Earlier this month, I interviewed Yossi Vardi at AIPAC’s policy conference in Washington, DC. The avuncular high-tech guru spent much of our 27 public minutes trying, and I suspect failing, to persuade 14,000 people that he was an intellectual lightweight and profound disappointment to his late mother.

Amid the plentiful humor and self-deprecation, however, there was also inspiration. Vardi — who was director general of Israeli government ministries when in his late 20s, was involved in peace negotiations with both Egypt and Jordan, and who has invested in the pioneering Internet messaging service ICQ (started by his son and a group of friends) and dozens of other trailblazing high-tech companies with spectacular success — hailed what he said were unique aspects of the Israeli character. The capacity to defy the odds, to improvise, to work relentlessly for success, and other such qualities weren’t just central to Israel’s flourishing as a start-up nation, but to Israel surviving and thriving as a viable state, he argued. “The whole history of Israel is one great, long start-up,” he said. “It’s embedded in the Israeli psyche.”

Back in Israel, I wanted to explore some of the themes he introduced in our DC interview in more detail. So I met up with Vardi again, in Jerusalem on Tuesday, to talk some more about the challenges facing Israel within and without, and to hear about what’s most exciting him in the dizzyingly fast-changing world of innovation. Excerpts:

David Horovitz: What should Israel be doing next? You’ve said this country was a start-up nation from the beginning — confronting impossible odds, innovating, improvising.

Yossi Vardi: Look at what we built here, in science, agriculture… The strongest and the weakest point is wrapped up in one word: solidarity. This country in some aspects has solidarity, adherence to a cause, people believing in a cause, at a level that you don’t see in any other society. This is manifested in many things. Take the [Second] Lebanon War [in 2006], where 700,000 people had to leave the border area because of the rockets. Nobody slept in a park. Everybody was welcomed to somebody’s home; people they didn’t know, friends of friends. When there’s a big accident, people tend to run and help. When there is a war, Israelis besiege Heathrow and Kennedy, trying to get on planes home. Returning, rather than running away. And when a company has to release a product, everyone will stay until 2, 3, 4 in the morning because all of the staff feel they are in a battle against the competition.

This is the nice aspect of solidarity, which I think is the key to many of the positive things you see. At the same time, Israeli society is broken into pieces. Too many people are not being embraced or included. Everyone focuses on the ultra-Orthodox and the Israeli Arabs, but it’s not only them. The economically challenged — this is the laundered way to say poor people — to a great extent they’re being left to their own destiny. Yesh Atid is looking after the middle class. Who is looking after the poor? Labor will say they fly that flag. But the level of solidarity has to be increased. Jews through the ages always fought with each other, over whether the mikve should be three feet wide or three and a half feet. But when the Cossacks came, everybody united. Until the Cossacks went away.

So what’s next for Israel? To embrace those parts of society that are less fortunate. I read somewhere that this year there was a 73 percent increase in first grade registration among the ultra-Orthodox and a 7 percent increase for secular students. The structure of society is changing and we have to integrate these people, give them opportunity and make them productive.

How do you do that in a high-tech economy?

The tectonic plates are shifting, slightly. We see the young generation of ultra-Orthodox studying English and mathematics on their own, trying to get into high-tech. We see there is much more tolerance for Arab Israelis. Still, their share of the industry is much less than their proportion of society. The Technion today has 20 percent Arab students, which is their proportion of society, without any affirmative action. It also has programs for the ultra-Orthodox.

You were a major instigator of Breaking the Impasse (a business-led Israeli-Palestinian push for peace). Where could we be smarter on the Israeli-Palestinian front? And where do you see right and wrong in the context of international pressure on Israel, and regarding boycotts?

I believe peace should be done not because of boycotts. That’s not the issue. Peace should be done because, in my book, occupation is not the solution. It’s not the solution and it holds us back in many ways.

‘The cheapest commodity in this area is blood’

Regarding Breaking the Impasse, we are about 200 [business leaders]. Everybody has a different view of what should be done. We saw that people came with all kinds of peace programs: Jerusalem should be divided. It shouldn’t be divided. Divided into two, into three. All these plans went one way — down the drain. The 200 people agreed on three principles:

1. The solution is a two-state solution. A one-state option is not a solution. It’s a problem. It brings Israel and Israeli society to places we don’t want to be.

2. Negotiations should be done by the leaders. So all the BTI people are supporting negotiations between [Prime Minister Benjamin] Netanyahu and [Palestinian Authority President Mahmoud] Abbas. Whatever they agree to, we’ll subscribe to it.

3. We don’t want to be the silent majority. We have a voice and we are using it. Many of us believe that this initiative of [Secretary of State John] Kerry, maybe it’s the last chance to get peace. Or if it doesn’t happen now, it may be postponed for too long, so we are trying to help them to promote it. Whether Kerry, Netanyahu and Abbas will succeed or not, I really don’t know. I know that in the last few years we didn’t have terror from the Palestinian areas. We had from Gaza but not from the area where Abbas is in control. And I hope if we have peace that will continue.

That is the full manifesto of BTI. Very simple, very short, very clear.

Now I’m going to give you my view. Personally, I agree with Netanyahu that security should be very well taken care of. If that doesn’t happen, the peace will not be sustainable. If aggression will continue, the peace will not sustain. So this is a component I personally think is important, but what do I know about politics? I’m just an aspiring businessman.

As you know, The Times of Israel now appears in Arabic too. Is there something you would like to say to people who will be reading this article in Arabic?

Arabic, Chinese, Yiddish, it’s the same thing. Most of the people in Israel and Palestine want the same thing. They want a future for their kids. They want peace. They want dignity. They want self-fulfillment. I am friendly with many. It’s a tragedy that we haven’t put an end to these 120 years of bloodshed in this part of the world. The cheapest commodity in this area is blood. It should end.

