Israel Archives - Page 7 of 51 - Michael Horesh Business Coach and Mentor

22 April 2019

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Categories: Afternoon Tea in Jerusalem, Blog, Business, Israel, Jerusalem

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

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

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

Following up on that theme:

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

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

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

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

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

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

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

18 April 2019

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Categories: Afternoon Tea in Jerusalem, Blog, Business, Israel, Jerusalem

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

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

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

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

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

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

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

What does this all add up to?

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

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

7 April 2019

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Categories: Afternoon Tea in Jerusalem, Blog, Business, Israel

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

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

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

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

But…..

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

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

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

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

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

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

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

The Globes financial newspaper surmised:

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

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

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

5 April 2019

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Categories: Afternoon Tea in Jerusalem, Blog, Israel, Palestinian Society, Palestinians

The unnamed Lieutenant-Colonel from the Israeli intelligence forces said that they cried, when his team realised that they had identified the body of Zechariah Baumol. Somehow, after 37 years, the Israeli army had tracked down his place of burial. With the help of Russian President Putin and a third country, the reserve soldier, killed in Lebanon, had been brought out of Syria and was laid to rest in Jerusalem.

April 2019 is a horrendously divisive time in Israel’s history. The general election campaign has taken few hostages. Somehow, the story of this first sergeant, wrapped in the humility of his mother, sister and other family members, has humbled the nation. Prime Minister Netanyahu called his ‘return home’ as one of the most emotional episodes in his reign at the top.

In a sense, for a few hours, campaigning ‘seemed’ to be thrown to the gutter, along with all the useless flyers and interfering WhatsApp messages. The failing health of the President’s wife, Ruhama Rivlin, has also struck a cord of unity, even if the President himself had been insulted earlier in the week by the Prime Minister.

However, to my amazement, the other picture that has caught my attention was in today’s edition of the Ha’aretz newspaper, known for its vocal support of Palestinian rights. On page 24, we see a full picture. The caption describes Palestinians running away from gas canisters launched by the Israeli army, presumably at a demonstration near the border with Gaza. In the foreground, are seven children and one adult. Sad, no?

Now remember, for the first time in years, the Palestinian issue is very much off the front pages in this election. What is really sad for me is that the picture has a misleading attribution. Over 20 other people in the background are just loitering about – no tear gas is bothering them. No child is wiping their eyes.

And then you have to ask. Who takes under age children to a demonstration, especially when violence is a probability,…..and why?

Take a step back. In 2010, the Arab League set up a special fund for donations to be funneled to the Hamas-run Gaza Strip. Currently, the World Bank estimates the GDP of Gaza at 1% of that of Israel. What has gone wrong?

Egypt’s border closure back in 2012 has had a major impact. Hamas determination to invest in military aggression against Israel – 1,000 rockets fired in 2018 alone – has diverted resources. In the past year, President Abbas has cut off funding from his Hamas enemies.

More pertinent is the question what happened to that money from the Arab League? At the end of 2014 and the latest major fighting with Israel, US$4 billion was promised. In the following two years, about US$1.8 billion turned up. New suburbs were created. Water systems were installed.

But, then the donors assessed the level of graft by Hamas officialdom. According to the World Bank, the money flows faltered to US30 million monthly in 2017 and a paltry US$4 million last year. Combine that with Abbas cutting 30% and then 50% of the annual US$1.5 billion allocation, which he was supposed deliver, and then you can begin to wonder.

The stats continue. The standard of living in Gaza dropped by 10% in 2018. It is 140% higher in the West Bank, as ruled by the Palestinian Authority of Hamas.

The fundamentalist and intransigent, terrorist government of Hamas was propped up by Arab friends for years. It is currently funded by suitcases (literally) of dollars from Qatar. Weapon systems, originating from Iran, are still smuggled in.

Whatever the outcome of the Israeli election, the internecine Arab hatred will continue. It is sad. It is tragic, but it is not Israel’s fault. Whether Netanyahu wins or not, the upshot of the economics of Gaza will see the adult population continuing to send their kids to the front line. Sickening.

