Can the Start-Up Nation be an incubator for Palestinian entrepreneurs?
The Times of Israel - DOV LIEBER - An initiative offers IT graduates in the West Bank internships in Jerusalem in multinational and Israeli companies
INTERNS FROM THE PALESTINIAN INTERNSHIP PROGRAM (PIP) DURING A VISIT TO THE MICROSOFT RESEARCH AND DEVELOPMENT CENTER IN HERZLIYA ON JULY 20, 2016 (CREDIT: AUTHORIZATION)
When 28-year-old Sari Taha began his training in mechanical engineering at Birzeit University in the West Bank city of Ramallah, he knew he would have to look for a job in Saudi Arabia or the United Arab Emirates four years later.
Taha could not find a job in the Gulf. Instead, he worked in a local construction company before finding a job for six months in Nigeria. Then he went back home to work in the restaurant business. Finally, he decided that he would go back to school and specialize in business at the Technion Institute in Haifa.
Sari's problems are part of the challenge of young Palestinians seeking to enter the technology market.
About 2,000 computer science graduates graduate from Palestinian universities every year, according to a report by Paltrade 2014. But there are not enough jobs for them in the West Bank, and according to the report, these graduates are not "sufficiently qualified" to work on the Palestinian market. The consequence is that most graduates have to look for jobs in the Gulf. And the competition is fierce there.
Four years later, Taha sold his shares of a start-up that he co-founded, he is now setting up the very first Palestinian technology park, which he hopes to turn into a Silicon Valley of the West Bank. The city of Rawabi - the first Palestinian city, planned before its construction, is presented as an example of what can be achieved in a future Palestinian state and should host the park.
The fate of Taha, a resident of East Jerusalem, has been altered through the Palestinian Internship Program (PIP), a USAID-funded initiative that has been in place for three years, which recruits Palestinian graduates in computer science and sends them to internships in multinationals and Israeli start-ups.
The goal? That these Palestinian trainees can acquire the necessary knowledge to start a successful and competitive start-up and bring their knowledge home to help build a Palestinian high-tech sector.
Without natural resources and control over their own borders, Palestinians hope that high technology can play a major role in their dilapidated economy. According to the World Bank, Palestinian gross domestic product (GDP) has declined since 2013, mainly due to the decline in foreign aid.
'An experience you can not find in the West Bank'
The PIP initiative was set up by Yadin Kauffman, an American immigrant to Israel who in 2011 co-founded Sadara (the Arabic word for "avant-garde"), the first venture capital firm targeting start-ups in the world. field of Palestinian technology.
PIP PRESIDENT AND FOUNDER YADIN KAUFFMAN, WHO IS ALSO THE CO-FOUNDER OF SADARA VENTURES / MIDDLE EAST VENTURE CAPITAL FUND, THE FIRST FUND INVESTING IN PALESTINIAN TECHNOLOGY COMPANIES (CREDIT: AUTHORIZATION)
The $ 30 million investment fund raised by Sadara, which is backed by leading investors, including George Soros, AOL founder Steve Case, and former eBay chairman Jeff Skoll, as well as Google, Cisco and the European Investment Bank, have supported six Palestinian companies, three of which are start-ups.
But Kauffman's PIP initiative, which began offering the first internships in the summer of 2014, aims to provide the Palestinian technology sector with another type of capital: experience.
"I saw during my work in investing in Palestinian companies that there were many talented young graduates from Palestinian universities who had no opportunity to work and gain experience in a job. big tech company, "Kauffman said in an interview with the Times of Israel .
"It's something that's important for the professional development of these young graduates."
Kauffman, who participated in the Israeli technology boom in the 1980s as an investor, compared Palestinian internships in Israel with the valuable experience the Israelis had in Silicon Valley.
PIP internships are paid three-month internships, complemented by workshops, corporate tours, networking events and mentoring. Kauffman admits that there is a limit to what can be learned in such a short time."But," he added, "at least they can see what an important business looks like."
