport. The result was that the players discovered new skills and strengths.

Similarly, I recently spoke to a senior jet-setting executive. They view their therapist as ignorant on business matters. However, the exec readily admits that the same therapist has a reamrkable ability to put their finger on key financial weaknesses.

Bottom line? There is no all-encompassing answer. A good psychologist should appreciate the complexities of other professions. And a true business coaches will accept that few decisions are made rationally. You have to feel comfortable with the person who is going to help you, understanding that this may become a relationship that could last months or longer.

The start of 2015 has seen Israel’s economy face a string of fiscal and monetary challenges. This uncertainty is fuelled by political uncertainties of an unexpected general election campaign, which will peak on March 17th.

Yet despite these distractions and the war last summer with Hamas, “Israeli high-tech-company exits reached a record of close to $15b last year, double 2013’s $7.6 billion.” And 2015 looks to have commenced in similar fashion. Within the space of 48 hours, “two Israeli startup companies have been bought for a combined $570 million”.

What is impressive this time are the names of those people backing Israeli tech and its future. For example: –

1) Amazon.com has finally taken its first step in the Holy Land. The company has purchased Annapurna Labs, which is involved in the semiconductor space. Significantly, it is expected that the US$ 350m deal will launch an r&d base in the region for the conglomerate.

2) Dropbox is another first-timer in Israel. It now controls CloudOn, a developer of mobile productivity tools with an engineering hub in Herzliya. The deal is valued at around US$100m.

3) Alibaba, the on-line retail giant, conducted a high-level visit to Israel just recently. The first result is the acquisition of Visualead from Tel Aviv. For US$6m, the Chinese company will grab hold of a new set of codes that can be scanned by smartphones.

4) Harman Industries Inc. makes vehicle entertainment and information systems. It has taken over Red Band Software for US$200m. The company “provides software for remote management of mobile devices, including tablets and smartphones. The company says that its product is currently installed in more than two billion cellular devices.”

Many other names could be added to this list, such as MasterCard, Samsung and Verizon. What is encouraging at a time of yet more stress in the Middle East is that many of the world’s commercial giants are upping their faith in Israel.

It is the question that every business faces: How can I ensure that my customers will choose my product or service?

Do I cut prices, advertise, offer a coupon, launch a 2 for 1 deal,………? Somehow, the gimmicks seem to repeat themselves the world over.

So how is this for a case study? Nati Bar is a 33 year-old CEO of Roladin, an upmarket chain of patisseries-come-restaurants in Israel. She overseas around 50 branches, with a further 10 opening every year. Nati observed in a newspaper interview that during the Jewish festival of Chanukah last month, when according to custom people go out and buy doughnuts, Roladin sold 4 million of these sticky, sugar-loaded cakes.

And here is the catch: For years, Israelis have benefited as shops come up with ever more fancy recipes, usually with each one filled with more calories than the previous attempt. What Nati’s team noticed is that people “choose their doughnut according to what their eyes see“. Apparently, it has very little to do with price, dietary considerations, the filling or otherwise. And as such, Nati had sent her team to Paris earlier in the year to learn some tricks of the trade.

Actually, what Nati is saying is something very simple and practical. For all the modern techniques of social media and population segmentation, what it comes down to is identifying your customer and listening to what your custome wants. Then you can go out and validate your solution, before you launch a full sales campaign.

Note that I said that Roladin has placed itself a slightly above its competitors. That said, in a market of 8 million people, it is surrounded by rivals, several of whom are more outlets. However, Roladin never openly competes on price.

One of the most common challenges I face as a business coach is how to show my clients that they can reach out to markets, especially when they start to think away from the standard solutions. The Roladin concept in Israel proves how to attract new clientele to your products.

It is the time of year, when you read summaries about great new Israeli technologies of 2014 that flowed out of the  land of milk and honey, the country of the start up nation.

Less than two weeks into 2015, and we are already witnessing a new list of disruptive Israeli technologies that should hit the high-tech chat lines. As if to prove the point, Vertex, Fortissimo and others have all launched new investment funds just recently. And two days ago, yet another anti-fraud software house, Intellinx, was snapped up by an American giant.

For all the hype, there are plenty of companies that remain under the radar of most potential investors. I would like to highlight five such start ups, which when proved successful, hopefully, each will a significant change for the better in lives of many around the world.

(Disclosure: I have an interest in three of the subjects listed below).

NDT Ultrasonics has perfected a capability to detect multiple impurities in fluids and then break them down. The results are available in real time and the solution can be provided immediately. Significantly, the potential fields of application are numerous; health, food, water supplies and more.

