Startup Palestine: It Could Happen, With Israeli Help

The interview with Hamas leader Yahya Sinwar that appeared in the daily newspaper Yedioth Ahronoth week was devoted mainly to explaining why Hamas didn’t want war with Israel and how Hamas is doing a great job running Gaza, under the circumstances.

Amid all the doubletalk, Sinwar also made several emotional asides about Palestinian children, saying at one point: “I want my kids to dream of becoming doctors not to treat only the wounded, but cancer patients.”

Hamas, however, doesn’t seem to care an awful lot about building a future for the next generation of Palestinians, beyond the goal of liberating Palestine and creating a society built on Islamic values as the its leaders see them.

If they did care, they would be investing in education and the economy now, because if a state of Palestine ever does arise, Palestinian society won’t suddenly morph from a warrior society mobilized to fight Israel.

For that to happen, the groundwork of post-independence society has to be laid down, and the sooner the better, with good schools and universities, a functional economy and institutions, much like the pre-state Zionists did. Instead, Hamas is all about mobilizing for war.

If the leadership, Hamas or the Palestinian Authority, really cared about the Palestinian children, they would be starting to build economic foundations for their future state now.  And much of the take can be done, through high-tech.

Given that the West Bank is subject to border closings and barriers, and that Gaza is subject to complete blockade, the prospect of Rafah and Ramallah turning into the next Silicon Valley might seem preposterous. It’s not.

Now you're in business, sort of

One of the beauties of high-tech is that all you need besides a fertile mind is a good internet connection, and you’re in business. Closed borders and barriers to physical movement are minor issues. Note the example of Israel itself.

Of course, the same constraints we faced are different from the ones the Palestinians do today, but at the dawn of Startup Nation in the early 1990s, Israel was a far cry from the epicenter of global tech in Silicon Valley. Communications weren’t near as fast and ubiquitous as they are now. But they were good enough and all Israeli tech entrepreneurs had to do was prove they could compete.

There already is a Palestinian startup scene of sorts, but as a recent World Bank report shows, it hasn’t been a roaring success.

Palestinian universities turn out about 3,000 engineering and computer science graduates every year, but their unemployment rate is close to 20%.

On the other hand, there are a huge number of technology incubators and accelerators in the Palestinian sphere (relative to the size of the economy and tech sector): centers where newly hatched companies can get professional help starting up, mentoring and inexpensive facilities.

That is because, like much else about the Palestinian economy, the tech sector has been showered with international aid. Between the West Bank and Gaza, there are more than 20 incubators and accelerators funded by various donors. Many are sponsored by the biggest names in the field, but their success rate is pretty poor. Palestinian startups that were launched without the aid of an incubator or an accelerator had slightly better rate of success.

As the World Bank gently put it, the whole Palestinian entrepreneurship system is “supply-driven rather than market driven,” which is a nice way of saying a lot of organizations and governments with good intensions have swamped a tiny tech industry with money and help that it can’t possibly make good use of. In fact, if it creates opportunity, it's for people who aren’t entrepreneur material to get funding.

There is an alternative, which is to turn the West Bank and even Gaza into an arm of Israel’s Startup Nation. On a small scale, it is already happening. Companies like Mellanox, Frieghtos and the Israeli unit of Nokia have hired hundreds of Palestinians.

Mellanox even has 20 engineers working in Gaza - whom company executives have never met face to face because they can’t go into Gaza and their Gaza staff can’t leave.

Meanwhile, Israel’s tech sector is badly short of engineers and has tapped into talent pools as far away as India and Ukraine to fill the gap.

For Palestinians, working for Israeli companies doesn’t have to consign them to a life beholden to Israeli bosses. As Israelis themselves do, when they decamp to Silicon Valley early in their careers, working for a big, successful company is an education and a way to form the business networks. When the time comes, the most ambitious and successful of them start their own companies.

What’s stopping Palestine from becoming another major outsourcing center is Israeli suspicions about working with Palestinians – but mainly, the resistance of the BDS movement, whose activists pressure Palestinians not to work for Israeli companies.

The irony is that while BDS hasn’t been able to put a dent into the Israeli high-tech phenomenon, it’s doing its best to destroy an emerging a Palestinian tech sector.

Like Sinwar and Hamas, BDS is singularly focused on the one goal of confrontation with Israel, and ordinary Palestinians be damned.