New Negev Taking Shape as Young Entrepreneurs Bring High-tech, Arts to Southern Israel

Closing factories in long-neglected region make way for startup accelerators, which remain a hard sale for Tel Aviv-based industry

MindCET accelerator in Yeruham, southern Israel, June 17, 2019.
Eyal Toueg

It’s hard to miss the Phoenicia Glass Works plant in Yeruham. Its large hangars, a big mound of blue crystals and the huge furnace are visible from just about everywhere. All was quiet here on a recent Monday afternoon. Work at the plant continues as usual – at least for the time being: Over the last few months, the company has been the target of an ultra-Orthodox boycott (because its furnace operates on Shabbat). If it succeeds, the employees may find themselves out of work for some time, like many other factory workers in the Negev, because there are so few local jobs.

Just 50 meters away, however, a brighter future beckons Negev residents, especially the younger generation – one that could help make the remote town a part of Startup Nation. A complex of buildings, now in the final phase of construction, is designed to be the home for young companies focused on education technology.

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The center is being developed by MindCET, which was established by the Center for Educational Technology, a nonprofit corporation that develops technology for Israeli schools. Led by CEO Avi Warshavsky, MindCET operates a high-tech accelerator for edtech startups to help them develop and commercialize products and services like software and apps.

“We’re talking with startups in the field and encouraging them to come here,” says Dr. Ilan Ben-Yaacov, MindCET’s pedagogical director. “We want everyone who’s involved in the field of technology and education to come here. For this to be their workplace.”

He says the town’s reputation as a human capital backwater is wrong: Hundreds of engineers live in the Yeruham area and commute to work in Kiryat Gat, where Intel operates a giant facility, or Be’er Sheva, which has emerged as a center for cybersecurity. “We want them to stay here,” he adds.

What does this place have to offer them?

“There’s fertile ground here for entrepreneurship,” says Ben-Yaacov. “We have support from the local council, there’s an excellent school system that we work with and try out some of our projects with. There’s an atmosphere here that allows time for learning and focusing. Why shouldn’t they come? There’s no reason for startups not to be operating in the south.”

But so far, that hasn’t happened. “True, it’s one of those chicken-and-egg things,” reflects Ben-Yaacov. “People think there’s no high-tech here, so they don’t come, so there’s no high-tech here. We need to convince companies in the industry that there’s enough manpower here – there is. The idea is not that engineers from Tel Aviv will come to Yeruham, but to provide employment for the engineers who already live here. MindCET, for example, has 18 employees, and half are local residents.”

The MindCET initiative is just one of many that are underway in Israel’s south, aimed at meeting the needs of local residents and attracting new ones. One of the main organizations promoting moving to the south (and also the north) is the OR Movement, founded in 2002 by CEO Roni Flamer and deputy CEO Ofir Fisher. To date, the organization has established eight new localities – from the planning stage to residents moving in – and built 93 public and community buildings. It has strengthened and expanded 48 moshavim and kibbutzim and 13 towns in the Negev and Galilee and organized 34 community groups around a common project or other common denominator. It’s helped about 45,000 people move to the Negev and Galilee.

The Ofakim youth center, June 17, 2019.
Eyal Toueg

Why would entrepreneurs from the center of the country, the hub of Israel’s business activity, want to move to the periphery? “First of all, we’d like to do away with the term ‘periphery’ and establish ‘equal cities’ that grant equal opportunities to their residents,” says Flamer. “Take Yeruham, for example. There are a lot of engineers there who have to travel north for work. Our goal is to assist the local population to conceive and develop opportunities in the towns they live in, without having to be dependent upon the employment, cultural and health services from outside the area. At the same time, we’re offering the young generation the chance to be the new pioneers. There’s something about more far-flung places that fosters creativity and entrepreneurship, without the pressure and competition that are typical in the center of the country.”