NDT’s first project is likely to be in India, where trials are about to commence testing milk of local farmers. The suggested product is extremely price competitive for such markets.

Marx Biotechnology Ltd offers exciting hope to all those about to undergo bone marrow transplant. Today, the instances of where the transplant rejects its new host – Graft Versus Host Disease – are still far too high. The result is usually tragic. Marx Bio has patented is its knowledge about a specific molecule, whose change causes such rejection.

The company has just launched its first trials in humans. In the long term, Marx Bio is looking to save the lives of tens of thousands around the globe. And its actual product? Simple to manufacture, requires little additional training for doctors, and will save millions in health costs.

SCiO is a hand-held sensor that has already raised US$2 million through a crowd funding campaign. It does not get much more practical than this; direct the instrument at an item of food and you will find out instantly the chemical content of what you are considering to devour.

The Tel Aviv-based outfit has just won the ‘Last Gadget 2015” prize. Is this the end of false advertising in the food industry?

H2Energy Now is located in Beersheba, the geographical centre of Israel. This company has been bootstrapped from the go. Against the odds, the owner has not just created a working prototype that converts energy from water. The key is that the new energy – for the home or corporate environment – is stored in a highly efficient and unique manner.

What makes this product stand out in the alternative energy market is the fact is that it can operate 24/7, regardless of the seasons. The company was recently accepted to a hightech incubator and is currently seeking a partner for a pilot study.

Somewhat cheekily, my final choice is not something normally associated with Israel. The Milk and Honey Distillery is a partnership that has created the country’s first commercial whiskey. From the outset, the team recruited the talents of got Dr. James Swan, one of the world’s finest master distillers. And first official tastings should be available during 2017. And if you do not believe that whiskey can emerge form warmer climates, just look at the successes of the Indiana and Japanese industries.

Thousands of years later, beautiful miracles continue to emerge from the land of Israel.

Lack of confidence is one of those things that many of us suffer from. There are prople who sneak off to the back. There are others who shout to cover up insecurities. And some…well, they prefer not even to turn up.

Confidence building is a subject, which attracts bloggers. It is like procrastination, which I wrote about yesterday. So many people bark what you have to do, without every having been there. Consequentially, at the end of the day, the advice misses the mark.

For example, I refer you to a new article: “Learn the 7 secrets for building unstoppable confidence”. Yes, there are many good points here – not copying others, being focused, etc. But something is missing. Having been there – done that, it was obvious to me at once what the author should have added.

With hindsight, I was shy. I was also taught not to be pushy. So the two inertia merged handsomely. Worse followed as I began working in Israel, a very dynamic environment, where many push themselves forward. So I dropped back even further.

However, something changed. Actually, for me, there were two incidents, both with a similar ‘eureka moment’ attached to them.

First, I attended a seminar, addressed my boss at the time, who spoke badly on a subject, which I knew well, but everyone accepted his judgment. I said to myself: “I know better than this. If only I could find a way how.”

A few years later, I found myself listening to colleagues, who were trying to destroy a classic business model for coaches and mentors. I was convinced they were wrong, and immediately realised two things. I did not need to waste my time arguing with them. If I was able to do it by myself, I could just go right ahead without asking for anybody’s permission. that is what happened. What followed is a very happy new career.

I believe that professional psychologists call this ‘resilience’. Somehow, I found the confidence to become self-motivated.

Today, as a business mentor, I am thrilled how I am able to impart my own very practical approach to my clients. By merely asking the question about what skills a person possesses can sometimes lead to a positive change in itself.

This background may sound a bit showy. The anecdotes are designed to illustrate how people can progress at work by latching on to the very innate talents that they already possess. To achieve this make take time, but it is usually very doable.

 

After barely two years, Israelis will be going back to the polling booths on March 17th. Historically, general elections in the Holy Land are determined by which party is perceived as the most capable in defense and foreign affairs.

On this level, incumbent Prime Minister, Bibi Netanyahu, has consistently performed well in the polls over the years. Certainly, there is a feeling that last summer’s military operation against Hamas in Gaza was planned and executed with competence.

However, if you listen to the chatter of the candidates, government and opposition, it is all about the economy; what is and what is not in people’s pockets. It is a matter of ‘perception and feeling about spending power’. However, Bibi looks to be playing on a very sticky wicket.

Economic Growth: While the Israeli economy may be set for a reasonable 2015 and yes “2014 was an excellent year for Israeli high tech“, the spark seems to have disappeared. For the first time since Israel joined the OECD in 2007, growth per person (0.7%) was lower than the whole OCED average (1.3%).

