Afternoon Tea in Jerusalem Archives - Page 57 of 75 - Michael Horesh Business Coach and Mentor

18 August 2010

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Categories: Business, Israel

Let’s not hide it. Even consultants need to check themselves and make sure they are getting it right.

Last week, I received a complaint from a client. Naturally, I believe I am right and they are not, but that is not the point. Nor is it merely a case of analysing why the matter arose. The question is what is the quality service I wish to provide and what is the best manner to deliver it.

With magnificent timing, I was reading an interview with Philip Kotler, Distinguished Professor of International Marketing at the Kellogg Graduate School of Management and a recognised top thinker on this issue.

In effect, the discussion turns out to be a fascinating outline for both client and for consultant – what they should both seek from each other in order to draw up a balanced relationship.

Sure, the client is right to demand value for money against specific milestones, which are then to be agreed in writing. Many issues focus on how they wanted to be branded and positioned.

Kotler is unrelenting in what the consultant has to provide in return. Most crucially, Kotler suggests that there is a need to develop a relationship that transcends the regular professional interaction.

Some people have a natural aptitude for gaining trust and respect from their clients. They are caring and sensitive people, good listeners and learners, and good problem solvers……Build a good database on each client’s activities, interests, opinions, and other pertinent information. This will enable you to customize your services and communications to each client.

Kotler refers to 3 other key points for the consultant:

Show how the work or project will save time and money
Document the use of time. Do not be afraid to do so nor update the client.
Show on-going concern for the client, such as sending articles of general interest.

It is a mute consideration if Kotler’s advice would have saved my relationship with my client. What is available is to continue improving communication channels with clients for the benefit of all parties.

15 August 2010

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Categories: Blog, Israel

Christian Christensen is a professor of global media. In a fascinating commentary, he pointed out how the leaking of tens of thousands of classified documents on America’s role in Afghanistan has proved to be an endorsement of traditional journalism and the rule of good government. How so?

First, the power of Wikileaks is not in its role as part of social media.

Because while complete openness (of the net) might be attractive in theory, information is only as valuable as its reliability, and WikiLeaks has an organizational review structure in place that Twitter, Facebook, YouTube and most blogs (for obvious reasons) do not. All social media are not created equal, and so their power is far from equal.

Wikileaks is a trusted information source. Thus people wanted to find its video on utube, while millions of other exposure tapes are ignored.

Next, the Wikileaks team played on the role of laws designed to protect democracy.

WikiLeaks is semi-officially based in Sweden and has all the protection offered to whistleblowers and guarantees regarding anonymity of sources under Swedish law…..

Material submitted to WikiLeaks first goes through PRQ, and then to servers located in Belgium… which has the world’s second strongest laws for the protection of sources. And WikiLeaks founder Julian Assange chose Iceland as the location for decrypting the aerial video footage of the killings in Baghdad. Iceland recently passed the Icelandic Modern Media Initiative, devised to make the country a global haven for whistleblowers, investigative journalism and freedom of speech.

Finally, Wikileaks carefully exploited old-fashioned media routes.

WikiLeaks decided to release the Afghan documents to the Guardian, the New York Times and Der Spiegel weeks before they were released online ….. The WikiLeaks people were savvy enough to realize that any release of the documents online without prior contact with select news outlets would lead to a chaotic rush of unfocused articles the world over.

And what does all this mean for Israel, who’s opponents claim that the political and military chiefs in Jerusalem hide behind the demands of security in order to cover up war crimes?

Israel has one of the largest foreign press contingents in the world. Its internet system is open and free. Its judicial system was founded on the lines of British jurisprudence.

Are documents leaked? Barely a week goes by without one of the major radio or TV stations blurting out something sensitive. In a country of 7.5 million people, where most civilians have served in the army or knows somebody who has, few secrets are kept for very long.

So is Wikileaks a defunct feature in Israel? Not exactly. However, it seems to possess more relevance in those very countries that are often critical of her policies – such as Sweden, Iceland and Belgium. Now why is that?

10 August 2010

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Categories: Business, Israel, Jerusalem

Israel has a population of 7.5m people and hosts approaching 3m tourists every year. The Czech Republic boasts around 10m people, but entertains over 6.5 m tourists annually.

Both countries have much to offer travellers in order to grab hold of their spending money. However, they also have one unusual feature in common. Amazingly, Prague does it better.

Israel is the world centre of Judaism. The Wailing Wall is infamous. The Old City of Jerusalem is bursting at the seams during the Holy Festivals. As you walk around the city, you are surrounded by biblical and historical events that can link thousands of years in literally a few footsteps. New visitors never cease to be bemused.

And for all that, even if I was to stretch the stats, a little under 3m people come to see this celebration of Judaism every year.

Prague is a 3.5 hour flight away. It is known is the city of the 100 spires, a reference to the churches that decorate the sky line. It is a city where tourists come from all over Europe; Brits, Italians, all parts of Russia, and the rest.

And here’s the point. Prague is littered with tour companies wishing to take you on a different outings around the city. All offer a 3 hour tour of the Jewish Quarter, which dates back hundreds of years and which has survived the Nazis and the Communists.

