Tag: Business in Israel

Sadly today was our very last day of our wonderful trip to Israel. We spent the day touring the Christian quarter of the old city with Jo leading the way. We walked through the Stations of the Cross and finished at the Church of the Holy Sepulcher. We walked around the church and observed the beautiful architecture. We also visited a tomb site. We were then given free time to roam around the different markets and have lunch. We all did a little bit of shopping and even managed to pick up little gifts for Dean Malter, Konnie and Jo.

After our brief visit in the old city, we returned to the hotel for last minute packing and a trip debriefing. We all sat in a circle and shared our favorite part of the trip, what we found most interesting and if the trip met our expectations coming in. It was nice to hear everyone’s perspectives after the trip, and how their views of the country’s economy has changed.

We then walked over to the restaurant for dinner. We were given obscene amounts of food and took advantage of our last exposure to Israeli cuisine. We reminisced about our favorite parts of the trip and spoke about the memories we will have forever. We said our goodbyes at the airport, and we are all very much looking forward to our class dinner back in St. Louis!

Alexa, Class of 2016, Olin Business School, Toronto

Yesterday we concluded the business portion of our trip, allowing us to dedicate all of our time today to embrace the historical culture of Israel. We started off on Mount Zion where we visited the thousand-year-old building that houses King David’s tomb. Many of us expected it to be decorated with elaborate details, as many burial sites were honored this way in the past. However the room itself was very plain and the tomb was covered with a modest velvet cloth. We then entered the room directly above Kind David’s tomb where the “Last Supper” took place. This truly demonstrated the beauty of Jerusalem and how it houses holy sites for many religions – this one building holds significant historical value for both the Jewish and Christian faith. Our tour guide, Jo, continued to lead us through the Jewish Quarter in the Old City where we explored the markets hoping to make some good bargains.

Later in the day we experienced the overwhelming presence of the Mahane Yehuda Market, or the Shuk. We were immediately faced with over 250 vendors selling fresh fruits and vegetables, fish, meat, nuts, spices, and delicious pastries. It was particularly crowded today as hoards of people were busy shopping for their Shabbat dinners before the market closed for the Sabbath. Most of us were excited to finally be able to go to the infamous bakery right next to the Shuk, called Marzipan, where we splurged on half-baked chocolaty rugelach, fresh out of the oven.
We concluded the day by visiting Israel’s holiest site, the Kotel, or the Western Wall. On Friday evenings, the site is packed with people joyfully welcoming the Sabbath. While the men and women retreated to their designated sections, we all partook in the celebration by joining hands in dance and song with other groups of people and soldiers. We finished off by doing what we do best, consuming way too much delicious food for our diner at Spaghettim.

Sarah – Class of 2016, Olin Business School, New York

Today, marked the fifth and final day of meetings with business leaders for our group. We started off the day with a meeting at the large, impressive facilities of the Israel Ministry of Industry, Trade, and Labor in Jerusalem. There we spoke with officials, including Gabi Bar who is the director of Middle East and North Africa (MENA) trade, and Yair Shiran.
Mr. Bar opened his talk by referring to Israel as being on an “island,” in the midst of their Arab neighbors. He said that three different parties encircle this island. The first is the Palestinian Authority, which is a “captive market,” one which depends on transfer of custom payments that Israel makes monthly, and depend more broadly on Israeli prosperity. The second is the countries with full agreements and diplomatic relations, such as Jordan and Egypt. The final circle is the countries that have no relationship with Israel, many of which boycott Israeli products. We then talked about the QIZ (Qualified Investment Zones) that Isreal has established in Egypt and Jordan.

These QIZs, which allow raw materials to leave Israel, be converted to final goods in Egypt, and then flow through, duty-free to the United States. Bar told us that 180 companies participate in this type of agreement, of the 860 that are eligible. He points this out as evidence that the profitability of the arrangement is key in this situation: during the Arab spring movement in Egypt, all of the businesses continued to operate.

Then, after lunch we spoke with Eldad Taub, a high-tech entrepreneur who has worked with the father of one of the students on our trip. He told us about three ventures that he has worked on. The first, CADENT, replaces the “gloop” that they currently use for dental impressions with a fully digital process. The second, EmBlocker, prevents brain damage during heart bypass surgery. The third, Plan and Act,organizes and mechanizes financial advice.