29 March 2019

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Categories: Afternoon Tea in Jerusalem, Blog, Business, Israel, Jerusalem

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

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

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

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

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

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

19 March 2019

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Categories: Afternoon Tea in Jerusalem, Blog, Business, Israel

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

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

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

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

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

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

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

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

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

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

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

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

15 March 2019

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

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

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

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

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

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

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

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

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

8 March 2019

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Categories: Afternoon Tea in Jerusalem, Blog, Business, Israel

The role of women in Israeli society is not a simple issue to discuss.

First, there are two conservative blocks – the ultraorthodox and Arab sectors – which are traditionally very conservative in outlook. And the important role of the army in day-to-day life, albeit that many more combat positions are now available to women, is another limiting factor.

Just recently, much has been made about the lack of women in senior roles in the political system. This is especially pertinent since elections are coming up. In fact, the World Bank ranks Israel as only 76th in gender equality.

However, all is not doom and gloom. Most of the senior positions in the banking system are held by women. The JLM-BioCity Event this week hosted ten female leaders in the field of pharma and biotech. Forbes is blazing another trail with its first Under 30 Summit for Women, to be held March 31-April 4 in Tel Aviv and Jerusalem. Meanwhile, one enterprising blogger attests to six Israeli women with a mission to change the world for the better. And it does look as if Druze women will finally have a rep the Israeli Parliament.

Clearly much is still to be done. However, I will leave the last word with the Israeli Central Bureau of Statistics, which released a mountain of info to commemorate the day. (And I quote in full).

International Women’s Day 2019
Central Bureau of Statistics annual report
The statistics in this report are mostly from the year 2017.

• Female population in Israel at end of 2017 – 4,433,560 (out of about 8.9 million total population), of whom 27.3% were age 14 and younger, and 12.8% were over age 65.
• The average age of giving birth to a first child rose in the last decade, from 26.8 in 2006 to 27.6 in 2017
• Fertility rate of women in Israel: 3.11 children, compared to OECD average of 1.7.
• Babies born to single mothers accounted for 5.3% of all Jewish babies born in 2017.
• Life expectancy for women in Israel is 84.6 (compared to 80.7 for men), a rise of 2.2 years in the decade 2007-2017, compared to 2 years among men.
• Overweight: Age 20 and older, 40.9% of women and 55.4% of men were overweight.
Education
• Among 12th-graders, more girls than boys were eligible for a matriculation certificate – 70.9 % compared to 59.2% respectively.
• Among Arabs, the disparity between male and female 12th-graders is greater. Of those fulfilling the qualifications to enter university, 56.6% were women and 37.8% men.
• In the 2017/18 academic year, 59% of university students were women. Compare with 1969/70, when less than half of the students were women.
• Among Arab students, 68.9% were women.
• Percentage of women among academic students: 58.4% of BA students, 62.2% of MA students, 52.8% of doctoral students, and 74.3% of diploma students.
• Women constituted over 80% of the students in paramedical professions and education, and only 30-35% of the students in physical sciences, engineering, mathematics and computer sciences.

Employment 2018
• Participation in the labour force of women age 15 and over was 59.8%, compared to 68.2% of the men. More men than women were employed full-time. Among both men and women, the unemployment rate was about 4%.
• Women constituted 56.3% of employees in academic fields, and 33.8% of managerial positions were filled by women. 34% of hi-tech workers were women.
• 90% of working women are satisfied with their jobs, but only 56% are satisfied with their salaries.
• Since 2007, the gender-based disparity in income decreased for salaried workers, but increased or was unpredictable among the self-employed.
• Among married couples, in 67.2% of one-income households, the wage-earner is male. Among Arabs, the percentage is even higher. Among the ultra-orthodox, the reverse is true – in 76.8% of one-income households, the wage earner is the woman.

• Of 34,200 people tried for criminal offenses, 7.5% of them were women.
• Licensed drivers in 2018: among the Jewish population, 45% of licensed drivers were women; among the Arab population, 38% (a rise from 31% in 2008).

3 March 2019

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Categories: Afternoon Tea in Jerusalem, Blog, Business, Israel, Jerusalem

It is about to arrive. OurCrowd’s annual Jerusalem investor summit will take place this week.