It is interesting that this week also saw the release of stats that show how for the first time in a decade, people are buying less food. The 1.63% drop was specifically felt amongst the large supermarket chains.

Price Rises:  January 1st has revealed significant price reductions in the cost of petrol and in the water rates. Great. However, as the government has no ability to tackle the electricity monopoly, the prices here just do not budge. Further, it is accepted that municipal taxes are set to be hiked after the election,a nd who knows what else is in the pipeline. While most workers in the public sector will enjoy a 1% pay increase this month, the top boys will receive 2.5%. Fair?

New Economic Wealth Belongs To…?  There is a hidden rule of thumb that those people who ‘make it’ in high-tech deserve to keep their riches. Their talent and chutzpah got them there. Somehow, when it comes to the offshore gas rigs, the public thinks otherwise. It is true that the government coffers will benefit from this new wealth, but has the Treasury, under Bibi’s directives, surrendered too much tax money to the private sector?

What is worse, now that a public debate has erupted on the matter, Bibi has demanded a rethink. OK, but this has landed him trouble with powerful American investors. They have called in their friends in Washington, who wrapped Israel over the knuckles. What a mess!

Social Issues: As things stand at the moment, Bibi’s Likud party will field only two women on its election list in realistic positions. This has caused a rumpus in the press and amongst pressure groups. As if that is not bad enough, a leading social commentator, Tami Arad, has posted a strong article condemning the government’s position towards pensioners.

Housing: There has been talk for years on how to prevent the perennial surge in the price of housing. Those who are specifically feeling the heat of the bubble market are young couples, call them first-time buyers if you wish. Despite expectations and hopes, the outgoing government has yet to deliver a solution.

Netanyahu’s explanation for the woes are simple and precise. In a special television interview last night, he handed out his blame list for the ills. Although he has been in power for much of the past decade, he included several opponents, but not himself.

We also saw on the news how the Israeli Prime Minister delivered a speech to the party faithful. When he mentioned defense and geopolitical issues, his comments drew strong applause and cheers. When he touched on the economy, the activists in the hall were ominously and erringly quiet. What kind of dawn will the 18th March bring to Israel?

You hear of great business leaders or organisers of investment events espousing the virtues of ‘having a vision’. Have you ever considered what that really meant? And just why is this virtual concept so important for all of us, even for those just starting off on the road towards commercial glory?

Step back a moment. The idea of ‘vision’ has been around since day one. Look at Joseph in the Bible. For him, it was not about older siblings or fellow cellmates, but where these events would lead him to and why. Similarly, Moses – however great the story of the Exodus, that in itself was not the end game.

The importance of a solid vision is it lands you with concrete focus point to aim at. Thus, you know which resources to gather that will help you to succeed. Let me explain.

As a business coach, I ask people what is their vision. The frequent reply is: ‘we want to make money, and lots of it’. I say fine and suggest that they buy a lottery ticket rather than sit down with me. ‘Oh, that is not what we meant.’ … And at that point, they have little further to offer. A road to nowhere.

Yes, a vision actually has to be something specific.  What I look to create is a sentence like: “In five years time, I want to have created a business that will be selling X to Y, securing a place in the local community and driving a salary for my family in the region of a million bucks a year.”

The fact of the matter is that so many businesses drift. As they do not have to invest resources into moving towards precise goals, they become tied down with putting out fires. To give you some examples of what I have seen in the past year:

  • A retail operation so concerned about petty staff politics that its sales suffered. That has had a knock-on effect re stock management and other issues.
  • Several high-techies have emphasized their innovative technologies to the point of ignoring what they are trying to establish – a business. Thus, the investors have been turned off.
  • Service providers insistent on telling off potential customers why they have made mistakes by not coming to them in the first place. The customers just move on again.

Small business owner or CEO of a large company; Just starting out or been in commerce for years; Whoever you are, just take a few moments to ask yourself what you are truly trying to achieve. A concise answer should throw you in some  very helpful and new directions.

Israel struggles to be reported in a positive mode in the global media. Yet her economy continues to move forward. Despite all the geopolitical concerns, as we enter 2015, there is much for the world to share in Israel’s continuing financial success.

First, as I discussed yesterday, the growth figures for 2015 are being revised upwards. If 2014 will see figures of around 2.5%, barely matching changes in population, 2015 will see a spurt of about 3.2%. Much of the improvement is due to the export performance.

