Building High-Tech Success Stories in Palestine
Author: Tali Heruti-Sover Posted February 22, 2013
In recent years, the Palestinian high-tech industry has experienced a boom that is hard to ignore. While two years ago, there were 112 high-tech companies in the West Bank, their number has grown since and these days stands at 146 and counting. A few of these companies are technology start-ups developing their own unique products, whereas most of them are developing various applications and providing services for large high-tech companies on an outsourcing basis.
The remarkably fast growth in this sphere is attributable, above all, to changing trends in Palestinian society. The younger and more sophisticated generation is not interested in agriculture, tourism or the stone industry, the major growth engines of the Palestinian economy in recent decades. Instead, they seek professional careers in modern, attractive and lucrative labor markets. Thus, every year no fewer than 2,000 graduates of Palestinian and other universities in the region – educated as engineers, hardware and software developers, quality assurance professionals, Internet experts and others — enter the labor market. They are all looking for work. Some find their place in existing companies, while the more enterprising among them set up independent companies of their own. Is the market large enough to accommodate all of them? Not necessarily.
Seven years ago, Saed Hasan, a 38-year-old entrepreneur, established a services and application development company named SADA. The company, located in Ramallah, currently has a staff of 12. Hasan himself is an electronics engineer who acquired his education and academic degree at the University of Jordan. Following graduation, he worked in a series of local information technology companies until he decided it was time to go independent and became his own boss, “to make a change in this field, and also, to make some money,” he said.
SADA has a number of major customers, among them Ericsson Jordan, as well as some Palestinian cellular companies. “However,” Hasan admits, “we could do much more than that.” He dreams of expanding into Israel of all places. “We are neighbors,” he said. “We live next to each other. You need our services, and we can provide them.”
Hasan knows what he is talking about. Israeli high-tech companies are desperately looking to hire highly qualified but cheap workers and thus, quite often they turn to eastern Europe or India to get the services they need. In recent years, Cisco Israel has been vigorously working to further cooperation between Palestinian and Israeli companies. At times, it succeeds in its endeavor; an apt case in point is the Israeli company Mellanox Technologies, which works with quite a few Palestinians, not to mention Cisco itself. However, commercial ties between Israeli and Palestinian companies are still rather fragile. Politics prevails over business too, and given the political stalemate, close collaboration is hard to achieve.
Saed Hasan hopes that the situation will change one day. He believes it may happen once Israeli leaders realize that “erecting barriers cannot solve the problem. Under the present circumstances, the solution of two states for two peoples seems to be dying. In the end, we will apparently have to live together, so we better start taking steps that will allow us to know each other.”
Until the dream of peace comes true and Israeli and Palestinian high-tech companies work in harmony side by side, Palestinians are busy looking for other markets — “It is not that simple competing in Jordan or the Gulf states,” Hasan noted — and attempting to close gaps in those areas where they lag behind.
“It is a problem encountered by every entrepreneur,” explained Ghassan al-Jamal from the United States Agency for International Development (USAID), which is helping develop the Palestinian economy. “Entrepreneurs are professionals by nature. They may be, for instance, engineers who are familiar with the product to be developed, but more often than not, they have not studied management. They usually have no idea about such areas as marketing, finance, or even recruiting and cultivating personnel. To render the high-tech industry a significant growth engine of the Palestinian economy, we need to have entrepreneurs with managerial skills as well. And who could coach them better than our Israeli neighbors, who have already established a cutting-edge high-tech industry and who are in possession of all the tools, both academic and practical, required to that end?”
Learning from the experts in Israel
With the view of realizing this idea of knowledge sharing, USAID appealed to LAHAV, the body in charge of overseeing various extracurricular executive programs within the framework of the Faculty of Management at Tel Aviv University. At LAHAV, they picked up the gauntlet, and together with the prestigious Kellogg-Recanati International Executive MBA Program (IEMBA), formed a mini-MBA program, or as it is officially called, the Executive Development Program for Palestinian Business Leaders, a joint program of the Kellogg School of Management at Tel Aviv University and the Compete Project.
This unique program, which is currently in progress, lasts three months and includes classes in areas such as leadership and team management, competitive business strategy, financial management and financial reports, business entrepreneurship, marketing of technology products and penetration of international markets, company amelioration and operational aspects of service organizations, strategic innovation, and more. In addition, during the course of the program numerous meetings are arranged with high-tech executives and entrepreneurs, who share their personal experiences with the Palestinian participants.
The 35 program participants (from Ramallah, Nablus and Jenin) were carefully selected from among 150 applicants who applied to USAID. Studies are held for two and a half days (Wednesday, Thursday and half of Friday) once every two weeks, and so far the responses have been enthusiastic. “The program offers a great opportunity for person development and for learning from other sources, who have already accomplished success,” said Carmen Salqan from Ramallah. She is only 22 years old and already works as a customer service manager in a Palestinian telecommunications company. Salqan studied business administration at Birzeit University. “However, classes here are quite different, as they are speaking from experience in Israel,” she said.