‘Change starts from below’

The second floor of the MindCET building in Yeruham is laid out almost completely in an open-space plan, but the atmosphere is still very calm and relaxed. Among the resident entrepreneurs is Moshe Pesach, who together with his wife Mona Benichai founded StepUp, a startup focused on helping companies build their marketing and sales systems.

“I believe the south has potential for entrepreneurship, because you don’t have the same kind of competition here and there’s more room to relax and figure out what’s right for you,” says Pesach. “There’s less craziness here than in the center, and that enabled us to be more focused on our niche.”

As he sees it, “Yeruham is a good place for entrepreneurs. There’s a sense of community and you can develop ideas from scratch. It’s a place that is accepting.” He, too, says that contrary to what many may think, “There are lots of smart and talented people in Yeruham, college graduates and professionals who are forced to travel far for work. It’s not just people who have moved here.”

Musicians at Kulna center, Yeruham, June 17, 2019.
Eyal Toueg

The region’s factory workers represent the older generation; the younger generation is much more entrepreneurial, active online and acting as sellers on Amazon, he says: “The potential here is great, and the change is starting from below. There’s support from the local council, too, of course, but there are a lot of local initiatives here, not just in high-tech, but also in education and culture – not enough yet, but it’s a start.“

One of the new cultural projects in town is just a five-minute drive from MindCET. Kulna, founded four years ago by Kobi Yifrah and Yaniv Yitshak, aims to provide a “cultural and educational home for the spirit of Judaism from Islamic and Middle Eastern countries and challenging the division between ‘East’ and ‘West,’ religious and secular,” they say. Not long afterwards, the pair was joined by Tzurit Buskila, who currently manages a joint study program with Sapir College in Ashkelon.

Kulna currently runs four programs for 140 young people from around the country: A half-year pre-army program for recent high school graduates; the Elul from the Mizrah project – 40 days devoted to Jewish study, with an emphasis on content from places like Morocco, India and Ethiopia; the Sunrise program for soldiers released from army service; and the newest one, Kulna Sapir, which combines music studies, activism and the ability to earn a degree from Sapir College.

“In general, the periphery offers greater possibilities for entrepreneurial initiatives,” says Buskila. “A young person who wants to create something new will have a much easier time finding his way in the periphery. Our goal was to create a culture out of the strengths that already exist here, not to bring the culture of the center here. We believe there are a lot of people who are looking for a different kind of academic experience, and those are the folks we’re aiming at.”

In Ofakim, a cinema reborn

Many of the towns in the south were established quickly in the 1950s and ‘60s and populated mainly by immigrants from North Africa. From the start they were designed to be the country’s backyard, and investment was focused primarily on industry and less on things like education, culture and leisure.

Even today, the older generation is mainly employed in the factories and barely gets by. Many young people leave for the center of the country, where they see more opportunities for success. “Anyone who can escape, does,” says one woman who grew up in the south and now lives in the north of the country. “In the south there’s no real way to get ahead or to give our kids a good start. The schools aren’t good, and the health system is another thing altogether. Believe me, you don’t want to get sick there.”

Nadav Mishali at the Ofakim cinema, June 17, 2019.
Eyal Toueg

Nonetheless, a good number of those who left the Negev for elsewhere in Israel or even abroad now want to come back, but aren’t ready to give up all the amenities the center has to offer. Many are trying to breathe new life into the local scene, opening cafes and restaurants, forming bands and opening venues for parties and lectures.

Nadav Mishali, 32, was raised in Ofakim. He spent two years living in New Zealand in his 20s and returned to Israel in 2010 to study filmmaking. He then returned to his hometown. “As part of my film studies at Sapir College, I made a documentary about the big cinema that operated in Ofakim in the 1960s and 1970s,” he says. “It had 1,000 seats and an impressive building. But the cinema went out of business and the building became a white elephant.”

When he visited the abandoned building years later, he was saddened to see reels of film scattered about on the floor and made up his mind to do something about it.