The guides explain the history, the customs, the food, and the famous Jewish sons of the region, including Kafka, Moser, and numerous rabbis. The story of the Golem originates from Prague, and is recalled in Czech, Russian, Italian, Armenian, Chinese, Korean and many many many other languages.

In other words, more people are exposed to Judaism and its meaning in Prague than in the heart of the Holy Land. More than in Israel, it is in the Czech Republic that outsiders receive a first and positive impression about the Jewish people.

That has been going on for years. So why does it appear that nobody in Jerusalem is trying to copy this successful model?

9 August 2010

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Categories: Business, Israel

Many of you will be reading this during your holiday time. And at some point during this period of relaxation, your mind will drift over to that meeting, which you don’t want to have or regretted attending. Yet another meeting, which goes down as a waste of your time.

And you have to ask the question; with all our experiences in life, how is that we all spend so much time preparing or taking part or following up on hours of discussion round a table, where nothing has happened…with the exception of the release of hot air into the atmosphere.

For the sake of everybody’s sanity, and cleaner air, what can be done? What resolution can we all take in order to make our lives in meetings much happier?

Amazingly, some of the solutions are very simple. Both chairperson and participants could take 5 minutes to prepare themselves; no – not just going over what the agenda should be etc, but by considering in advance how people are going to react to prepared statements. It’s a caseof patiently employing some 101 phsychology.

Then consider your own persona – different meetings have different purposes; decision-making, brain storming, planning, finalising, etc. Most of us have different characteristics, suitable or otherwise for each stage. Be prepared.

And if you are the chairperson, I would point you to some useful tips from Josh Spiro:

Define the purpose of the forum
Ensure that everyone is on the same page in advance
Clarify that the key people will attend
Ensure that the meeting runs to a set time schedule

Spiro also refers to the need of strong interpersonal communications. How true!

I was told of a recent get-together of some senior businessmen, whose combined experience comprised hundreds of years of leadership. Half way through, the chairman unexpectedly turned his anger on one of the fellow members of the steering committee. I understand that a few minutes later, people began to leave the room. No conclusions or follow-up moves were reached. The only mutual feeling was confusion rather than direction.

And so another silly meeting was recorded in the annals of world history. When you combine the time of all the those in the room, hours of work was lost. And that is amazing when you consider how an extra 5 minutes of lucid preparation would have produced a different and more positive result for all.

4 August 2010

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Categories: Business, Israel

Most service providers have been in this situation.

You “chat up” your prospect. You agree on the framework of the project. All sounds great, and then they announce that they cannot, will not, or simply want to pay the price you have asked. What do you do?

Yes, each situation is different. Are they bluffing? How badly do you need a contract at any price? What is the competition like? etc etc.

But let’s be honest. These types of questions should have been evaluated in advance. They are predictable and thus you can have your excuses well prepared.

So what’s missing? You are providing a service of value and of quality. That is why your prospect is talking to you. If that message has been delivered correctly, there should be no need to give a price reduction. There should be no need to back down.

However, it is more than delivering value that counts here. The latest edition of the “Guerilla Consultant” newsletter makes a valid point. When you agree to a fee concession, you

introduce the shadow of a doubt in your client’s mind about your trustworthiness. If you’re willing to cave in on your fee, what else will you compromise to get what you want? Plus, you should expect your future proposals to be subject to tough price wrangling.

In effect, you have “sweetened” the deal too much and the child rapidly becomes used to receiving extra chocolate for nothing. Is there a solution?

Instead of offering price cuts or scope increases, stand firm on the value you’re offering. If your client can’t or won’t pay your fee, find a new level of mutual benefit. When your ideas are good enough and your proposal is compelling, you’ll often find that clients come around and agree to the original fee.

….. In an ideal world, you would have discussed scope and the fee with your client long before your proposal is on the table. But some clients will still try to negotiate price no matter what.

There is no definitive answer. Some people see granting a discount or supplying additional hours as going the “extra mile”. Possibly. And occasionally maybe necessary. I will not divulge here my own tactic to bring the negotiations to a positive finish.

However, there is a growing awareness in management literature that those who hand out discounts tend to lose out – in fact lose twice over in the long run.

4 August 2010

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Categories: Business, Israel

Like many of its fellow travellers, the stock market in Tel Aviv has spent the past few months marking time. Whilst the fundamentals are looking good, European economic uncertainty is acting as a restraint.

Yesterday, there was a serious incident on Israel’s border with Lebanon. Combine that with an unusual rocket attack on Eilat the previous day, and you would expect investors to get jittery. The fact is that after an initial dip of 1%, the index closed the day’s trading marginally down.

To paraphrase a previous CNBC comment about Israel, it is a country that has discovered a path to economic growth, not because of stability, but despite geopolitical uncertainty.

Israel’s stock market has just released a report for the period covering January – July 2010. There are over 600 listed companies. The value of bonds and equities together is close to US$400 billion.