Second, Israel’s high-tech sector continues to please overseas investors. “Exits doubled to a record $15 billion in 2014. This has been by far the best-ever year for the country’s high-tech and biomed sector in terms of exits.” That is around double last year’s total. In a year, when much of Europe’s economy continues to reflect retraction, these numbers reflect a major achievement.

As if to prove the point, just consider the app “Music Messenger“, a very simple way to send music from one mobile device to another. Based on a small kibbutz,  “the Series A investment round reached $5 million from top artists in the electronic dance music (EDM) and urban communities, as well as managers and executives including: David Guetta, Tiesto, Avicii, Nicki Minaj, Sebastian Ingrosso, Dave Holmes (manager of Coldplay), etc“. Next June, it intends to launch in China with a large concert.

Third, for all the political uncertainties and despite Gaza’s war with Israel, Israel gas production is coming on line and beginning to generate extra revenues for to pay for public services. Unemployment has fallen to 5.6%. Tourism held up in 2014, maintaining the strong numbers of 2013.  And the Tel Aviv Stock Exchange progressed by about 11%, a reasonable performance given the surrounding instabilities.

Wishing all of us have a prosperous, happy and healthy 2015.

At a time when Israeli politicians have launched themselves into an unwanted general election, the local economy is showing signs of great resilience. And that is the reason that yesterday the Bank of Israel left its rate of interest unchanged at 0.25%.

What are the telltale signs?

The shekel has weakened 13 percent against the dollar since the summer rate cuts, helping exports that drive economic expansion. The improved climate has coincided with a decline in unemployment to 5.6 percent, its lowest level since at least 2012………….(And) growth will accelerate to 3.2 percent in 2015 before slowing to 3 percent in 2016…….

I can add to that three other indicators

First, the economy is gradually overcoming the setback of the summer, when the unexpected war with Gaza thumped large sectors of society. For example, it is estimated that the economy in the south of the country, highly dependent of the tourist season, took at 35% hit.

Now, there is some form of rebound in play. By way of anecdotal evidence, I know that many of my clients are engaged in heavy advertising, which is very unusual considering that we are entering the ‘low sales months of winter’. They are seeing an unseasonal spike in sales.

Second, Israel’s idiosyncratic election campaign could actually be helping the economy. It is not just that many of the parties have identified social issues as the Achilles heel of the outgoing government. As I have mentioned previously, new public expenditure policies are frozen until the next government is installed, probably not until may 2015. The attorney-general has been very clear that he will clamp down on ‘election-economics’. Thus, there is little scope for overspending. Overseas investors will be pleased.

Third, and many most important, the Israeli public is far more sophisticated in the past two decades. It now longer waits for politicians to make decisions. A recent blog considered “five reasons why Israeli start ups are so successful“.  To sum up: It is all about the old Ben Gurion addage, the country’s first Prime Minister. Everything is impossible until you have tried to change the situation.

Israelis do not wait around for things to happen, but try to initiate new things. It is in that sort of environment when economies and societies are likely to move ahead, and beyond the expected norm.

If you are 20 something years old, you are already Facebook-Twitter-smartphone-Tumbler etc savvy, and probably playing on all of these as you read this.

However, vast numbers of people are aware of all of these “aids” but do not know how to use them, let alone why they are useful. And I am referring specifically to those in business, whether managers in companies or self-employed. These are skilled and intelligent people, who if they were forced to answer honestly, would admit that they are barely familiar with the basic functions of word and excel. So, when it comes to social media, forget it!

I am a business mentor. And the same questions comes up all the time, be it from new businesses, independents, manufacturers and others. Why should I have a website? What is the difference between that and Facebook? And where do Twitter, LinkedIn and others fit all? In fact, is this just one big bluff – a waste of time, money and effort?

They have a point. I have heard of so many clients, who are approached by so-called experts in google ads or facebook or SEO campaigns, selling their services. I am asked for my opinion. And I ask the trick question – can these geniuses deliver new customers? “Well, they will create billions of ‘likes’ and get me to the first page of a google search. And that will do the trick, won’t it?” Er……….

Three months later, I receive a report about zillions of likes and click throughs. However, our experts discretely do not produce a sales report, whose figures have not budged. And why? To find out why, let us go back to basics.