Nadine Handal, a student who participated in the East Jerusalem PIP and who did software development during an internship at Intel, said the program offered a "unique experience ... different from the one you can find in West Bank.
"The PIP is trying to put you in an environment with professionals who have great experience in the industry and who have exposure in the global markets. I wanted to have that kind of experience, "she added.
After completing her internship, the student from East Jerusalem was hired by Intel and worked there for a few years.
After leaving his job in Israel, Handal, who studied computer engineering in the West Bank, is currently studying data analysis in the United States.His goal is to open his own Palestinian data analysis company.
"I hope to be one of the people who will bring this new knowledge to my community and to the Palestinian IT sector," she said.
"This can offer employment opportunities to a large number of young Palestinian talents who are looking for opportunities. They will learn about a new and growing field and become familiar with the progress of technology around the world. "
The unemployment rate in the Palestinian Territories at the end of 2016 was 27% (18% in the West Bank and 42% in Gaza) and job creation has not kept pace with the growth of the labor force , according to the World Bank.
Handal said the PIP business seminars, where the best teachers, including Harvard and Brown, trained entrepreneurship trainees, had been very helpful.
"I found them very important to me, especially because I come from a technical background with little knowledge of business and management," she said.
A win-win relationship, strictly commercial
PIP, which has been incorporated into the United States and receives funding from USAID, is intentionally apolitical. It's all about business.
But the PIP founder claims that Palestinians and Israelis - if political extremists are eliminated on both sides - will be welcome.
"Almost everyone agrees that it is in Israel's interest to have a Palestinian economy that develops, is able to employ people and succeed. Most people here [in Israel], right and left, understand that it is not in our interest to have unemployment or brain drain, "said Kauffman.
Jesse Divon, 31, from England, has been commissioned by Kauffman to manage the PIP program.
INTERNS FROM THE PALESTINIAN INTERNSHIP PROGRAM (PIP) DURING A VISIT TO THE MICROSOFT RESEARCH AND DEVELOPMENT CENTER IN HERZLIYA ON JULY 20, 2016 (CREDIT: AUTHORIZATION)INTERNS FROM THE PALESTINIAN INTERNSHIP PROGRAM (PIP) DURING A VISIT TO THE MICROSOFT RESEARCH AND DEVELOPMENT CENTER IN HERZLIYA ON JULY 20, 2016 (CREDIT: AUTHORIZATION)
"The PIP does all the basic work for the host companies - recruitment, selection, licensing, hosting near the company, signing contracts, and so on. The host societies have only to pass the interviews to the candidates proposed by the PIP and - if it sticks - they begin to work ".
Divon said that although the logistics of bringing Palestinians from the West Bank into Israel are not simple, the Israeli Civil Administration and the military body responsible for Palestinian civil affairs have been "cooperative" in issuing permits for trainees for the duration of their stay in Israel.
The approval process for PIP trainees is "very selective," according to Divon. Only those who show real potential for achieving the PIP goal - that is, boosting the Palestinian hi-tech sector - are supported. So far, there have been 30 trainees selected by the PIP. In the last round of selection for internships that began in early 2017, Divon estimates that only about 10 to 15 percent of candidates will get an internship in a company.
So far, more than a third of trainees have continued working in their host society after the end of the internship, which is, according to Divon, a figure "particularly high given the logistical obstacles", has it? -he declares.
"On the corporate side, it's often surprising how much they benefit from participating in the program. Trainees often exceed expectations, while companies also see an opportunity to increase employee diversity and engage with corporate responsibility, "said Divon.
The Palestinian high-tech sector consists largely of outsourcing companies or copies of existing businesses adapted to the Arabic language market. For example, the first Palestinian start-up is Yamsafer, which is essentially the Arab world version of bookings.com.
To date, no Palestinian technology company has been acquired by a larger company or a multinational. If only a Palestinian company were acquired, said Kauffman, it would inspire other Palestinian entrepreneurs to try to get into the path of start-up and create momentum.