The show is sold out. Participants are expected from over 150 countries, and I intend to meet a few of them at a client later on today. All for an operation that has been going less for a decade and will place investments from US$10,000 upwards. So what is the big deal?

The Globes newspaper answered the question very succinctly recently, and the article includes a full interview with the CEO, Jon Medved.

30,000 investors are registered in OurCrowd’s crowdfunding platform. Figures provided by the company to “Globes” show that in 2018 alone, the fund raised $400 million and invested in 80 companies: 24 new investments, 56 follow-on investments, and four investment funds. The fund was involved in 29 exits, the most prominent of which were BriefCam, sold for $90 million to Canon, and Jump, sold for $200 million to Uber. In 2019, OurCrowd has already been involved in the sale of Corephotonics to Samsung for $155 million.

I was stunned by a further set of stats I read in another paper over the weekend.

OurCrowd relies on over 170 experts
An investor will typically receive at least 5% of the shares of a company
About 10% of the investors are Israeli.
The average amount invested each time is around US$350,000. And a total of over US$1 billion has been raised to date.
3 companies have reached a valuation of over a US$1 billion. A further 37 are worth over US$100 million.
And yes, 13 companies closed up.

I am somewhat stunned that others have not copied this model. There again, these numbers do explain why thousands of international investors, assumedly many from countries not normally associated with Israel, will be converging on Jerusalem this week.

28 February 2019

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Categories: Afternoon Tea in Jerusalem, Blog, Business, Israel

Israel’s kibbutz movement, once considered a living success of socialism which then collapsed into an economic and ideological disaster, has more than revitalised itself.

I began to poke around on the subject when I read an article on the numbers of people living on kibbutzim. (“im” at the end of a word in Hebrew is a way to determine that the word is spelt in its plural version). In 1995, around 124,000 people had homes on a kibbutz. Within a decade, the number had dropped by nearly 10,000. By 2016, the figure had soared to 171,000.

There are currently 273 registered kibbutzim. Around half of them have housing problems. The thought is to build multistory buildings in these rural delights to resolve the issue.

There are many reasons for the renewed interest in a kibbutz way of life. I will concentrate here on the commercial aspect. The fact is that “Israeli Kibbutzim …. have invested NIS 110 million (approximately $29.9 million) in Israeli startups in 2018, a 45% rise compared with the year before.”

In other words, kibbutzim, which led an agricultural global revolution during the previous century, have finally embraced the concept of innovation and the start-up nation. (For the record, drip irrigation, small tomatoes, and many other inventions started off life in the Holy Land.)

And it is not just kibbutz funds that invest. A typical story is Zebra Medical, located on prime real estate on a kibbutz north of Tel Aviv. Its software reads CT scans and other medical reads with extreme accuracy. Over the next two years, the company will ensure that Israel will become the first country to be covered by medical imaging AI.

It is such technologies that are sought around the globe….along with the oranges, avocados and strawberries.

22 February 2019

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Categories: Afternoon Tea in Jerusalem, Blog, Business, Israel, Jerusalem

Hillel Fuld is one of the world’s top 10 tech bloggers. His latest post answering the question why is Israel still ‘the start up nation to follow’ is highly recommended viewing.

However, when it comes to entrepreneurship, Israel is not just about high-tech. Every Tuesday, you can find me at MATI’s office in southern Jerusalem. I spend up to five hours meeting with innovators. Nothing seemingly obvious links them together – neither age, religion, gender, nor even academic background. They all have a burning desire to…………

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And there’s the rub. I get to hear about everything from importing and exporting unique foods to an entertainment park to a medical centre to an innovative form of advertising, There is seemingly no end to the list. And the diary of full for next Tuesday.

MATI has promoted thousands of new businesses over the decades. It also has a special programme, via the Ministry of Absorption, to assist new immigrants. I have been associated with a multitude of projects in Jerusalem – special activities for children, art studios, high-tech, female empowerment, health centre, security services for Africa, etc, etc, etc. Again, I rarely cease to be amazed at the range of creativity.

This Thursday, in my capacity as business coach and mentor, I visited the Israel Center for Entrepreneurship (ICE). Located in the north west of Jerusalem, it is a ‘wework’ type environment for ultraorthodox Jews with high-tech projects. It opened its doors in August 2018 with a capacity of 120 spots. Six months later, the place is almost full.