What sparked my interest was the level of daily trading. It has now reached US$567 million, 3% above the previous high of 2008 and many miles away from the troughs of 2009.

That is a true sign of long term confidence in the Israeli economy.

3 August 2010

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Categories: Business, Israel

Despite current hick-ups, the Israeli economy remains a strong bet for the long term. As I have mentioned before, there will be significant financial and structural benefits from the discovery of commercial gas reserves, the new membership of the OECD, and joining the highest level of the MSCI share index.

Today, I came across 3 separate articles, which put all this into focus. First, there was a report showing how Israel’s exports for the period January – June 2010 have been on the move up. Significantly, Israel has capitalised on the growth of emerging economies.

For example, trade with India has more than doubled. When you also factor in the China element, Asia now comprises 20% of Israel’s export market, not bad considering that most of the Middle East refuses to trade with the Holy Land (officially).

Then I noticed a comment on Fox News, which suggested that Obama’s economic policy is floundering. Well, maybe no surprise there as this network is not known as a supporter of the Democrats. The twist came, when the analyst observed that: –

Since 2007, Israel has experienced a mild recession, while America’s has been deep.
Enterprise and its result — innovation — drive Israel’s economy, but are in reverse under Obama.
Under Netanyahu, Israel embraces success and exceptionalism. But Obama fails “The Israel Test.”

Put this together with an analysis from Investopedia, part of the Forbes group.

With 65 public companies listed on the Nasdaq, Israel has exploded to be a major international entrepreneurial and technological center. Unlike other nations which heavily depend on foreign direct investment as a means of job creation and growth, Israeli entrepreneurship has driven the small start-up nation to house some of the most respected technical institutes and major public companies in the world.

Empty words? Lockheed Martin and Morgan Stanley have both announced that they are considering major investment schemes in Israel.

31 July 2010

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Categories: Business, Israel

However you twist the figures, the speed of the Israeli economic recovery is slowing down. The latest report from the Central Bureau of Statistics argues that: –

Economic indicators for the April- June period point to a continued slowdown in the pace of growth in imports of raw materials, trade and services revenue, industrial production and credit-card purchases….

Over the past 6 months, annualised GDP growth has dipped off by about 1.0 % to around 3.5% . On the other hand, the predictions for 2011 remain strong.

Citigroup expects the economy to grow 3.2% in 2010 and 4.2% in 2011. The Bank of Israel forecast is for the economy to grow 3.7% in 2010 and 4.0% in 2011.

Stanley Fischer, governor of the Bank of Israel, has pointed out several times that Israel was fortunate during the initial stages of the credit crisis. As the country was going through a general election, central government was weak. Nobody in authority was around to push through a large fiscal package. Debt did not go through the roof, as in the UK and elsewhere.

Yet last week, a report was issued in America, which details why the very opposite was true for Washington.

Alan Blinder, a professor at Princeton, and Mark Zandi of Moody’s Economics (and one of the chief economic advisors to the McCain Campaign)….. argue that without any of the responses, 2010 GDP would have been 11.5% lower than it is likely to turn out, payroll employment would have been 8.5 million lower and we would now be facing outright deflation rather than just being at risk of falling into it, as we are now.

True, the American and Israeli economies faced very different challenges 2 years ago. For a start, Israel’s banks were sound.

However, there may be a need to move the local debate along. Today, Israel’s high tech sector needs help to reposition itself. The ultra orthodox and minority communities are not engaged in the labour force as the rest of society is. Infrastructure in the north and south remains weaker compared to the centre of the country. Primary and secondary education standards are continuing to slide.

None of the these are impossible issues to resolve. All require financial direction (and leadership) from the centre. Is it time to relax the purse strings?

30 July 2010

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Categories: Business, Israel

My prospective client asked me, Mr Business Coach, how I could help him set up his new operation. After my reply, he told me that he already knew all that. So I asked him what he wanted.

Silence! In one breath, he realised that he did not know and he seemed reluctant to let others try on his behalf.

I have said it before and I will say it again. Planning with a defined, logical vision is essential, before you kick off.

Look at the story of Silly Bandz – US$5 packets of silicone bracelets, making a fortune for the owners. Robert Croak, the founder, clearly understood from the beginning what needed to be done. He hit on an idea, realised how conventional marketing would take too long to work, and thus used a social media campaign. His rapid success has been recorded on Bloomberg, CNN et al.

And when the initial effect wears off and others begin to copy him?

We’ve been planning some new products that will make Silly Bandz a household name for the next 5 to 10 years.

Know your direction. Know your numbers. Ask yourself some hard questions to confirm that everything is reasonable. And go for it.

25 July 2010

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Categories: Business, Israel

The fall out from the Turkish flotilla, originally sent to bolster the Hamas regime in Gaza, continues to reverberate in the commercial world.

There is no doubting it. Until June 2010, bilateral Turkish-Israel trade was continuing to reach new heights – over US$1.5 billion annually. And the defense sector was one of the main beneficiaries.

