Though Israel is located geographically within the Middle East, a range of political and social hurdles has led movers and shakers in the startup nation to ignore their own region in the hunt for markets.
Seeking to change this trend, two MBA students at the Tel Aviv University on Sunday launched the Middle East Business Forum, with the stated goal of “raising awareness and facilitating networking,” allowing businessmen trained in Israel to seek opportunities in neighboring countries.
The launch event for the forum, which took place at the university with the help of the Whitman Family Center for Coexistence, was attended by around 50 students and faculty members.
The highlight of the event was a talk by Yadin Kaufmann, an American immigrant to Israel who in 2011 co-founded Sadara (Arabic for “forefront”), the first venture capital firm to target Palestinian tech startups.
Sadara amassed $30 million in two and a half years despite having started to collect funds at the peak of the global financial crisis in the summer of 2008. It is backed by first-rate investors, including billionaires George Soros, AOL founder Steve Case, and former eBay president Jeff Skoll, as well as Google, Cisco and the European Investment Bank. The firm has so far invested in six Palestinian tech companies, and has been essential to the growth of the small Palestinian tech market that presently exists.
Kaufman, whose confounding partner is Palestinian-American Saed Nashef, relayed to the crowd that he hoped to take what he learned by being involved in the early stages of Israel’s tech boom in the late 1980s and early 1990s, and try to replicate the model for the Palestinians.
“It’s about business and making money for our investors,” Kaufmann said of Sadara. But there is also the added bonus of helping create a thriving high-tech market in the Palestinian Authority, which will provide both Palestinians and Israelis with more stability, he argued.
“It doesn’t do any of us living here [in Israel] any good to have high unemployment, no GDP growth and despair. We are much better if people there [in the PA] are better off,” he said.
Kaufmann added that such a notion “is pretty much accepted, almost irrespective of your political views.” He noted both Prime Minister Benjamin Netanyahu and Defense Minister Avigdor Liberman have spoken about the security benefits of improving the Palestinian economy.
Speaking about business in the larger Arab world, Kaufmann said that because the region “isn’t first on anyone’s list” in Europe or America, it leaves room for local entrepreneurship to enter the market.
(Kaufmann first told his story to a TEDX conference in Rome, March 2014.)
This is the fertile regional market the two founders of the Middle East Business Forum, Jowan Qupty, 26, who is from Jerusalem, and Jesse Divon, 31, originally from England, hope to take advantage of.
The two met while attending the international MBA program at Tel Aviv University. Divon also leads Kaufmann’s initiative to find Palestinians internships in Israeli tech companies.
“We started talking and realized there is no club that deals with business in the Middle East,” Qupty, who was once on Israel’s national swimming team, told The Times of Israel.
He said the university “loved” the idea, and the duo has met with heads of “big international corporations” in Israel who are interested in helping out.
Activities for the forum will include visits to companies, factories and industrial zones to see firsthand where Israeli-Arab business cooperation takes place.
The business-meets-coexistence spirit of Kaufmann’s Sadara is the type of example Qupty said he hopes his initiative follows.
But some who spoke to The Times of Israel at the launching event expressed skepticism, pointing to political hurdles facing the new academic forum and joint Israeli-Arab business ventures in general.
“I think we didn’t talk about the big elephant in the room: that most of the Arabs can’t do business with us,” said Ami Marom, 40, a masters student at the security and diplomacy program.
Israel does not have open diplomatic relations with any Arab countries outside of Egypt and Jordan, and the populations of even those two neighboring countries are generally hostile to business cooperation with Israel.
Marom, who said he is “planning different avenues to facilitate more relations between Israelis and Arabs, through business or other ventures,” noted that despite political challenges, there are already Israeli businessmen making deals across the Arab world, notably in the Gulf.
But, he wondered, “If the volume of business becomes too big, or the relations become too public, there could be a backlash from the anti-normalization people.” Anti-normalization refers to those who oppose varied levels of relations with Israel since, they argue, it legitimizes Israel’s 50-year military occupation of the West Bank.
Responding to the so-called elephant in the room, Divon said, “No one is denying there is a political element here.”
“But it’s not the focus. There are enough forums where that is being talked about already. It doesn’t need to be here. We’re not denying the social and political context, but we’re here to talk business,” he concluded.
Mais Ershied, studying for her BA in business, told The Times of Israel the flyers advertising a lecture about Palestinian business drew her to the event.
“I’m really interested in anything that would improve the Palestinian economy, inside or outside of what is known as Israel,” said the native Jerusalemite.
The lecture, she concluded, “drove me to really want to finish my degree and get moving to make the Palestinian economy better.”