Benyamin Claymen and Ya’akov Hudson have onboarded a fascinating array of start-ups. For example, I met with three engaged in various aspects of Fintech, each applying themselves to different markets; (USA, Latin America, and the UK). In parallel, I was introduced to associates engaged in social entrepreneurship, using tech to impact on individuals and communities.

What is especially encouraging was to observe the involvement of the Jerusalem Development Authority. Sitting down with their representatives and then enabling them to meet with teams on a one-on-one basis was singularly productive.

Hillel Fuld among others looks for a common theme. Is it that concept of the ‘drive to survive’? I am not sure. Other have pointed to government schemes and army background. The Mediterranean sun? Maybe.

In any event, Jerusalem is a city thriving with innovation and entrepreneurship. It is a thrill and joy to live daily.

19 February 2019

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Categories: Afternoon Tea in Jerusalem, Blog, Business, Israel, Palestinians

I have written many times about BDS, a global movement that aims to isolate Israel, economically and culturally.

Over the past few days, two well-known advocates of BDS unwittingly demonstrated the true moral force of their campaign. In the first item, Dutchmen Robert-Willem van Norren was spotted waving Palestinian flags and shouting slogans from his wheelchair as is his custom. One technical hitch; van Norren owns a special chair, “the Breeze S3 model of the Kalnoit brand, designed and assembled in Kibbutz Afikim in Israel’s Jordan Valley.”

A few days later, anti-Israel Member of Congress, Rashida Tlaib, was discovered to be utilising Israeli technology to operate her website. In fact, she and a whole load of other Israeli haters are using Wix technology, whose home base is none other than Tel Aviv.

As if to rub salt into a large septic wound, the Jerusalem Post newspaper ran an expose this week. Quoting Gaza’s Economic Ministry, it states that 65% of all items imported into the territory are Israeli made. No boycott there. No boycott anywhere. Just hatred.

And if you were to try to boycott? We know that for decades Intel computers are stuffed with tech emanating from the Holy Land. Manufacturers like Toyota are turning to Israeli tech in the race to develop for the first autonomous vehicle. And in the retail world, some of Decathlon’s and IKEA’s most profitable stores are to be found in Israel.

I suggest people check out the LinkedIn page of the British embassy in Israel. Posts in the past month have featured various forms of collaboration with the banks of Nat West and RBS, the NHS, the Welsh Government, and many more. I could go on, and at considerable length.

BDS supporters have spent much effort in the past few weeks trying to encourage performing artists to boycott Israel as the host of 2019 Eurovision Song Contest. (As one blogger has pointed out, they never complained when the competition was located in places like Turkey, who arguably has the worst record on human rights in Europe).

Speaking on British TV, Netta, the current Eurovision champ, made a very succinct point.

I believe in dialogue, I believe in protest. Boycotting is preventing light being spread but if you boycott light you spread darkness. Boycotts are not the answer!

……unless, of course, you are confined to a wheelchair or need to put up a website in a hurry!

7 February 2019

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The headline news in Israel these days floats between elections, the Prime Minister’s altercations with the legal system, and the customary threats of Hamas. Somewhere amongst all of this cloud and noise is a very vibrant economy.

The problem is how to find out what is going on and how to present that news effectively to investors. After all:

IVC has seen a number ‎of trends over 2018 which might continue into the beginning of 2019: the Israeli high-tech ‎market emerges as more attractive to foreign investors over the years, especially VC funds. ‎ Their numbers might grow, thereby driving first investments in Israeli startups, since quite a ‎few foreign VCs establish Israeli-dedicated funds. While the ‎majority of funds originate in the US and Asia, European VCs lag behind, as Israeli tech ‎companies are mostly USA market oriented.”‎

The software sector is the clear favorite in capital investments, it is even ‎more evident among VC funds, as first investment shares in this sector grew from 29% in ‎‎2013 to 54% in 2018. The cyber security technology vertical is leading globally, and Israeli ‎companies in this field will continue to attract due attention in raising capital through 2019.