Today, Israeli and UN led commissions of inquiry fill up the news print. On the ground, 10s of thousands of Israeli tourists have abandoned Antalya and other Turkish resorts in droves – replacing them with the hotspots of Crete, Cyprus and Eilat. Several Israeli supermarket chains have declared that they will order less products from Turkey.

Britex is a small Israeli importer and distributor of textiles. As their Turkish suppliers have raised prices, the company has responded by moving to other sources. According to their CEO, orders are up 30% ever since.

Negev Textile Ltd is located in southern Israel near Sderot, which has seen thousands of missiles land on the town from Gaza in the past decade. The company dyes textiles and has suffered from Turkish price competition in recent years. Suddenly, its all change and the clients have started to storm back.

When Fatah launched the Intifada in 2000, little consideration was given for how the local population may suffer economically. Much the same can be said for the Turkish government, where its support for the flotilla has been followed by a down turn in parts of its own economy.

And in the meantime, the tactics of Hamas has resulted in a micro boom for some Israeli manufacturers.

25 July 2010

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Categories: Business, Israel

Bare Escentuals (BE) is an American manufacturer of mineral-based cosmetics. Starting out as a cottage industry in 1994, the firm is valued today at over US$1.7 billion, approximately. The story of everybody’s dreams, but is it a reality available to all?

If you read about BE, you begin to identify 3 common themes which can be seen in many successful businesses.

First, no pain means no gain. I have met several people recently, who are good, intelligent, decent folk. And they feel that this should be enough to ‘make it through”. The horrible truth is often very different. However you cut it, most people do not get on without some sacrifices and a lot of sweat.

Take it from another angle. How many of us go through tough patches on our home (or private) turf. Not everything comes easy. So we should not expect anything different in commercial life. My good friend Mike Faibisch recently gave true expression to this and serves as an inspiration for others.

Next up is planning. At a very early stage, entrepreneurs must think through their vision and ask if it makes sense. If so, how and why. It is almost invariably the role of the big chief and founder to steer the set up period around many obstacles, and this in turn requires a firm plan of action.

I recently sat down with a CEO. He had three action items on the immediate agenda. But their timing was out of sync with each other. He was afraid that tasks would be completed and effort expended, but the overall effect would be minimal. Brilliant!

And the third factor is all about “seizing the moment”. Sometimes, entrepreneurs need to just go for it. I was once working with an inventor. His product was simple but effective. He was offered a route to market by a single importer.

However, my client could only see bigger dollar signs in front of his eyes. Eventually, all his contacts became tired of him and he was left with his hopes, a worthless patent and a dwindling bank account.

21 July 2010

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Categories: Business, Palestinians

Like many things in Gaza, the truth about its economy is covered up amongst the spin of interests groups and their supporters. Even the IMF and World Bank surveys, are often prepared by locals, who are suspected of having a ‘less-than-objective’ agenda.

As I observed a few days ago, the inherent contradictions were brought to light by the visit to the region of EU foreign policy chief, Ashton. In order to combat what she saw as a humanitarian crisis, she announced another aid package. Yet, on the same day, the people of Gaza were treated to a brand new shopping mall.

What’s really going on?

Back in May, before the flotilla fiasco, the Financial Times was already reporting that: –

Some argue that Gaza’s tunnel economy is becoming a victim of its own success. … the remaining tunnels, about 200 to 300 according to most estimates, have become so efficient that shops all over Gaza are bursting with goods.

Branded products such as Coca-Cola, Nescafé, Snickers and Heinz ketchup – long absent as a result of the Israeli blockade – are both cheap and widely available. However, the tunnel operators have also flooded Gaza with Korean refrigerators, German food mixers and Chinese airconditioning units. Tunnel operators and traders alike complain of a saturated market – and falling prices. “Everything I demand, I can get,” says Abu Amar al-Kahlout, who sells household goods out of a warehouse big enough to accommodate a passenger jet.

A month later, The Economist confirmed that life in Gaza was far different than what Ashton et al is led to believe.

American investors of Palestinian origin are set to open Gaza’s first mall. Land prices in Gaza city have shot up. Saudi investors have asked management consultants to look for opportunities.

The Palestinian news agency, Maan, is an excellent source of news. If you click on its Gaza page, you will see a typical spread of anti-Israel features. Understandable. And in-between, you can also learn how new cars are about to be sold in Gaza. Evidently, there is a lot of spending power in Gaza.

Maybe the real question is who has access to this financial wealth? In early July 2010, the Palpress news agency released a report in Arabic about Hamas corruption in Gaza. As a (google-supplied) translation reveals:

Hamas movement in the Gaza Strip a chronic crisis because of corruption, its ugliest forms, in all joints of political and military, from its Prime Minister Ismail Haniyeh, who continues with his family to buy apartments and land through the military wing ” Qassam Brigades, “all the way to junior government officials who receive bribes from citizens burdened because of the Israeli blockade.

So we have NGOs and the EU claiming water and health situation in Gaza is not up to standard. We have consuming spending going through the roof. And the top politicos are on a roll.