After completing the first part of his documentary seven years ago, Mishali screened it on the facade of the old building and invited the locals to come watch, so he could film them for one of the scenes. The turnout surpassed expectations. The local council, and later the Gesher Fund, agreed to support a mobile cinema in Ofakim that screens films on the walls of residential buildings in the city’s neighborhoods. The council provides sound and lighting equipment and mats and cushions for seating. “It worked. We saw that people here really want cinema,” says Mishali.

Six years ago, when the city decided to renovate its youth center, Mishali lobbied for it to include a cinema as well. After some debate, the council agreed. The colorful and attractive youth center, which reopened in 2017, has a cafe as well to provide an all-inclusive evening out.

“There are 86 seats and we show new releases, from Israel and abroad, Wednesday through Saturday,” says Mishali. “We’re not at full capacity, it’s not easy to fill the place, it takes work. But we’re constantly looking into what we can do to get more people to come.” A ticket costs 30 shekels, and just 20 shekels buys you a giant popcorn plus a drink.

Mishali is hopeful: “I believe that the periphery is super-fertile ground for new initiatives. People here have a very strong desire for something to happen in this city, something that is already happening in other cities.”

A drive through the streets of Ofakim, population 32,000, reveals how much it has been left behind compared to other towns. Most of the apartment buildings are so-called train buildings – long cement structures built in the 1960s and ‘70s. Even those that have since been renovated show signs of neglect, like peeling facades and yellowing gardens. Unlike Yeruham, where new construction abounds and infrastructure is more developed, Ofakim feels tired and dated.

‘Buzz about Mitzpeh’

While Ofakim and Yeruham still have to contend with the image of struggling development towns, there’s one place in the south that has been a bit more successful, at least in terms of image – Mitzpeh Ramon, an 80-minute drive from Ofakim.

Over the last few years, the town has become a magnet for entrepreneurs and artists drawn by the desert landscape. Some, like McCann Valley, an arm of the global advertising firm McCann specializing in mobile advertising, are doing well. Others are find it harder going.

'Circus in the Desert' training, Mitzpeh Ramon, June 17, 2019.
Eyal Toueg

One of the newest and most interesting local projects was started by acrobat Adam De Lange: the Circus in the Desert circus school. Fourteen students make up its first cohort, most of them from the Negev but one hailing from Germany.

During our visit, rehearsals for the end-of-the-year show were underway. Everyone was in intense focus, practicing their acrobatics and other feats over and over again. They fell, got up and went through the steps again, determined to put on a professional performance – though it’s not clear how big an audience they will have. “We invited people from the area to come see the circus for a token price,” says De Lange. “We’re hoping to get a big crowd.”

De Lange was born in a small community in the Galilee and later moved to Nahariya, on Israel’s border with Lebanon. After the army, he spent a short time in Mitzpeh Ramon before earning his bachelor’s and master’s degrees in public policy from Hebrew University in Jerusalem. He was 28 when he discovered acrobalance, a form of acrobatics performed with a partner. Through this, he fell in love with the circus. He launched his school a year ago.

“I rented a place, invested 50,000 shekels [$14,000] in equipment and recruited teachers,” he says. “I did the marketing on Facebook. Now we’re holding open days ahead of registration for the coming year and there’s been a strong response. I’m not making much of a living from it yet, but I hope it will expand and I believe that through the circus we’ll be able to reach more audiences and different types of projects – like therapy through circus training, coming to schools, and more.

“Despite the difficulty, to me it’s a miracle that I’m even earning anything at this early stage. This is a business that has just begun. It’s a product with content that I believe in, and Mitzpeh Ramon is totally the kind of place where you can create something and succeed with it. You don’t have the same competition as in the center, and it’s possible to create something new and generate demand. Not every business here makes it, but the same can be said for Tel Aviv.”

The local grass-roots initiatives show that with ambition and creativity, it is possible to succeed without relying on the employment services. But the numbers are still small and the challenges can be daunting. For the southern periphery to become a real alternative to the expensive cost of living in the center of the country, many more local initiatives are necessary, successful as they may be.