Thus surmised Marianna Shapira, Research Manager at IVC Research Center and quoted on ATID-EDI’s biweekly survey of economic news in the Middle East.

Their review is one of the best I have seen. Just on Israeli life sciences, it detailed 18 separate items in its latest issue. I was also taken by its info on the cyber community in the Holy Land.

Israeli cybersecurity companies and startups raised over $1 billion equity investment in 117 funding rounds in 2018, setting a new record and marking a 47% increase from 2017, according to a new report on Israel’s cyber sector by Start-Up Nation Central (SNC). The total sum of $1.19 billion in investments constitutes nearly 20% of the overall cyber investments made worldwide in 2018, second only to the US, according to the report…..There were also significant initiatives and collaborations in the cybersecurity industry, including the establishment of a new $85 million fund by cybersecurity think tank and foundry Team8, backed by Walmart, Softbank, Scotiabank, Barclays, and Airbus, among others;

It is worth pointing out that Israel yet again has been recognised yet again by Bloomberg as one of the world leaders in innovation. Samsung investing another US$150 million in the local economy. And Freedom House has ranked the Israeli economy as really the only true free economy in the region.

So, as Europe sneezes loudly over Brexit and as America freezes while its President blows hot and cold, where would you consider is a warm safe haven to place a safe investment?

‎

1 February 2019

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Categories: Afternoon Tea in Jerusalem, Blog, Business, Israel

Last week, I described why multinationals are still flooding into Israel. Since then, we have learnt that Intel will sink a further US$10 billion investment into the Holy Land. As if that is not enough, it appears that S&P will affirm Israel’s credit rating at AA level. Amazing stuff!

Unemployment, although up slightly, is only 4.3%. The average wage is still on an upwards path in real terms. Inflation remains low, at below target levels. Economic growth hovers around 3%, even if 2019 may see a slight slow down.

All in all, very encouraging, except that……..

First of all, this is election year. You wonder who is in control, as the PM hits the campaign trail, and while he is spending overtime defending himself from anticipated charges of corruption.

And I also suspect that the economy has suffered from a subtle ’bout of election economics. What has the Finance Minister given away so that he can be seen as the good guy? Back in 2017, the budget deficit was 1.9% of GDP. Depending on whose version you believe, that figure has shot up to at least 2.9%, if not 3.6%.

To simplify that statement. The Israel government has to fund an extra deficit of 50 billion shekels or around US$13 billion. So, no accurate figures and whatever those number are, they are worse.

On the foreign trade front, Sver Ploscker, a leading journalist points out in today’s newspaper that when the current government was formed in 2015, Israel reported a positive trade balance of US$2 billion. While the final stats for 2018 are not yet in, exports have dropped by US$ 2 billion to US$62 billion. Imports are 30% higher at around US$80 billion. That trend is dangerous and certainly not sustainable.

I still maintain that some of the fundamentals of the Israeli economy are superbly strong. Great, but that should not blind us to some inner core problems that require immediate attention. What I do not see is a set of government ministers with the will, care and ability to do something.

31 January 2019

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Categories: Afternoon Tea in Jerusalem, Blog, Business, Israel

I consider myself a typical blogger. I enjoy writing, and like many other people, I try to ensure as wide an audience as possible. I do not have to hide the fact that blogging is an essential marketing tool as a business coach and mentor.

And the internet is awash with blogs telling you ‘how to do it’ – how to create traction with your potential audience. If I was to sum it up in a sentence: Present in an exciting manner, ensure that the subject matter is meaningful, and try to make the content come over as new material.

Simple enough. The truth is that few people succeed as well as they want to, but it does not stop them from trying afresh the following week.

Last week, I believe that I posted interested material on this feed, as well as via LinkedIn and on my commercial Facebook page as Business Ambassador. Meanwhile, on the domestic front, my brand new ironing board broke. Like the nursery rhyme, it was stuck half way up and half way down. What’s the connection?

I posted this sad news on my private page, attaching a suitably mournful picture. Aside from a couple of useful comments re how to complain to the place of purchase, my friends used the opportunity to poke some fun at me. It became a joke in over the dinner table with guests. Even some clients had seen it and commented when they walked in to my office.