The more skeptical Israeli response to some of what you’ve said is that we want to reach out to them and to work with them but we have been battered and bloodied. The partnership is not there.

People have the right to be skeptical — both Israelis, according to the Israeli narrative, and Palestinians, according to the Palestinian narrative. But nobody has the right to be cynical. There’s a big difference. Sure, people can be skeptical, but being skeptical is not a reason not to try. Maybe because you’re skeptical you have to try more.

But tell me something tangible. What have you seen that encourages you?

I’ve seen [Egypt's president Anwar] Sadat coming to the Knesset and the Israeli chief of staff of the day saying ‘this is a trap.’ He said, ‘be careful.’ Sadat came and gave a very moving speech and I still get goose bumps at the back of my neck when I think of it. We achieved peace with Egypt. At that time I was director general of the Ministry of Energy. I prepared the oil agreements. We gave the Egyptians tons of oil. There was a lot of concern about our losing our energy independence.

What is the end result? The end result is that there was peace with Egypt. People say it was a cold peace, but no single Israeli kid was killed and not a single Egyptian kid was killed by the other army [in war since 1973] and no mothers on either side had to shed tears. This is something very big. What is the total number of casualties? (Israel counts more than 25,000 dead in wars and acts of terror.) There is not a family here that didn’t pay a very dear price because of the conflicts, so people were skeptical. Peace with Jordan, the same story. I participated in the negotiations with Jordan and before the negotiations with Jordan There were all the same criticisms — that Jordan has toxic propaganda in its textbooks against Israel. And we have peace with them. This peace is extremely important for both countries.

I agree that with the Palestinians it’s much more complicated, but we have to try. It’s been almost 50 years since ’67 [when Israel captured the territories]. It’s not good — not for us, not for them.

As for the world, the world doesn’t like it? Okay. The world didn’t like many things that happened in the past. But it is a big blow from a financial point of view, from a moral point of view, from an international relations point of view. I think we should bring it to an end, and so do all my friends.

Again, the skeptical view would highlight that toxic atmosphere, that there is no love for Israel, to put it mildly.

Yes, but see, [president Hosni] Mubarak was kicked out in Egypt. People who were much more radical took over and they didn’t cancel the peace agreement. Then more moderate people came. Look who’s now controlling the border between Egypt and Gaza. It’s not us.

There are a lot of changes in the Middle East. Many countries begin to have more and more aligned interests, similar to ours. This is a great period of change and I think a great time to try to embark on some new policies. But this is above my head, because I am not a geo-politician. There are people who are much more versed than me, but if we’re not going to try it, then we are doomed to continue like this. I know I didn’t convince you, but…

What if you try it and it turns out to be a disaster?

It will be very bad.

But you don’t think that’s going to happen? Or rather you’re saying that it’s for the politicians to negotiate it?

Yes.

Let’s change tack. Are there specific new business areas where there are things that are thrilling you at the moment? Areas where you are particularly excited?

‘Your car will be connected to the Internet. Your washing machine, your kettle’

These are very exciting times because you see so many changes in technology. (Vardi takes out his phone.) You just take this little thing. All of a sudden you produce pieces of equipment in the hundreds of millions that enable you to reduce costs to a level where you can create applications which 15 years ago cost $20,000 and today cost a few dollars. Look at the GSM chipset. Fifteen years ago if you wanted to put GSM on your boat, you had to pay $20,000. Today it’s nothing.

You’re going to see a lot of health applications coming onto this machine. A lot of vision applications coming onto portable devices. You’re going to have the Internet of things — connecting not people, but devices, to the Internet. Today there are three or four billion people connected to the Internet in two ways, via computers or via telephones. But your car will be connected to the Internet. Your washing machine, your kettle, your wine bottle, everything will be connected to the Internet and you’ll be able to create applications that will make your life more productive. Television is going to be completely changed. It’s going to become another social device like your phone.

And Israel is in the midst of all of this. It’s amazing what’s going on in this country in this respect — the energy, the ideas.

Explain to me what you mean about television?

The way people are using television today is totally different from 10 years ago. They sit in front of the television and they tweet to their friends as they watch what’s going on. Forty percent of the traffic on Twitter at the time of [popular] shows relates to those shows. You will be able to share, you will be able to communicate, while you’re watching TV.

And the Internet of things, with my car connected to the Internet? Therefore what? How does that help me?

It provides you with anything you have on your desktop or in your phone or in your living room. You will have much better entertainment. You will have much better navigation. You will have much better communication. It will learn the patterns of your behavior. You have applications today that take your emails and take all the itineraries and convert them to alert systems, so life is becoming much more organized. Spending time in cars — for some people it’s an hour or two or three a day — they’ll be able to manage their time and what they’re doing in a much better way.

Look at the revolution that Waze made. What you see at Waze today is only the beginning. Waze is making the whole city [road] network much more efficient because it always sends cars to the routes which are less full, balancing the overall traffic system.

And the health and vision apps?

An example: There’s an Israeli company called OrCam. They created a system for people who have problems seeing. It’s a little video camera connected to a computer which you carry and you point at an object. It sees which object you’re pointing at, and understands what you want to know about the object. So if you point at a book or a magazine or a newspaper, for instance, it begins to read the article. If you’re at a bus stop and you point at an approaching bus, it will tell you the number of the bus. If you train the system that ‘this is David Horovitz’ and later point at David Horovitz, it will do the identification. They just released a beta version and there’s a really high demand from people who are visually challenged. This was developed here in Jerusalem by a bunch of young guys.

The amount of talent here, combined with the willingness of people to go and risk years just to try and do it, is really quite amazing. And if you ask me why that is, I will refer you to our interview at AIPAC.