In order to sustain this economy, three things need to happen. First, Hamas must maintain its autocracy. Second, Western taxpayers must be prepared to contribute generously, and at the expense of other important causes. Finally, the international media must continue to ignore such contradictions, just as it has failed to report on the new mall.

20 July 2010

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Categories: Business, Israel

Israel’s business climate worsened moderately in the second quarter as uncertainty in global markets and Europe’s debt crisis affected the risk level of local companies, Business Data Israel reported Sunday.

Not very optimistic. In the second quarter of 2010, exports were lower by 2.5%. There are clear concerns that the economy is slowing down, especially has Europe struggles to emerge from the credit crisis. Even foreign investment is falling off.

At this point, it is worth taking a breath and pausing for thought. The Israeli economy is still perfoming well, with growth at around 3.5%. It is just that this is not as high as predicted or hoped for.

Trade delegations are still popping over in quantity. I was chatting to a member of a team from Colorado. Amongst several opportunities, he was looking at further gas exploration. For him, what has been discovered in the Tamar field is just the beginning of a long story. The net result will be a massive positive shift in Israel’s balance of payments, and probably with geopolitical fall out as well.

Now consider that Israel appears to have a central budget and inflation under control. Unemployment is at 6.5% and dropping. And when you factor in the expected investments resulting from OECD membership and the Tel Aviv Stock Exchange joining the leading MSCI index, the long term future looks very healthy.

Yes , there are still concerns. Despite a recent weakening, the shekel remains strong against leading currencies, which harms profitability. And, as many have written, the high tech environment demands systematic restructuring; too much emphasis on the wrong technologies.

So, what’s the wrap up? The short term is unlikely to produce any exciting stats. But this is not an indication of a recession. The year 2011 is still looking good.

19 July 2010

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Categories: Business, Israel

Israeli high tech may be wondering about its next steps. However, the charge towards innovation is still on. Only yesterday, I met a start up medical device company that has incorporated the letter “D” in its name, which stands for “destructive tech”.

I have written how Denmark is looking at the Israel model to becoming a successful innovative society. Yesterday, I went to a fascinating evening, where a new Canadian commercial approach was presented.

The discussion was led by Mr Sheldon Potter from Fogler, Rubinoff LLP and by former Israeli ambassador to Canada and now President of the Israel Canada Chamber of Commerce, Mr Alan Baker. Now Canada is an economic powerhouse. Toronto hosts the world’s 8th largest stock market. The country boosts a comfy life style.

As Potter observed, Canada has become “innovation hungry”, and there is little infrastructure to support the desire for change. And why look to Israel? In Canada, university research papers used to stay on the shelves. In Israel, they are commercialised.

In the past few days, the Canadian media has picked up on the theme of how poor innovation results in low productivity. For a country trying to emerge from the shadow of its American neighbour, that is bad news. Ontario Premier, Dalton, McGuinty, has been amongst the most open in calling for a change in economic direction.

And here’s the connection to Israel. McGuinty recently led a strong delegation to the Holy Land to consider joint ventures in the health sector. The states of Manitoba and Quebec have fielded similar task forces. There are discussions to set up Canadianincubators, as well as an office of the chief scientist, just as Israel did many years back.

And as for cooperation between the two countries, there are many stories to tell. An Israeli solar panel company has reached a technology agreement with a large manufacturer of spare parts for cars. And in a few months, a major delegation from the retail sector will be seeking partnerships with innovative Israeli manufacturers.

If Denmark and Canada can learn from Israel, who wants to be the next economy to benefit?

18 July 2010

4 Comments

Categories: Business, Israel, Palestinians

On 14th July, the EU announced increased financial support for the Palestinians.

The European Commission has agreed an additional financial package worth € 71 million for the Occupied Palestinian Territory, topping up the € 224 million already allocated by the EU in the 2010 European Neighbourhood and Partnership Instrument, as well as a reinforcement of humanitarian aid for Palestinian refugees.

For Catherine Ashton, the EU top foreign policy official, Israel has not done enough to help the poverty of the Palestinians. And many claim that the situation in the West Bank is not much better. Citing charities like Save The Children Fund, bloggers say that West Bank prosperity is a myth.

Boring stats reveal that in absolute terms Gazans received only 12 tons per month of food aid – far less than Zimbabwe, Ethiopia or any of the other hot spots. Put that into “loaves of bread per head”, and suddenly Palestinians have received 10 times more than their “competitors”.

Sounds wrong? Well have a look at these photos. On the same day that Ashton was moaning about poverty in Gaza, a brand new shopping mall was opened in the area. Some kind of computer imagery ploy? Not if you check out the website of the mall.

And no, these are not isolated situations, taken out of context. Here is how one Syrian blogger compared many Arab countries to what he has witnessed in Gaza.

And as for the West Bank, it is not just the luxury car business that is booming. The end of Plaetinian led violence has seen a return to the choices of normal consumer spending.

The biggest demand is for their four-wheel-drive models, but prestigious European cars are also selling well. The Al-Bustami company, for example, deals exclusively in German cars such as BMW, Mercedes and Golf.