However, after some inspired thinking, my youngest son fixed our prized possession. Naturally(?!?!), I had trained him. So, I posted again, this time with the picture of me and a fully operational ironing board. And here comes the punchline. I still looked absolutely morbid in the picture. (Yes, my children had a less complimentary description!)

The comments flooded in. And when I responded, my words only drew out yet more discussion.

Yes, this was new material – of a nature. It was reasonably well told. But meaningful? A man’s adventure with an ironing board is meaningful? Several people questioned why I still iron!

I suppose that the list of what you must do to become a successful blogger is missing one important ingredient. Way back in 1959, Stephen Sondheim wrote a song for the musical “Gypsy”. It was called ‘you’ve gotta get a gimmick’.

The anticipated picture should have shown me smiling. It did not. The picture encouraged people to think and then shout out. The audience was engaged.

Sounds silly? It had been intended, but I had not expected such a large number of posts back.

Postscript: A few minutes ago, I spoke to an Israeli client, a typical innovative SME I had helped them prepare their presentation for a multinational in the UK. He told me that what really won over the audience was his last line.

You see: I had assumed correctly that although his English is fine, his delivery comes over with an Israeli accent. He can sound dry. So, I trained him to sum up, then take a deep breath and like a good English politician say: “I commend this project to you”.

It was so unexpected: His audience was on the floor. The follow up is locked in for next month. (No, he did not take an ironing board with him, as well!)

25 January 2019

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Categories: Afternoon Tea in Jerusalem, Blog, Business, Israel, Jerusalem

It’s election time in Israel, always a dodgy period for any country’s economy. Financial markets look on anxiously. Bankers are concerned for long term growth traded off in return for short term political gains.

And yet this week, Israel was given a major vote of confidence from three separate and independent sources.

Let’s start with Ryanair, albeit not every travelers favourite low cost flier these days. However, it is still a key player in the travel market. It is been operating in Israel for just over three years, and CEO Michael O’Leary’ visit did not limit his praise for the results so far.

People are fed up with destinations like the Canary Islands and such places. Israel has wonderful beaches and very good food. If we can offer reasonable prices then Israel with its weather and beautiful beaches can become a preferred destination. We can bring millions more to Israel. We can grow as fast as the authorities allow us to.

In other words, if Ryanair is currently handling about 600,000 people a year in and out of the Holy Land, they are looking to treble that number at the very least.

Moving over to high-tech, Bloomberg paid Israel a massive compliment. It placed the country 5th (up from 10th) in its 2019 Innovation Table. By way of comparison, it was only slightly off from South Korea, Germany, Finland and Switzerland, who came in ahead. Israel was also light years ahead of the next Middle East country.

Third, but of equal importance was the new trade deal that the UK has announced that it intends to sign with Israel. As Westminster seeks to prepare for a post Brexit era, this news comes in addition to the new agreement between the two countries to reduce tax on investments.

UK-Israel bilateral trade reached a record $10 billion (£7 billion) in 2018. As one commentary noted:

A UK Government White Paper on trade in 2011 identified Israel as a trade priority for post-Brexit Britain because of the potential synergies between Israel’s high levels of innovation and British strengths in design, business growth and finance, as well as the UK’s own high-technology and scientific strengths.

Postscript:

Whilst I was writing this blog, I was told that the lower house of the Dail, the Parliament in Dublin, had passed a law boycotting Israeli products from the West Bank.

Does that mean they will boycott a plane, serviced by a person who lives in the West Bank? What about Intel products, worked on by people who live in that area? And as for all that potential trade that can create jobs…………..?

As Rachel Riley has argued, it is a pity for everyone, if not down right disgusting, that the majority Ireland’s elected politicians have chosen to be so selective (sic)!

22 January 2019

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Categories: Afternoon Tea in Jerusalem, Blog, Business, Israel

International Flavors & Fragrances Inc. has around 13,000 employers worldwide, servicing about 30,000 customers. It develops and produces flavor and fragrance essences and raw materials, which it supplies to the food, beverages, personal care, and household products industries.

So why has IFF poured US$7.1 billion into purchasing Frutarom, located in Haifa with 400 workers and a customer base of 1,000? And it is worth noting that this one of the largest acquisitions in Israel’s history.