“I have respect for the Palestinian businessmen, but my role model is none other than Bill Gates,” Salqan said. She then explained, “We are still a small economy that is under a lot of pressure and that is still operating in many cases in traditional ways. Thus, for instance, the field of human resources is practically overlooked. The workers arrive at their workplace, do their work, receive their pay and that’s it. No one thinks about cultivating or preserving the personnel. We are not talking in terms of leadership or global thinking. This program exposes us to concepts and ideas we would not have heard of otherwise.”
Saed Hasan enjoys in particular the meetings with the Israeli entrepreneurs. “As an entrepreneur myself, I am especially interested in talking with entrepreneurs who have made it,” he said. “It is highly instructive to hear from people in our sphere of activity what is and what is not worthwhile doing. There are a lot of successful Israeli entrepreneurs in the high-tech industry. However, we Palestinians still don’t have role models from whom to learn.”
So why not take the full program?
Saed Hasan: “Actually, I was very much interested, and I was even accepted, but I was denied the required military permit [to cross the border], although I have never been involved in any political activity whatsoever. It is the first time I got [a permit] and naturally, I jumped at the opportunity.”
Has no one discussed with you the “contribution” toward normalization of your studies in Tel Aviv?
Carmen Salqan: “Absolutely not. Knowledge is important, and I would go anywhere, even to China, to acquire it. If we want to develop, we need to learn from whoever is willing to teach us.”
Saed Hasan: “My immediate circle has been very supportive and welcomed the news when I was accepted. It is impossible to make progress and to advance the Palestinian economy without learning — preferably from the experts. You have great experts here, so why not learn from them?”
“It may sound strange to you, but for some of the executives who take part in the program, it is their first time in Tel Aviv,” noted al-Jamal.
In LAHAV, too, they are pleased with the new program and hope that the first class will be followed by many others.
''They are talking a lot in Israeli society about the need for a dialogue – between political right and left, between the ultra-Orthodox and the non-religious, between Israelis and Palestinians,” said LAHAV CEO Udi Aharoni. “Dialogue and communication are indeed the basis for establishing cooperation and reaching understandings between the parties concerned. The economic aspect, that is, the need to increase corporate value and secure economic success, is the common goal of each and every manager, whether Israeli, Palestinian or American. The collaboration in the [IEMBA] program is a unique breakthrough. We hope that additional programs will be subsequently held, as such business and academic meetings are clearly creating a bridge for an even more significant dialogue on issues that are not necessarily related to the areas of study, but which provide a basis for further collaboration.”
While the program is unanimously acclaimed, the complaints by its participants about the difficulties they encounter on their way to Tel Aviv cannot go unmentioned. “We have to leave Ramallah at half past six in the morning to get to Tel Aviv at half past nine,” said Saed Hasan. “We all have permits that USAID obtained on our behalf, but we are forced to wait at the checkpoints, sometimes for hours on end, along with hundreds of laborers entering Israel to work. Once, we had to get off the bus midway and walk in the pouring rain half a kilometer [about a third of a mile] to the next checkpoint.
“Other passengers — executives holding a blue identity card [issued to Palestinians residing in East Jerusalem] — remain on the bus, eating and napping, while we have to undergo security checks. At the same time, we see the settlers freely passing by in their cars. I am aware of the necessity of security checks, but it can be done in any number of other ways.”
If you have to leave at 6:30 in the morning, when do those who live in Nablus or Jenin have to set out on their way to Tel Aviv?
Al-Jamal: “They get up at 4:30 in the morning to catch the bus from Ramallah, and they return home around 10:00 at night, having to pass once again through a series of barriers and checkpoints. The way to Tel Aviv and then back home is far from being easy. It just goes to show how resolved to succeed and how dedicated to the mission they are.”
Name of the program: The Executive Development Program for Palestinian Business Leaders, a joint program of the Kellogg School of Management at Tel Aviv University and the Compete Project
Cost: $1,000 per participant, plus $4,000 per participant subsidized by USAID
Number of students: 35
Selected from among: 150 applicants
Participant profile: Young entrepreneurs and executives active in the high-tech and media industries in the West Bank — the next-generation executive cadre of Palestinian economy
Program graduation requirements: At the end of the program, graduates are required to hold at least five meetings at Palestinian universities to impart the know-how they acquired.
Tali Heruti-Sover is a contributing writer for Al-Monitor's Israel Pulse and the editor of the entrepreneur, career and management sections of The Marker, the leading economic daily newspaper In Israel (published by the Haaretz group).
Read More: http://www.al-monitor.com/pulse/originals/2013/02/building-palestinian-high-tech-success-story.html