What is it that Ashton refuses to acknowledge? Why are Western taxpayers bank rolling this hypocrisy?

Back in February 2010, acclaimed Palestinian journalist, Khaled Abu Toameh, asked the same question.

Donor countries have yet to respond to revelations by former Palestinian intelligence official Fahmi Shabaneh that top Palestinian Authority officials are continuing to pocket millions of dollars, earmarked for financial aid to the Palestinians in the West Bank and Gaza Strip.

“Don’t the Americans, Europeans and Arabs care about their money that is being stolen? If they continue to turn a blind eye to the corruption of the Palestinian Authority, Hamas will eventually take over the West Bank the same way they took the Gaza Strip.”

Nearly a month after Shabaneh, who headed the anti-corruption unit in the General Intelligence Service, revealed in an exclusive interview with The Jerusalem Post that some of Palestinian Authority President Mahmoud Abbas’s close aides and loyalists had siphoned off hundreds of millions of dollars to private bank accounts, decision-makers in the US and EU continue to bury their heads in the sand.

Hamas or PA; Gaza or West Bank; Ashton and her caring political friends are determined to plough on with their spin, but for the benefit of who?

17 July 2010

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Categories: Business, Israel

Sver Ploscker is one of Israel’s leading economic journalists. So, when his latest column echoed my thoughts on Israeli high tech, I was very pleased but saddened in one breath.

Yes, sure, my ego was gently stroked. However, he was also indicating that not all is looking so rosy for the future of the power house of the Israeli economy.

Ploscker based his thoughts around an interview with Haim Shani, the director-general of the finance ministry. Now Shani is no ordinary bureaucrat. When he was convinced to join the civil service, he had to give up on his successful post as CEO of Nice Systems, one of Israel’s largest software houses.

As Shani reports, high tech accounts for around 40% of Israel’s exports and 15% of its wealth. So, if something was to go wrong there, the country could be in trouble.

What seems to concern analysts is the “start” of the process. “Innovation”, that key buzz word, is no longer so paramount. Shani notes that less scientific degrees are being awarded. There is less local money available at seed stage. In fact he noted how more money is poured into real estate, locally and overseas, rather than into industry.

The discussionwas not totally pessimistic. However, the conclusion is clear. There is a clear need to evaluate quickly how to apply Israel’s many strengths and capabilities with changing global commercial trends.

15 July 2010

3 Comments

Categories: Business, Israel

“Obviously we will set up a Facebook (marketing) operation in Israel.” Thus says their VP Advertising exec, David Fischer, in an interview with the Hebrew paper “The Marker”. And the company will join other megas like Siemens, Microsoft and Intel with significant operations in the Holyland.

Great news indeed, but is it merely covering up a more disturbing trend. Is the Israeli high tech boom, which has been running for nearly 20 years, reaching the end of its path?

The success of the recent decade, despite wars and recessions, has been staggering. GDP has risen over 3% per annum on average. Using OECD, Israel invests over 4.0% of its income in new industry. The country continues to rank amongst world leaders in patent generation. Jerusalem has become a centre for the solar technology. Etc, etc, etc.

And yet, something is not quite right. There are numerous reports that overall funding of new investments has not picked up since the credit crisis. A new index for biomed shares has proved to be a disappointment – although admittedly it was launched in a difficult period for stocks globally.

Michael Eisenberg is a leading local commentator. In the first of a 2-part article, he observes that “the world of technology is rapidly changing around us and we are not doing enough to address the challenges.” Eisenberg’s specific complaint refers to human resources – too many start ups chasing too few people, many of whom are trained in the wrong disciplines such as dot-net.

Eisenberg used the example of Conduit. It is no secret that this Rehovot based company has sales that have gone viral, rapidly . And yet, despite great benefits for employees, Eisenberg writes how they are finding it difficult to recruit the correct talent.

Eisenberg’s key theme of the wrong resources in wrong areas was rammed home to me yesterday. I attended an innovation seminar, organised by various public bodies in Jerusalem. For example, Bioline was there, again stressing the message that the capital city has much to offer towards the growth of the country.

The lead talk was given by a senior figure from the Office of the Chief Scientist. One of his slides proudly showed how despite the recession, his team has increased investment in new projects. And as he continued his explanation, revealing the breakdown between sectors such as telecoms, life sciences and others, somebody whispered quietly “where is the figure for cleantech projects”?

Where indeed? This new industry was not on the chart. That says something, and sends out a message unease.

The high tech and communications industrial revolution has been rapid. Globalisation is the buzz theme. Has Israel become too confident and not realised that the world’s innovative streak is now rushing ahead, without her up front?

13 July 2010

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Categories: Business, Israel

I dislike my mobile server, Orange. I recently wrote how their sales force botched a basic 101 course in customer care.

If that episode was not stupid enough, a few days ago Orange completely failed a “retake exam”. You see, I gave them a second chance and inquired about special deals, if you are located overseas.

I could not get a straight answer. They forgot to mention VAT or daily service charges, depending on the proposed deal. And when I asked who could help set up the phone as you go abroad, it turns out that the “help desk” ar the airport closes around 7.00pm, one of the busiest flight times of the day!