The online interview with IFF chairman and CEO Andreas Fibig is very revealing and bare lessons for other multinationals. He makes the following points.

Fibig says that the acquired activity in Israel enables him to be exposed to many aspects of the economy and industry in Israel. “One aspect concerns the very good agritech and biotech sectors that exist here, which can help us in areas of innovation.”

Fibig noted that Frutarom’s excellent tech capability can now be exposed to a much larger customer base.

And when it came to investor relations, Fibig did not hold back.

…we now have good Israeli investors, and we really want to nurture our base of investors here. We also saw that it doesn’t require too much effort on our part to be listed in Israel, too, in addition to trading in our share in New York. It’s also not too expensive, and that’s another reason why we said that we’d leave the share here.
We also want to increase the share of the Israeli investors in the company, because there’s a good base here of money and good financing, and we can work with it.

And then Fibig touched on the core of the start up nation’s raison d’etre, entrepreneurship and innovation.

Frutarorm dared to enter additional areas of interest to us, such as active cosmetics, food protection, natural colors, and healthy ingredients, which had stronger dynamic growth than what we had achieved. Through the acquisition, we obtained exposure to complementary and growing fields of business.

For decades, geopolitical considerations have restricted Israel’s ability to attract overseas investment. In an MIT review earlier this month, Matthew Kalman noted that

More than 300 global technology companies operate in this tiny Mediterranean country—most of them within an hour’s drive of Tel Aviv. A trickle first led by IBM, Intel, Microsoft, Motorola, and Cisco has become a flood of marquee brands: at least 117 companies from 21 countries have opened Israeli R&D centers since 2014, hoping to capture some of the magic in the country’s bubbling ecosystem of more than 6,000 startups.

The IFF – Frutarom case study sums up this lightening change in Middle East commerce. Who’s next?

12 January 2019

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Categories: Afternoon Tea in Jerusalem, Blog, Business, Israel, Jerusalem

Israel, the start up nation: a record US$6.4 billion of investment poured into 623 start up deals in 2018. Foreign exchange reserves ended higher at the end of the year. And growth forecasts for 2019, even if they have been trimmed back recently, still remain at a comparatively healthy 3.1%.

However, what often counts in an economy are the micro figures. It is the combination of many small businesses, that when they are generally somehow managing to progress – stutter forward – together, then economies have a base from which to take off.

For example, in Israel, the Arab sector is gradually finding its way into the high-tech arena. In Jerusalem, ICE, a new co-working space opened up in August, catering for the specific needs of the ultra-orthodox community.

MATI, an NGO, which helps new businesses in the Jerusalem region, received 4, 530 inquiries during 2018. It prepared over 300 business plans and secured loans worth over US$12 million. (And I should disclose that I am proud to be one of the many business mentors who have been helping some of these entrepreneurs open up and develop their enterprises).

In the West Bank (settlements), the official population level reached 448,672 people. Nearly 13,000 joined the numbers in 2018, a slightly slower rate of growth than for the past decade. Naturally, this population change opens up some of the peripheral areas of the country.

For me, one of the most important stats revolves around the growing role of women in the domestic economy. I would not say that all is perfect. However, one new forum is training 2,500 orthodox women in computer sciences. And the employment level in the traditionally conservative female Arab sector has shot up to 40%.

What next in 2019? Who knows what will be the fall out from the general election in April and the probably multiple charges against the Prime Minister? In the global economy, China-USA trade wars and Brexit could have multiple repercussions.

It should be remembered that Israel survived the 2008 credit crunch better than most. The current state of its micro economy indicates that the underlying infrastructure is predominantly resilient.

6 January 2019

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Categories: Afternoon Tea in Jerusalem, Blog, Business, Israel, Jerusalem

In a statement today from Israel’s Minister of Tourism, Yariv Levin stated:

In 2018, we have reached an amazing and historic record with over 4.12 million tourists arriving in Israel. We have broken incoming tourism records and this achievement is the direct result of intensive work that we are doing at the Tourism Ministry. This achievement is a result of a revolutionary change in marketing strategy; infrastructure development; opening direct routes from new destinations and creating collaborations with some of the largest travel agents in the world. Incoming tourism makes a huge contribution to both Israel’s economy and its’ image.