  1. For most commercial operations, social media is a form of advertising, enabling you to get closer to your clients. And it does not matter whether you use an old-fashioned flyer or sophisticated, first you must identify your target audience and where they can be found. So often, our experts just mentioned do not have the commercial experience or patience to initiate that crucial first step. there are some target populations not available on the net.
  2. Facebook is free. Websites can be created in minutes. However, proper campaigns require an investment of thought, money and time, just as was required in the past. Do not forget that you will need to maintain your sites and update them on a regular basis.
  3. In an age of the instant and globalisation, social media tools allow you immediate contact with your client. Thus, make your campaign smartphone friendly. Most internet traffic is generated on mobiles rather from computer screens.
  4. Why will people read your website? For the same reason that they looked at your flyer or newspaper advert. You need to provide interesting and original content, and do so continuously. That is what drives traffic to your sites.
  5. If there are three key elements to remember when creating material, they were neatly summarised in a very practical blog, referring to new content marketing trends for 2015.
  • Keep the message short and simple
  • Use videos, where possible
  • Consider a geographically localised approach.

Gordon Ramsey on ‘Restaurant Makeover’ recruited new customers via free tasters in local markets. I have a retail client in central Jerusalem, whose sales peak, whenever he hands out flyers to passers-by.

That said, there are some golden opportunities to find new clients via social media, provided you remember the rules of advertising, which were determined long before Mark Zuckerberg’s parents were born.

I do not often do this, but today I want to echo the thoughts in full of Danny Rubinstein. A quality journalist, Rubinstein has decades of experience reporting on Israel’s relationship with the Palestinians, especially from an economic standpoint.

Now, it is no secret that tensions in the Holy City have risen. Extremists on both sides have tried to provoke the authorities. And yet for all that and what the world does not see is that life goes on. My son continues to work with two Muslims in his department. The Jerusalem Municipality, as per every year, will distribute free Christmas trees to Christian Arabs. “Palestinian entrepreneur, Hani Alami, is setting up an accelerator on the city’s seam line to draw budding entrepreneurs from both sides of the city.”

Rubinstein makes a key point. Despite the language of political leaders and the rhetoric of those seeking to provoke, the vast majority of Jerusalem’s citizens, whatever their religion recognize the interdependence. And thus the local economy continues to move forward.

Entitled, “Jerusalem, where economics triumphs over violence”, can be read in full below.

Despite incidents of violence in Jerusalem, demonstrations and escalating tension, the economy is bringing a semblance of normalcy to the lives of Jews and Arabs in Jerusalem.

Dozens of Arab bus drivers have stopped working due to harassment and Arab taxi drivers are afraid to pick up passengers in the western city, and yet the overall picture is not one of disruption, but rather of a citywide transport network that is held together by thousands of Arab workers.

Aside from the hundreds of public transport drivers, the capital’s various truck companies hire the greatest number of Arab drivers, and they are joined by thousands of workers in garages, gas stations and vehicle testing spots. Some are Israeli citizens, like the residents of Abu Ghosh and Beit Safafa, but most, those from the East Jerusalem neighborhoods, are not Israeli nationals but permanent residents with a blue identity card.

And it’s not just in the transport sector. Arab workers are employed in every area in Jerusalem, in particular in manual labor, factories, hospitals, and hotels. This is primarily caused by the separation fence, which cut off East Jerusalem from the West Bank and the employment opportunities there. This separation led to a dramatic shift in the social structure of Jerusalem’s Arab population.

Most of the elite and the professionals left, in particular for Ramallah, where they work as senior Palestinian Authority officials, clerks and managers in the Palestinian banks, company executives, high-tech workers, engineers, lawyers and academics. They are not involved in the Israeli labor market; all are employed in the Arab market.

The more disadvantaged remained in East Jerusalem, where they have the advantage of freedom of movement in the west of the capital and the rest of Israel. There are tens of thousands of construction workers and cleaning staff in hospitals, universities and businesses who prefer to live within the city limits so as not to have to endure the checkpoints on a daily basis. They live in the poor neighborhoods of East Jerusalem, and some even run successful contractor and trucking businesses.

The Arabs of Jerusalem, totaling some 350 thousand people, account for about 40 percent of the city’s population. They have a higher income than the Arabs of the West Bank, but the cost of living is also higher in Jerusalem – especially housing prices, which are sometimes four times higher than in the West Bank.

The Jews and Arabs in Jerusalem are codependent. Where one can separate Israel from Gaza and the West Bank with fences and barriers, in Jerusalem this is impossible, with the Jewish and Arab neighborhoods so intertwined. 

So one may assume that economic rules will prevail over politics in Jerusalem, over incitement and over fear. There is no one to replace the tens of thousands of Arabs who work in the capital; not immigrants, not haredim and not the few middle class left in the Rehavia neighborhood

The waves of violence in the city subside fairly quickly, and the defense establishment is making great efforts, and on the bottom line – the Jerusalem economy is stronger than everything else.