To round out the day, we spoke with Raphael Nejman who serves as the Chief Operating Officer of Terra Venture Partners. He told us about the ecosystem that Terra has set up, using “TCamp” to invest in the pre-seed stage, Terra Lab Ventures as an incubator for these companies, and then Terra Venture Partners as the VC that structures exits.
Lastly, we had a reception with alumni at the Herzl Museum. The Herzl Museum, located on the grounds of the Mount Herzl (a cemetery for many of the nation’s leaders and military), is a wonderfully interactive museum that walks you through the founder of modern Zionism’s journey to create the State of Israel. We then all had a chance to meet alumni of Washington University who were currently living in Isreal. We’re all now looking forward to spending the rest of the trip sight seeing!

Alex, Class of 2015, Olin Business School, Chicago

After a long and fascinating week, today was our last day of business meetings. We began at the Ministry of Industry, Trade, and Labor with a discussion focusing on the Israeli economy. The speaker, Yair Sharon, spoke about the importance of exposing Israeli industries to competition by allowing foreign companies to compete within Israel. This seemed strange to me at first. If Israel struggles to produce huge companies, why wouldn’t the government want to foster growth by protecting Israeli companies? Many other countries impose high tariffs to protect local companies, yet Israel doesn’t do so. Israel believes the country is better off not wasting resources trying to produce certain goods when they can be imported for much cheaper prices. Instead, Israel can dedicate all of its resources to other industries in which it excels, rather than attempt to compete in industries in which it is at a disadvantage. While I think this has allowed Israel to excel in many industries, I’m curious if this has factored into the issue of imbalanced industries in Israel. Would Israel benefit from having a more well rounded economy?

Next, we spoke with Gabby Bar. His presentation focused on the Israeli economy from the perspective of foreign trade relations. Due to globalization, countries must use goods from wherever they are cheapest in order to compete. In order to compete in foreign trade, nations are constantly searching for trade agreements to avoid having to pay high tariffs. Previously, Israel had benefited from a free trade agreement with Jordan. Jordan wanted access to the U.S. market, so Jordan would trade goods to Israel who would in turn trade them to the U.S. However, now that the U.S. and Jordan have their own free trade agreement, it eliminates the need for Israel as a middleman. Israel does have other trade agreements, though. In addition to a free trade agreement with the U.S., Israel now has the Qualified Industrial Zones (QIZ) agreements with the U.S. and Egypt. The goal of these agreements is for Israel to open new markets, Egypt to increase the competitiveness of its exports to the U.S., and the U.S. to diversify its trading. Israel must ensure it has a variety of trade agreements to protect its economy moving forward.

For our last meeting of the week, we spoke with Raphael Nejman from Terra Venture Partners, a venture capital fund that focuses on clean technology. I found this presentation particularly interesting because the industry I have been studying all semester is clean tech. The issue in this industry is that it requires a lot of capital up front and takes a long time before investors can see a return on their investment. Investing in early stage companies is a huge risk, particularly in this industry, so most VC firms are shifting to later stage investing. Terra, on the other hand, is placing an emphasis on early stage investing. This sets Terra apart and is exactly the type of strategy that is needed to foster the continued growth of companies in the clean tech industry. Especially in this industry, the technology is all there (or at least close), but insufficient support, infrastructure, and capital are preventing further growth. We have talked all semester about Israel’s VC industry and how a willingness to take risks has led to success. But from what I can see, it seems that many Israeli VC firms, as opposed to Terra, are beginning to be more cautious and less willing to take risks. Conversely, Terra’s strategy encompasses the “chutzpah” I have come to expect in Israeli business. I believe more companies should adopt this type of strategy to foster future growth, especially if they hope to alleviate the growing concern about Israel failing to produce large multi-national corporations. After all, it is important not to forget the key elements that allowed Israel’s economy to flourish in the first place.

Jordan, Class of 2016, Olin Business School, New York

We began the day by visiting David Fisher at the American Center, a part of the US Embassy, after an early wake up of 730. There he talked a lot about his job and the many problems facing Israel geographically and politically, which was a nice set up for the meeting with Mark Regev later.