His DG, Amir Halevi, added

This is the second consecutive record-breaking year in incoming tourism to Israel and this year we have crossed the threshold of 4 million tourists in a year…… We are optimistic about 2019 that begins with the opening of the new international airport at Timna, that will enable us to continue bringing new flights to Eilat. What was considered a fantasy a few years ago is today a reality

Not bad for a country with no natural borders to Europe or the USA. According to the Central Bureau of Statistics, revenue from tourism in 2018 reached about $5.8 billion (about NIS 22 billion).

Apparently, the top six source countries to Israel for incoming tourism are the United States (897,100), France (346,000), Russia (316,000), Germany (262,500), UK (217,900) and Italy (150,600). – those very countries most exposed to the campaigns to boycott Israel.

A statement from the ministry added:

In 2018, leading international market research firm EuroMonitor named Jerusalem as the fastest-growing tourism destination in the world…… In 2018, 61% of all tourists were Christian, 22% were Jews, 12.1% were not affiliated, 1.8% were Muslim, 0.6% were Buddhists, 0.5% were Hindus, and 0.1% were Bahais and 1.7% others.

Here’s to the success of 2019.

25 December 2018

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Categories: Afternoon Tea in Jerusalem, Blog, Business, Israel, Jerusalem

Tuesday morning, Christmas day. A bit chilly, but the sun is shinning. No snow in the Jerusalem hills and none down the road in Bethlehem.

Israel’s Central Bureau of Statistics has just released some figures re the Christian community in the Holy Land, arguably the sole place in the Middle East where the numbers are increasing. And I quote directly: –

Approximately 175,000 Christians live in Israel; they comprise about 2% of the State of Israel’s population.
77.7% of the Christians in Israel are Arab Christians.
In 2017, the Christian population grew by 2.2%, compared to 1.4% in the previous year.
The increase in growth resulted mostly from the immigration of 597 Falash Mura Christians from Ethiopia.
Most of the Christian Arabs reside in the northern part of Israel: 70.6% reside in the Northern District.
40.9% of the non-Arab Christians reside in the Tel Aviv and Central Districts; another 33.8% reside in the Northern and Haifa Districts.
The localities with the largest Arab Christian population were Nazareth (22,100), Haifa (15,800), Jerusalem (12,600), and Shefar’am (10,200), as of the end of 2017.
800 Christian couples married in Israel in 2016. The median age at the first marriage of Christian grooms in 2016 was 29.2, and that of Christian brides was 25.6.
In 2017, 2,504 infants were born to Christian women, about 75% of whom were born to Arab Christian women (1,877 infants).
Among all students studying toward a first degree, Christian Arabs were most highly represented in the following fields: public administration (14.2%), history of Israel (12.1%), and the multi-disciplinary humanities program (10.7%).
Women constituted 75.2% of Christians studying toward a second degree, compared to 62.7% among all students studying toward a second degree.
Compared to Arab Moslem students, the percentage of Arab Christian students studying education and teacher preparation was lower, and the percentage studying engineering, architecture, law, and medicine was higher.

The numbers are not large, but they are the follow up to a major act in the world’s history. Funny how the open roles of Christians in Israel, in Jerusalem, never seem to be reported with the honesty that they deserve.

Pages

The economics of Jerusalem: 4 points for the summer

Jerusalem – a global high-tech influence

The economics of Israel’s general election

Two of the saddest pictures of the Israeli general election

Israel’s economy – pre 2019 General Election

Keeping Israel’s election economy together

Palestinian economy – Israeli economy

International Women’s Day; an Israeli perspective

International investors conference in Jerusalem

The global reach of Israel’s Kibbutz movement

Israeli entrepreneurship – living it day by day

A call to boycott Israel, and its upturn

The strength of Israel’s economy: February 2019

Israel’s macro economy; smile or frown?

Israel’s economy. Starting 2019 with 3 key takeaways, and their significance

Here’s why conglomerates buy Israeli companies

The unknown numbers of Israel’s economy

How, and why, over 4 million people forgot to boycott Israel in 2018

Christian Christmas in Jerusalem, 2018

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