Slowly but surely, more and more Israeli companies are looking to London in order to raise money on the international financial circuit. TechFinancials is the latest recruit. With a technology that enables binary options trading, the company is looking to raise around £15 million on the AIM market with a valuation of £80 million.

There have been at least 9 other Israeli companies who have found their way to London over the past year. The most well-known is that of  Tedi Sagi, the prime owner of Camden Market. He is seeking “to raise £100m in an IPO on the junior Aim market by the end of the year, giving the company a valuation of £750m.”

SafeCharge, which launched an IPO in August and raised £75m, AnyOption for £40m, and Bagir for £20m have all been part of this charge. Significantly, barely a month ago, the British ambassador to Israel, Matthew Gould, led a delegation to London of Israeli companies, which are considering using the aim market. Up to that point throughout 2014, Israeli corporations had “raised a total of £535m , with a combined market capitalization of a total figure of £1.3b.”

In a year when the UK and Israel have not always agreed on the diplomatic front, it may seem ironic that the UK-Israel Tech Hub has seem some extraordinary success. Overall, bilateral trade has grown around 26% since 2013. Future trade delegations will promote cooperation the fields of cyber, water tech and agritech, amongst others.

Israelis find London a very easy place to create new commercial value. English is not a problem for most travellers. Geographically, the distance is only a five hour flight or two hours across time zones. And many of the visitors are familiar with Chelsea, Liverpool and Man United. It would seem that this growth in bilateral trade and financial commerce between Israel and Britain is set to continue into 2015.

If you look at the beginning of the book of Genesis, at least two themes seem to come to light. First, to put it mildly, brothers did not find it easy to live with each other. Second, most of our biblical heroes rushed to start a business.

From the perspective of 5,000 years, everything seemed so easy. Abraham worked in his father’s idol shop and sold well, before he wrecked the place. Issac tilled the land and grew crops. Jacob worked hard and had enough income to support twelve sons and their offspring. etc etc.

Ironically, the lessons from then can still be applied today.

  1. Cash flow. Do not be afraid to plan your cash fluctuations at least 12 months ahead, and do not ignore the fine detail such as stock control. This is where most businesses today fail. In fact, in Israel, “12% of survive less than a year. Only 46% last more than five years.”
  2. Validate. Before starting out, take your product or service and test it methodically in front proposed clientele. The information your garner can be so vital. It could save you making unnecessary mistakes, just when you are most vulnerable at the outset.
  3. Identify the precise opportunity. It is extremely important to be aware of your competition. It is even more essential to pinpoint the opportunity and then to create a business model to reel in that value proposition.
  4. It ain’t easy. There is a very brutal fact, which people underestimate. Very few commercial operations around the globe – large or small – have succeeded without going through some very tough times. There is rarely gain without pain.
  5. Seize the moment.  Many of us deliberate and procrastinate before setting out. This period is often accompanied by wordy and seemingly clever explanations. Yet sometimes, you just have to realise that you have to stop the talking and go for it.
  6. Get help. Do not be afraid to look for outside support. Listen to the advice. And it is not a crime to accept it. Success often means understanding how to find a way use the suggestions of others – a spouse, a friend or even a business mentor.

Starting a commercial operation can be so rewarding for the individual. If you follow these six simple guidelines, it can also prove to be a financial triumph.

So due to the incompetence and bloated egos of various politicians , Israelis will be going to the polling booths on March 17th, two years early than expected.

Assumedly, the peace process will take a back seat for the next four months. There again, Abbas and Obama are also not exactly full of new ideas. As for the economy, an interesting situation has arisen.

In the pessimists’ corner, many observers are full of gloom and doom. For example, one financial newspaper has dedicated three pages to all the reforms that have been put on hold and could even be abandoned:  the ports, the postal authority, import regulations, family law and much much more. In addition, the price of government bonds sunk yesterday due to the impending political uncertainty. And the fact is that to finance the elections, around 1.5 billion shekels (US$0.35 billion) of public money will be ‘invested’.

Worst of all, with the economic growth visibly slowing down, the budget for 2015 will not be debated. That cannot be good for the country.

There again, I find three significant monetary benefits to this four month process of political verbal garbage.

First, starting with the budget, because there has been no run-up period, as for example currently exists in Britain, there is no opportunity for the Prime Minister play ‘election economics’. This is where funds are found for seemingly important public projects in order to secure more votes. That game is off the agenda.