After, we traveled to the Jerusalem Venture Partners (JVP) headquarters where we met with Kobi Rozengarten and a few other people. The office of JVP itself takes up a small part of the whole building, whereas the rest is saved for the incubators. The partners at JVP talked about their process of selecting the companies, some of the companies they are currently investing in, and some other aspects of how they operate. After the meeting, we went down to have a look at one of the companies in the incubator. This company focused on breaking down a video into its elements and forming an index so that advertisers can pop up ads during specific parts that relate to their product. For example, a clothing company would want to pop up their name when a character in a video goes to buy a shirt.
Later we had back-to-back meetings with Netanel Oded of the National Economic Council and Mark Regev, the international spokesperson for the Prime Minister’s Office. With Netanel Oded, he spoke extensively about the ongoing and worsening Orthodox problem in Israel. They have the highest birth rate of any group, meaning they will comprise an even bigger percentage of the population, and among those with the lowest education levels, so it will be very tricky to integrate them into society. However, the problem needs to be addressed soon before it gets out of hand. He also talked about the high housing prices, another main problem that Israel faces, especially in Tel Aviv. While most think it’s a bubble, he claimed that the high prices are not a bubble due to the presence of the fundamentals that support high prices.

The meeting with Mark Regev after was very interesting. There aren’t many chances that we will be able to meet a man of such high stature. He delved into a multitude of subjects, ranging from Iran and their potential nuclear weapons to future peace talks. With Iran, he explained the many scenarios that could occur should they get a nuclear weapon or should Israel attack, and the decision of whether to attack or not will be ultimately be based on limiting the amount of damage. With the peace talks, he mentioned the three things that will be necessary to agree are 1. There must be iron-clad security boundaries 2. They must acknowledge Israel and the Israeli people 3. They must give up all future claims, meaning they can’t ask for anything after the agreements have been made. At one point, he even made us put our pens down and talked about a conversation he had with Benjamin Netanyahu about Syria, information that very few people knew about yet which was very cool.

We ended the day with a visit to the Old City of Jerusalem and a tour of the Kotel Tunnels underneath the Western Wall, a place that can be considered more holy than the wall itself because parts are closer to the Holy of Holies, the central focus of the old Temple Mount. All in all, it was a very good, successful day.

Marc – Olin Business School, Class of 2016, New Jersey

Saturday, March 16th
I can’t believe that today was our last day in Israel! I still don’t know where the time went.

We started Saturday with a walking tour of the Old City of Jerusalem. We made our way through the Christian and Muslim quarters, and ended at The Church of the Holy Sepulchre, the site many where many believe Jesus was crucified. The church featured countless portraits and articles with rich history, and I was enthralled with the thousands of people that had travelled to Israel in order to experience the church firsthand. I am certain that during our visit I must have heard a minimum of ten languages— it was definitely hard to keep track.

We finished our time in the Old City with free time in the Muslim quarter, where life continued as normal, even on Saturday. Many shops in the quarter featured both pro-Israel and anti-Israel memorabilia. Never before had I seen “Visit Palestine” shirts featured next to “I Love Israel” t-shirts.

Overall, Saturday epitomized the religious freedom that Israel allows and encourages in the country. As we entered the walls of the old city, people of the Jewish faith, the Islamic faith, and the Christian faith surrounded us. Each faith is present within the Old City, both with freedom of speech and expression. Where else in the world can you hear the prayers of each faith at the exact same time? As much as the quarters are separated, people of different faiths found no issues venturing into neighboring quarters.

As I look back at the week that was, I know that I leave Israel with a much better understanding of the business, the economy, and the religious history. Without the unique blend, Israel would not be the same. It is due to the distinct circumstances that Israel is able to function and emerge as the Start-Up Nation it has become. From the individuals at the IDC Elevator to the innovators at Given Image, there is a quality of persistence. As David Ben Gurion summarized the Israeli attitude, “If an expert said it can’t be done, get another expert” and that was clearly evident throughout the entirety of our trip.

Daniel, Class of 2014, College of Arts & Sciences, Boston

Photo by  Christyn
This photo was taken on November 17, 2010 in Armenian Quarter, Jerusalem, Yerushalayim, IL, using a Nikon D3000.