Let me be clear: For the moment, I am very unhappy with Orange. And for all their smily adverts and thousands of wonderful workers, nobody seems interested. Why should they care as the profit levels keep on shooting up?

This week, the Ministry of Communications has proposed allowing a fourth mobile supplier on to the market. The established teams have cried that there is no room. Surly, this was not out of self-interest!?!

Where the Israeli mobile industry leads, the specs sector is right behind. My wife wanted one pair of new glasses. This week, she went into several shops, mainly branches of large chains. We are talking about little bits of plastic, nicely cut, and coated with aluring colours.

Everything was exorbitantly priced. She could receive a 1+1 deal, but if she took one item only, it would be the same price as …2! She was offered multifocals, when she does not need them! She was offered……well everything she did not need, and was made to feel a fool for not accepting the chance to go into overdraft. Thankfully, she did not agree to any sales’ terms, and we got to eat a meal that night.

As she put it, all the assistants were simply shooting themselves in the foot, as her next stop is to consider laser surgery! She has an appointment on Thursday.

The internet and professional literature is awash with techniques on customer care. The Israeli retail sector is booming. Maybe the Israeli consumer should encourage a recession, and that way they will begin to be treated properly.

12 July 2010

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Categories: Business, Israel

I previously wrote about how Israeli high tech deservedly receives coverage in international media. Business Monitor International has just published its latest survey of technology from the Holy Land.

It makes for impressive reading for a country with only 7.5 million people and surrounded by geopolitical concerns. And the future outlook remains optimistic:

The Israeli IT market has a number of positive fundamentals, which should keep it in positive territory during BMI’s five-year forecast period. Household computer penetration of around 75% offers potential for further growth. High internet penetration and growing broadband penetration are drivers for the retail segment, while the financial services sector accounts for about 15% of Israeli IT spending.

I have copied the article in full below:

2010-07-11 22:24:05 – Recently published research from Business Monitor International, “Israel Information Technology Report Q3 2010”, is now available at Fast Market Research

BMI projects that the Israeli IT market will have a value of US$4.9bn in 2010. The Israeli IT market should gain enough momentum from key sectors to expand at a compound annual growth rate (CAGR) of 6% over BMI’s 2010-2014 forecast period, thanks to stable demand from defence and government sectors as well as opportunities in verticals like financial services and small and medium-sized enterprises (SMEs).

Spending is expected to resume single-digit growth in 2010 after a contraction in 2009. In early 2010, there were reports of a pick-up in the flow of projects. Vendors reported that demand had revived in the key financial services vertical, where new projects included an US$11mn IT outsourcing tender by the First International Bank of Israel. Healthcare, the public sector and utilities were also generating projects.

The Israeli IT market has a number of positive fundamentals, which should keep it in positive territory during BMI’s five-year forecast period. Household computer penetration of around 75% offers potential for further growth. High internet penetration and growing broadband penetration are drivers for the retail segment, while the financial services sector accounts for about 15% of Israeli IT spending.

Industry Developments

In 2009, Israel’s high-tech sector suffered as demand for high-tech exports dropped by at least 10-15%, with as many as 10,000 sector jobs feared to be at risk. This represented a major concern for the Israeli government given that high-tech accounted for around 10% of Israel’s economy, with annual sales estimated at around US$25bn. Major IT firms were retrenching in Israel, including SAP, Cisco and HP. IT is viewed as an important policy tool for the Israeli government’s 2008-2010 socio-economic policy framework. In 2009, the National Economic Council recently submitted a policy agenda to the government, which specified two main policy tracks of reducing poverty and achieving balanced growth. The first track was expected to emerge as the main priority.

As part of its modernisation agenda, the government is pressing ahead with various other strands of its egovernment project. Among other initiatives, there has also been spending on computers in healthcare and the nationwide paperless court initiative. The e-government programme is leading to increased demand for computers, with the Israeli government reaching supply agreements with vendors like Dell and HP.

Competitive Landscape

The Israeli IT services market is competitive, with leading multinational competitors IBM and HP – following its merger with EDS – both estimated to have Israeli IT services market shares of around 10%. HP Israel’s software division hosts HP’s biggest research and development (R&D) centre worldwide, and the company also has significant production facilities in Israel.

Leading IT services vendors, including Israeli companies Ness Technologies and Matrix as well as US company IBM, experienced mixed fortunes in the Israeli market in 2009. Ness Israel reported a 17% decline in full-year 2009 revenues compared with 2008, although around one-third of this was due to foreign currency effects. Meanwhile, market leader Matrix reported wins in a number of key sectors including healthcare, financial services, defence and government.

In 2010, Microsoft Israel, which as an annual turnover of around US$1bn, hopes that sales of its Windows 7 operating system, launched in October 2009, will boost its sales. Microsoft anticipated that support from leading PC makers would underpin success for the new system, despite some caution from businesses. Israel is also an important R&D centre for Microsoft, and in 2010 the company’s Israel R&D centre launched a new unified access gateway (UAG) product.