Now consider that postponed 2015 budget, which is unlikely to be enacted before June 2015. In its place will reside the 2014 budget, which will be divided up by 12, until replaced by fresh legislation. That means that here also there is no way to put through new expenditures. In fact, when initially introduced twelve months ago, it was considered fairly restrictive.

A third bonus in this bizarre scenario is the rate of exchange. For several years, the shekel has remained strong against major currencies such as the dollar and the euro. For an economy that imports much of its raw materials that has been beneficial to the domestic consumer. For exporters, the backbone of Israel’s economy, this has been a very difficult time.

However, the political uncertainty has created a further devaluation of the shekel – about 14% since August. Bottom line, almost overnight, Israeli goods and services have become more attractive in overseas markets. The prospect of higher profits should secure more jobs locally.

Do not misunderstand me. There are some very worrying immediate problems. For example, there is a general consensus that the Ministry of Defense is severely under budgeted. The question remains how to find the funds.

That said, the Israeli economy has repeatedly shown itself to be very resilient. The present election campaign must just ensure that zealous politicos do not wreck it.

I have been acting as a business mentor for a particular client, who has not been having an easy time. Yet, at our last meeting in a boutique Jerusalem café, she was full of beans. She recalled: –

“I bet you don’t realise what one word you have said to me, twice, and which has made a complete difference just recently. As you walked away from our last meeting with words of encouragement, your told me to smile. And then, when I wrote you an email full of my concerns, you repeated the instruction.

I have since internalised the ‘message’. Guess what? I have just recruited 3 new clients. And that was for a project that I had long abandoned.

All that from a smile? By thinking positively, can we really impact on our work (and family) lives?

Step back for a minute. Dr Robert Brooks posted an article, questioning if the process of aging can be influenced by our mindset. He discussed two scientific tests, where groups of elderly people were confined to a closed house, which was transposed to a period from when they were 30-40 years old. Music, food, clothing styles of the past.

The results were amazing. The participants walked out standing taller. The bodies were more supple. In one bizarre incident, somebody threw away their wheelchair, which was no longer required.

This made me think of my friend Avraham Schlissel, a laughter specialist. I few months ago, I attended one of his workshops in Jerusalem, twenty people nervously wondering what they were in for. Absolutely amazing! Over an hour he asked and encouraged people to slightly adjust the way they addressed each other – in teams, in twosomes, or to the whole group . By the end, we were all on the floor in fits of hysteria, taking away ‘something positive’, which we could use elsewhere.

We are surrounded by negative influences and horrendous graphic pictures in the news. By contrast, it would seem that if we could allow more happiness into our lives, it is not just that we will feel better. We could perform so much better at work. Now is that not worth investing some time and thought to?

From 2003 to 2013, Israel’s GNP effectively doubled. An amazing stat by any standards. Yet, almost suddenly, the economic weather ahead does seem so clement. In the third quarter of 2014, the economy failed to grow for the first time in five years. Fitch has downgraded Israel’s financial outlook to “stable”, although not adjusting its credit rating.

So what seems to be going wrong? Blame the war with Hamas – certainly during three key summer months, businesses in the south of the country reported a downturn by around 30%. Blame the global downturn, and Israel is very dependent on export markets for its high-tech exports. Blame the continuing restrictive practices in certain key areas such as operation of the sea ports or fruit-vegetable distribution.

There is another, more intricate reason .

During much of the decade of success, the current Prime Minister, Benjamin Netanyahu, was very influential in guiding economic policy. One of his previous positions was that of Finance Minister. Love him or hate him, Bibi, as he is known locally, has been a key feature in the rise of the Israeli economy. Even the credit crisis of 2008-9 and wars with Lebanon did not significantly disturb the positive trends on the graphs.

Looking ahead, all is not doom and gloom. The economy is slowing down, but not in recession. The new revenues from off-shore gas supplies are beginning to come into play. Israel is a major player in the new sought-after field of preventing cyber attacks.

Unfortunately, it appears that the architect of this triumph may lack the skills to drive the economy towards the next stage. There are no serious plans to prioritise tackling structural problems – ports, lack of competition in the banking sector, etc. The government has no unified policy to redefine the housing market, which remains on the crust of a dangerous bubble. And the budget for 2015 is showing signs of not adding up. If correct, the erosion of fiscal care could immediately undermine Israel’s international credit rating.

This is where Bibi should be leading. Today he is absent. Tomorrow? The question is difficult to contemplate, let alone answer.

