In Rare Public Appeal, Palestinians Woo Israeli High-tech Firms

'In five years, we’ll begin to see Palestinian startups popping up too,' says Mellanox CEO Eyal Waldman, the Israeli who co-hosted Tel Aviv event

Participants in a Tel Aviv event to introduce Israeli high-tech firms to the advantages of outsourcing projects to Palestinian engineers and programmers.Second from right Murad Tahboub; third from right Eyal Waldman; fourth from right Sari Taha
Mellanox Technologies

It had all the appearances of an ordinary business event: A group of executives pitching the benefits of outsourcing projects to their highly qualified engineers before a room packed with potential clients.

But this was no ordinary business event. These were Palestinians from the West Bank who had made a mid-week trip to Tel Aviv’s high-tech hub as part of a concerted effort to expand their Israeli client base.

That Israelis and Palestinians, despite the ongoing conflict, often do business together is nothing new. But these connections are typically kept under wraps, with the Palestinians especially resistant to publicity. What made this particular gathering so unusual, if not unprecedented, was that it was advertised widely and open to the press.

“Our Palestinians friends here initially did not want to invite the media, and we had some discussion about it,” Eyal Waldman, the chief executive officer of Mellanox Technologies, the Israeli company that co-hosted it, revealed at the event held Wednesday evening. “I understand where they’re coming from because there could be a backlash back home. But this is something we need to overcome.”

Mellanox, a Nasdaq-traded maker of high-speed data equipment, outsources software development to 100 Palestinians engineers in the West Bank and another 10 in the Gaza Strip. These engineers are all employed through ASAL Technologies, a Palestinian software firm that recently moved from Ramallah to the brand new city of Rawabi nearby.

The event, co-hosted by ASAL, was billed as an opportunity to introduce members of the Israeli high-tech community to the advantages of outsourcing projects to Palestinian engineers and programmers and to the other benefits of doing business across the Green Line.

Introducing himself to the crowd, ASAL Managing Director Murad Tahboub said: “Look at me. I’m a normal Palestinian, and there are a lot like me.”

As if they had planned it in advance, Tahboub and Waldman were dressed in almost identical attire: light-blue, button-down shirts and jeans.

“You can do business anywhere around the world,” Tahboub told the dozens of executives and projects managers gathered in the room. “But there are very few places you can do business and also do good. In this region, you can do business and do good at the same time.”

Waldman ticked off the advantages of outsourcing work to Palestinian engineers. “Instead of going and trying to educate engineers in India or in China, we can do it 20-30 kilometers from here,” he said. “They are very smart and motivated people, labor is much cheaper there, we work in the same time zone, and we have a very similar cultural base.”

Waldman said his dream was that Israeli companies would eventually serve the same role for the fledgling Palestinian high-tech sector as U.S. multinationals once served for them. “Back in the 1970s,” he recalled, “companies like Intel and IBM began setting up design centers in Israel. That’s how we learned how to do R&D and other projects, and that’s why so many startups started popping here in the 80s and 90s. I believe the Palestinians can learn from us and that in about five years from now, we’ll begin to see startups popping up around there as well.”

According to figures presented by the Palestinians participants, roughly 3,000 engineers graduate every year from universities in the West Bank, but only 30 percent of them find employment in their field. Israel, on the other hand, suffers from a shortage of engineers.

Like Ramallah, where most of the Palestinian high-tech industry had been based until now, Rawabi is located in what is known as “Area A” of the West Bank. “Area A” is under the complete control of the Palestinian Authority and Israelis are prohibited by their government from traveling there for security reasons, although many ignore the ban.

For Israelis interested in hiring Palestinians in the West Bank, Rawabi was nonetheless a preferable location, said Sari Taha, manager of the new tech hub in this planned city.

“The road leading to Rawabi is in Area C, which is under Israeli control,” he noted.

“So all you have to do is put our address in Waze, press OK when it warns you that you’re going into the West Bank, and you can drive straight to us without having to go through any Palestinian villages.”

“It’s just like going to Herzliya Pituach,” he added, referring to one of Israel’s high-tech hubs north of Tel Aviv.

If, for Israelis, cheaper labor and identical times zones are some of the benefits of working with Palestinians, he said, then for Palestinians, a key advantage is being near Israel.

“Our proximity to Israel is one of our top selling points to multinationals,” Taha said. Rawabi has been trying to lure tech giants to its new commercial hub. Thus far, Cisco is the only major multinational to establish a base in the West Bank.

Despite the proximity, travel to Israel from the West Bank is not always simple, especially when tensions flare up in the region. The trip from Rawabi to Tel Aviv, which should not take more than an hour, can often take much longer because of Israeli military checkpoints along the way.

In recent years, the “anti-normalization” movement, which rejects cooperation and collaboration with Israel on the grounds that such efforts legitimize the occupation, has gained a strong following among Palestinians.

Taha was asked by an Israeli participant in the audience how he and his colleagues respond to those opposed to normalization. “Until now, there has not been a single Palestinian high-tech company that has been confronted by the BDS [Boycott, Divest and Sanctions] movement for working with Israeli partners,” he said. “And I don’t think that there ever will be because they know that this will do more harm than good.”

Murad reached for the microphone so that he, too, could respond. “Nobody can measure my nationalism or patriotism as a Palestinian,” he said. “The issue here is doing what’s good for the Palestinian economy and for the Palestinian and Israeli high-tech sectors. It has nothing to do with anything else.”