Can Startup Nation Save Israel From Bibi?

Israel's technological innovation makes us friends around the world, but the prime minister has been working overtime to ensure we have a lot of enemies.

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Could the spring of hope from Israel's technological prowess be eclipsed by Netanyahu's winter of despair?Credit: Ilya Moshkov

Look at Israel’s standing in the world with a cold eye and you can only conclude we are living in the best of times and the worst of times.

On the one hand, there is a spring of hope in our two key economic assets -- energy and innovation. On the other, the election and the right-religious government seem destined to produce threaten a winter of despair. In short, we have everything before us and nothing before us.

Let’s be seasonal and optimistic, and start with the spring of hope.

We tend to give short shrift to economics and business when we try to weigh Israel’s ability to make and keep friends in the world community. Peace processes, Security Council resolutions, wars, terror attacks and speeches are the barometer by which we conventionally measure how much Israel is liked or loathed. If economics affect Israel, we assume it’s for the worst because the Arabs have all that oil and Israel is a bit player on the global economic stage.

It is true, Israel is a bit player, but it has two assets that have been able it to ham it up.

Holding their noses and buying from Israel

One is the conventional economic asset of energy, namely natural gas. We are not a major world energy power, but we have enough gas to become an important regional one if we play our cards correctly.

The energy crises in Egypt, Jordan and the Palestinian Authority have compelled them to act against what their domestic politics and natural coldness toward Israel would dictate: they have agreed to buy gas from Israel under long-term contracts. The gas may yet force Turkey to rethink its hostility toward Israel, too.

It’s not that gas will turn any of these countries into real friends. There won’t be Egypt-Israel Friendship Associations springing up or Jordanians cheering us on when we make the Eurovision finals. But it certainly means that they will become economically dependent on Israel in a critical way, a fact that they will have to take that into account in their overall relations with us.

As an energy asset, gas is less glamorous than oil (who’s ever heard of a gas baron? JR and Jed Clampett made their fortunes in black gold, not bubbles), but in the real world it’s got a lot of advantages, environmental as well as logistical. It’s cleaner to burn than oil, and gas is delivered most efficiently and cheaply by pipeline. That’s how Egypt, Jordan and the PA will be getting their gas from Israel, so they won’t be able to rescind contracts in a political tiff and buy it somewhere else.

Shopping for an edge in Israel

Israel’s second economic asset is its innovative prowess. In fact, Israel may be first country in a position to leverage its intellectual property so effectively for diplomatic purposes since Lorenzo de Medici sent Ghirlandaio, Botticelli, Pietro Perugino and Cosimo Rosselli to Rome to decorate the Sistine Chapel and butter up Pope Sixtus IV.

Innovation and technology isn’t just about flooding the world with gadgets and turning 24-year-olds into multi-billionaires. Continuous innovation is what makes economies grow and ensure rising productivity and standards of living. That's why it is important to rising economic powers like China and India and established ones like Japan that want to make sure they retain their edge. And Israel’s Startup Nation is one of the few – maybe the only – place where they can get it.

America and Europe are technology powers, but they have their own industry and don’t easily give up their IP to competitors. A small and brainy country with no aspirations, say, to build an automobile industry of smart cars, Israel is mostly there for the taking, or more accurately for the buying or for strategic cooperation.

It’s no wonder than that Asian powers have become friendlier to Israel in recent years and their businesses coming to invest and collaborate.

Like friendships based on gas, those based on innovation are no lovefest either. They are based on practical needs, but they differ from energy because they are much more people based – engineers, investors, entrepreneurs and business executives working closely with each and learning each other’s cultural quirks and forming real, personal friendships over time.

There’s no turning on the pipeline and letting the gas flow out and the profits flow in. In other words, technology and innovation promises not just common economic interests but has the potential to build deeper ones based on people-to-people contact.

But that spring threatens to be eclipsed by Netanyahu’s winter.

It's getting cold

The extent of European hostility and the effectiveness of the BDS movement have been routinely exaggerated by everyone involved. The real question isn’t whether college student councils pass resolutions or cooperative grocery sources boycott Israeli hummus, but whether the governments in Europe and America will act.

They don’t have to take extreme measures like imposing sanctions Israel; it is enough that relations with Israel become so rocky that companies give second thought to entangling themselves.

The last two Netanyahu governments had a center-left component, Bibi’s declared commitment to a two-state solution and an off-again-on-again peace process to sell to the world. Construction in the settlements actually declined in 2009-14, compared with the previous six years.

But Bibi began stripping off that thin veneer of dovishness when he (briefly) rejected the two-state solution in the heat of the election. His new cabinet won’t have any Tzipi Livni to counterbalance Naftali Bennett and Avigor Lieberman.

Instead, we will have a prime minister who seems intent on getting into open and ugly fights with the world’s only superpower and Israel’s most important friend in the world. Worse, he seems to have no compunction about inserting himself into America’s domestic political fray and alienate half the American electorate and political establishment – and a far great percentage of American Jews – by putting Israel into the Republican camp.

You would have thought that having miscalled the 2012 election, Bibi would have made his piece with the Obama White House. Now he seems to be betting on President Ted Cruz or Jeb Bush in 2016, but what if it’s President Hillary Clinton or Rand Paul?

Ironically, Netanyahu’s harping on the existential threat Iran poses to Israel just makes things worse.

Israel likes to present itself as standing aloof of the Middle East turmoil around it: as shrugging off missile wars and keeping factories running and engineers in front of their computer screens no matter what. But it's a burden: Look at that spasm of panic last summer, during the campaign against Gaza, when a few airlines briefly suspended service to Ben-Gurion Airport.

All that effort is being slowly undermined as Bibi inadvertently reminds the world that Startup Nation may be not be here tomorrow at all. The Saudis, who face a much bigger threat than we do from Iranian expansionism, must be laughing as Netanyahu fights their fight and takes all the body blows while they remain on the side practicing quiet and intelligent diplomacy and enjoying whatever gains Netanyahu makes.