There remain many good economic stats. Unemployment has barely budged from the 6-6.5% level. Exports have held up, despite the summer war with Hamas. Conglomerates continue to seek to enter the Israeli retail market and set up r&d centres.

However, it is not a given that this momentum will remain in place. If Israel wants a further ten years of economic progress, Netanyahu needs to act. That does not mean a glossy speech, replete with clever rhetoric for his electorate. Israelis and the oversees business community are seeking firm targeted policies that will create new wealth in the Holy Land. Should they hold their breath?

This week’s slaughter in a Jerusalem synagogue has focused international media attention on the pain of those who suffer as a result of Palestinian violence. As I explained in my previous blog, there is alternative side to Israel, a society that rarely hits the news reports.

Last time out I concentrated on Israel’s economy, how it is improving the lives of billions globally. Here, I am venturing into local society. This is not to feature the photos of those Palestinians who handed out sweets after the murderous event. Nor is it a look at how Palestinians falsified import licenses, attempting to smuggle in weapons under the guise of Christmas decorations.

Item One: The massacre itself was stopped by a policeman from the Druze community, who later died of his wounds. At his funeral, attended by the president of Israel, the Sephardi Chief Rabbi could be seen shaking hands and commiserating with leaders of the Druze and other ethnic communities.

Item Two: Enter Tel Aviv and you will readily see that this pluralism is no one-off incident. Located on the Mediterranean Sea, it was recently voted the second most-sexiest city in the world. If you find your way to the tourist website, with it listing of pubs and clubs, you will readily understand why.

Item Three: In the same month, Tel Aviv picked up an award as the  ‘world’s smartest city’. The primary citation was the installation of free WiFi for all. Simply no restrictions.

Item Four: Jerusalem should not feel left out. It recently hosted a flash mob, just outside the gates of the Old City. What greater way to demonstrate freedom of expression. Next week, Slovak cycling star, Peter Segan, will be holding master classes around Jerusalem.

Item Five: Be it the Rolling Stones, who turned up this June, the Lord of the Dance troupe due next month, impending visits from OneRepublic, Backstreet Boys, James Blunt et al, Israel has a ready place on the stage for top performing international artists.

I could go on, but I want to bring in the impressions of two travelling Italian business men. They had half a day off during a hectic schedule this week in Israel. Their host told me how he had dropped them near the Old City of Jerusalem and let them stroll by themselves. To paraphrase their conclusions: “Wow, our press never reports just how beautiful and calm it is here in the Holy Land.”

Yesterday’s racist murder of Israelis and a Druze policeman in Jerusalem by two Palestinians has captured world media headlines. Many in Israel have concentrated on the lack of professional standards, demonstrated by the BBC, CNN and others, as well as the whimppish condemnation by President Abbas.

What concerns me is that the noise covers up another side of Israel – an Israel that represents the continuous strive for economic progress and pluralism. So, as five families mourn, several Palestinian villages gloat and journalists scramble for new information, here are some stories that have fallen off the edge of the battle field in the social media war.

Today, I will concentrate on the economy and social issues.

Microsoft in Israel: Microsoft has a strong r&d presence in the Holy Land. It is also active in empowering new start-ups. For example, the CEO in Israel, Yoram Ya’acovi, this week gave a lecture to  the multi-ethnic incubator in Nazereth. It should also be noted that a significant of the Business Intelligence surrounding the ‘Cortana’ element in Windows 10 was developed in Herzylia.

Time Magazine – Israeli technology: Outbrain is an Israeli content recommendation company’s solutions. Its capability points readers on the internet towards interesting articles. Time Inc., America’s largest magazine publisher, has signed up for Outbrain’s package, which is expected to deliver an extra US$100m of digital revenue of the next few years.

Intel: Intel is about to set up its fourth factory in Israel. Aside from chip production, it is also invests in new research. MICA, its new electronic trendy wrist gadget, has been developed in Herzylia and is soon to hit shops around the globe.

Yale Locks: Yale is a large conglomerate that has dominated the international lock market for decades. Based in Sweden, not noted for its support of Israel recently, the company has been reported in the Hebrew press as looking to create a strong presence in Israel. The aim is to create 40 small outlets within the mega stores of Home Centre, which will generate sales of around 100 million nis (US$25m) by 2017.

American Eagle: This international clothing powerhouse has been operating in Israel for about two years. The franchise is managed by Fox, which dominates the local clothing market. Today’s financial newspapers contain reports that AE is so pleased with the results to date that it is building a platform to invest directly in Fox.

Just five positive stories about Israel that the international media does not report. I will develop this theme in my next blog.

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