The "universal language" of technology
Taha, the mechanical engineer who could not find a decent job after college, was hired in August by Rawabi developer, Palestinian businessman Bashar al-Masri, to join a team. to create a technological hub in the new Palestinian city.
The technological hub, still in the planning phase, could prove crucial for the Palestinian high-tech sector, and if all goes as planned, according to Taha, it can also be a boon for Israel's high-tech sector .
"The high tech and computer technology sector is one of the few options we have to create jobs and grow the economy so that the state is no longer as dependent on foreign aid as it is today. today, "said Taha.
In 2005, the high-tech sector accounted for less than 1% of Palestinian GDP. In 2008, after investing $ 15 million to create three major outsourcing companies in the West Bank, the sector reached nearly 7 percent of GDP, employing some 5,000 people, according to a 2014 Paltrade report.
The Palestinian economy relies heavily on foreign aid and nearly a quarter of the workforce is employed by the Palestinian Authority, according to a 2014 World Bank report.
"What we hope to do at Rawabi's technology cluster is to convince Palestinian high-tech companies to move here and try to integrate small multinationals to open operations in Palestine. This would increase the quality and competitiveness of local talent, "said Taha.
Taha's ability to take responsibility for the creation of Rawabi's technology cluster is inextricably linked to his experience with the PIP, he said.
He did his internship at Takwin Labs, a Haifa-based venture capital fund that works specifically with high-tech Arab-Israeli companies. After his internship, he was hired to work at Takwin part time.
Within the Israeli company, he has conducted market research, due diligence, participated in business development and financial budgeting while working on his own technology start-up: a company producing renewable batteries in the United States. zinc that could provide energy to developing countries.
Taha sees Rawabi's technology cluster as a future natural partner with Israeli research and development centers.
"If they could outsource to the Palestinian sector, it will be better and it will avoid the hassle," he said of Israeli high-tech companies, some of which continue to outsource jobs in places such as Israel. India and Ukraine. Israel faces a shortage of engineers and skilled workers and seeks to exploit new sources of workers, including women, Arab and ultra-Orthodox populations who have been overlooked by the high-tech boom.
"Palestine is closer in terms of time zone and culture. You can organize meetings between teams. In this generation, technology people all speak the same language. It's universal, "he said.
Large multinationals in Israel, including Cisco, Microsoft, HP and Intel, are already outsourcing to Palestinian companies in the West Bank. Since 2010, the Israeli company Mellanox Technologies has outsourced programming jobs to Palestinians in the West Bank.
Required: just someone with a laptop
Dr. Paul Rivlin, Researcher at the Moshe Dayan Center and Editor-in-Chief of Iqtisadi, a monthly publication on the Middle East Economy (Credit: Authorization)
DR. PAUL RIVLIN, RESEARCHER AT THE MOSHE DAYAN CENTER AND EDITOR-IN-CHIEF OF IQTISADI, A MONTHLY PUBLICATION ON THE MIDDLE EAST ECONOMY (CREDIT: AUTHORIZATION)
The still untapped workforce of skilled workers bodes well for the Palestinian high-tech market, "said Dr. Paul Rivlin, a researcher at the Moshe Dayan Center and the editor-in-chief of Iqtisadi, a monthly publication on the economy of the Middle East.
"Given the fact that there is an educated and skilled population, we can be optimistic about the potential of the Palestinian high-tech sector," he said, particularly in technologies based on the Arabic language.
"The [Palestinian] market is very small, but size is not everything and is not related to high technology. You do not need a factory. You need a guy with a laptop, "he added.
Israeli restrictions make it more difficult for Palestinian entrepreneurs who have difficulty traveling abroad or to invite others to visit, which reduces their ability to "build trust" with donors or potential colleagues.
The Palestinian Authority's business market is also often hampered by the need to know the "right person", he added, which makes it more difficult to run a business.
But given all this, Rivlin said, Palestinians can see Israel as an example of a high-tech market that can overcome challenges because the country is both small and conflict-ridden.
"Look at Israel. The context is not ideal for success, "he said. "Yet with constant conflict, both inside and out, the economy has prospered tremendously."
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