Computer Sales

The Israeli computer hardware market, including desktops, notebooks, servers and accessories, is projected at US$2.2bn in 2010, up from US$2.1bn in 2009. The market is expected to grow at a CAGR of 5% over the forecast period to reach US$2.6bn in 2014. Spending is expected to resume single-digit growth in 2010, after a contraction in 2009 due to the economic slowdown and unemployment hitting consumer demand for electronics goods. Household consumption moved into negative territory in 2009, and although there was a slight recovery in H209, trading conditions remained tough.

Software

Israeli software spending is projected at US$1.0bn in 2010, up from US$973mn in 2009. The packaged software segment is expected to grow at a CAGR of around 7% over the forecast period. Businesses are expected to remain cautious, deferring investments or looking for ‘good enough’ solutions to immediate problems. However, there should still be several growth areas going forward.

Spending on software is shifting towards the SME segment, which forms the mainstay of the Israeli business sector. Spending on enterprise solutions has grown since 2007, with reviving or emerging areas of opportunity including security, customer relationship management (CRM) solutions and business intelligence. In terms of verticals, the financial sector has been a mainstay of demand, with other key opportunities including defence and healthcare.

IT Services

The IT services segment is estimated at US$1.6bn in 2010, and this is expected to grow at a CAGR of 7% over the forecast period to reach US$2.1bn in 2014. In early 2010, there were reports of a pick-up in the flow of projects, but growth is expected to reach a higher trajectory in the second half of our five-year forecast period.

Government and defence are two key sectors likely to be a continued source of opportunities, because the factors driving spending in each case are not particularly sensitive to economic vicissitudes. Another key area of opportunity is healthcare IT. Despite failing to capitalise in the past, Israel is starting to emerge as a desirable location for packaged applications and localisation services.

E-Readiness

Israel’s relatively high PC penetration and the growing availability of broadband access mean that internet penetration is likely to continue its upward trajectory. The government has announced that it intends to make a big effort to narrow the digital gaps that manifest themselves across various demographic lines.

Israel’s strong broadband growth has long relied on a handful of developments across the market. These include the competition between Bezeq and the cable companies, with five major internet service providers (ISPs) vying for market share from both the corporate and residential markets, which enjoy high PC penetration rates, advanced telecoms infrastructure and minimal regulatory intervention. Another development likely to stimulate growth is the introduction of local loop unbundling (LLU), which will give alternative operators access to Bezeq’s network and will stimulate much greater competition. LLU was due to be implemented by end-2009.

For more information or to purchase this report, go to:
– www.fastmr.com/prod/71664_israel_information_technology_report_q ..

About Business Monitor International

Business Monitor International (BMI) offers a comprehensive range of products and services designed to help senior executives, analysts and researchers assess and better manage operating risks, and exploit business opportunities, across 175 markets. BMI offers three main areas of expertise: Country Risk BMI’s country risk and macroeconomic forecast portfolio includes weekly financial market reports, monthly regional Monitors, and in-depth quarterly Business Forecast Reports. Industry Analysis BMI covers a total of 17 industry verticals through a portfolio of services, including in-depth quarterly Country Forecast Reports. View more research from Business Monitor International at www.fastmr.com/catalog/publishers.aspx?pubid=1010

11 July 2010

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Categories: Business, Israel

It’s the time of year, when Red Herring announces its picks for the new up-and-coming tech giants. Yet again, the number of Israeli firms are disproportionate to other countries.

Examples abound. In the North America category, the winner is Contendo, which provides internet acceleration software. Barely in existence for two years and with its HQ in sunny California, the founders and development are very much centered in the Holy Land.

In the European category, 8 of the top 100 firms selected are Israeli. I was particularly impressed by TaKaDu, when I saw it demonstrated last year. The software offers local authorities a simple and effective method to monitor water loss, thus saving millions in costs and wastage of a valuable resource.

Red Herring is not the only media watching Israeli companies. This weekend, I was reading the latest edition of Fast Company, which ran a special focus on WeCU. Based in Caesarea, this small outfit has developed a software-hardware-behaviour science combine, which detects intent. Applicable when handling airport security or workplace sensitivities, this proven approach does not require any physical or spoken contact with the “target”.

I know that the tech was evaluated by one of the arms of the American military, which unofficially indicated that WeCU are ahead of their competitors in the field. The company is currently completing another round of field trials.

CNBC has recently focused on creative companies. Three of the 25 named are from Israel. Of these, a biz dev colleague told me that he was exceptionally impressed by the skills of BriefCam, and he has taken them in to the UK market.

I have covered here homeland security, cleantech, internet, video surveillance, and more. On Friday, I had a long conversation with a Danish lecturer on renewal and change. He asked what Israeli culture possesses that allows for so much innovation. The answer is not straight forward. Whatever the analysis, the international community will continue to focus on Israel, when discussing new technologies.

Pages

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Israeli high tech dream – time to wake up?

More Israeli firms join Orange in failing customers

Economic value of Israeli high tech

Israeli tech companies draw global praise

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