Apr 27, 2012
Apr 5, 2012
Capital Nature
Our visit to Capital Nature took place during our first day of visits in Tel Aviv. At the presentation, chairs and space were in short supply and we held off hunger with some well deserved snacks. The presentation covered a brief history of Capital Nature and an overview of their initiatives including funding renewable energy start-ups, funding academic research and running a test facility next to Kibbutz Ketura called Experimentum, which we would later visit.
Mar 28, 2012
NYT Article - co-op votes on boycotting Israeli foods
Check out this interesting turn of events at the Park Slope Food Co-op (esp. interesting given that the area has a large Jewish population):
Mar 25, 2012
Yale SOM meets President Shimon Peres
On our second-to-last night of the International Experience, we met with Israeli President and Nobel Peace Prize Laureate Shimon Peres at his house in Jerusalem, along with students from Harvard's Kennedy School and NYU Stern School of Business. Prompted by a question from Yale's own C.J. Lemky, President Peres spoke to the group about the role of business in the peace process.
Also discussed was the suitability of sanctions on Iran in response to their nuclear program. In contrast to the message the American Congress and media had just received from Prime Minister Netanyahu, President Peres stressed the importance of exhausting all diplomatic possibilities before turning to military options.
Creating a community of innovation - Rotem
The visit to Rotem was a unique opportunity to look at how government can work with private sector to foster innovation. It is a tricky job because incentives have to be pitched perfectly. Too much financial aid and people with non-viable businesses will try to be a part of this community and waste general resources. Too little aid, and you lose the entrepreneurs with the good ideas.
In particular, Rotem was focused on hi-tech renewable energy technologies. Unlike internet and software innovations, these require extremely long incu
bation periods and capital investment. In many cases, beta testing can go on for several years. That is a huge commitment and one that is difficult for individual entrepreneurs to take on - unless someone like Rotem comes along to help.
A theme that kept appearing in this trip was the fact that Israel is committed to energy independence (or as much of it as they can have). And this was clearly seen through organizations like Rotem which are government owned - but run like private sector companies. As the US government looks to boost jobs with innovation and entrepreneurship - I think there are many useful insights from case studies like Rotem on how to be helpful without interfering.
Read more: http://www.h-v.co.il/
Mar 18, 2012
Better Place: Visit Summary
This visit stood out among our other stops in Israel in part because Better Place is extremely focused on selling its concept. So, visiting the Better Place showroom outside of Tel Aviv entailed a curated sales pitch - we watched a beautifully animated video that explained the need for a game-changing concept.
While we were familiar with the basic premise, aspects of the model that were new to me include:
- As of right now, only Nissan-Renault produces cars for Better Place; however, any automaker could produce cars equipped with the Better Place battery and be part of the leasing program.
- When a person decides to buy a Better Place car, they purchase the car, but they lease the battery – this allows them to pay a lower price (about $36K) since the battery is expensive.
- Charging stations are placed throughout metropolitan areas where people would normally park their cars for a couple of hours (for example, at work, at the grocery store, and at the movies).
- Each person gets a Better Place charging station installed at their home. This station is hooked up to their electricity source as a separate outlet – they buy a subscription that pays for the electricity they use to charge their car alone. When people use more/less, fees go up/down.
We were able to test drive the cars which was really great. Since I have owned a Prius, I wasn’t too surprised by how quiet the car was – but, I was impressed by how smooth the acceleration and overall driving experience was. The salespeople there mentioned that they’ve sold about 1,000 cars in Israel so far – and a few potential buyers were in the showroom during our visit. I got the sense that the concept was happening in Israel, although maybe for only a small slice of the market, given the extent of the mindset shift that was required and the cars are still being sold at a relatively high price. Also, when we asked one of the VC firms about Better Place, they alluded to it being a nice idea but not a real solution.
Mar 16, 2012
Solar Field Summary
We visited the solar field in the late afternoon after seeing the power project that relied on using the sun's rays to heat oil and generate power. Although we weren't allowed to take pictures inside the compound, the attached pics were taken from the outside. The main part of the solar field was a large turbine that sat high above the earth in a structure that sort of looked like a flower. The field was surrounded by solar panels, some of which had been dismantled due to a recent storm. The wattage generated by the field was much lower than the field we had just come from - roughly 500 KW - and the purpose of the field was to generate power for a nearby community that could not afford to have power directly fed from the grid.
Mar 5, 2012
Unique first responder model
This article describes a unique model in Israel which gets first aid to accidents faster than an ambulance alone can. It uses a network of qualified volunteers with just an app on their smart phone who can substantially cut wait times for medical attention. What would Swersey say?
http://www.economist.com/node/21543488
http://www.economist.com/node/21543488
Israeli President Peres Visits Bay Area
KCBS---"Israeli President and former Prime Minister Shimon Peres is making an unprecedented visit to the Bay Area this week. Peres is expected to meet with executives of Google and Facebook this week. He will also be addressing the public at San Francisco’s Temple Emanu-El, where he will be joined by California Governor Jerry Brown. "
http://www.dailykos.com/story/2012/03/04/1062470/-President-Obama-President-Peres-at-AIPAC-U-S-and-Israel-share-common-visions-in-Mid-East-
http://sanfrancisco.cbslocal.com/2012/03/04/israeli-president-paying-special-visit-to-bay-area-this-week/
http://www.jpost.com/DiplomacyAndPolitics/Article.aspx?id=260500
http://www.dailykos.com/story/2012/03/04/1062470/-President-Obama-President-Peres-at-AIPAC-U-S-and-Israel-share-common-visions-in-Mid-East-
http://sanfrancisco.cbslocal.com/2012/03/04/israeli-president-paying-special-visit-to-bay-area-this-week/
http://www.jpost.com/DiplomacyAndPolitics/Article.aspx?id=260500
Feb 21, 2012
NYTimes magazine article - Will Israel Attack Iran?
neither tech nor R&D related, but a pretty solid way to keep from studying macro for 30-40 minutes:
Feb 10, 2012
Israel Seems Less Affected by Credit Crunch
Anja Hochberg, Head Economics & FX
22.12.2008The ongoing financial crisis affects all countries through various channels: Most directly via the credit crunch, which gridlocked money and credit markets, but also through export links and the loss of purchasing power. The extent to which countries suffer from the crisis, varies significantly. Israel is a country that could be less vulnerable.
Related Links:
Currency Movements
Aggressive Rate Cuts
In addition, the Israeli central bank, the Bank of Israel (BoI), has cut interest rates aggressively. At the time of writing, we have seen another 50 basis points cut to a level of 2.5 percent. Before September 2008, inflation expectations were rather high so the BoI tended to show a rather hawkish stance. Given the pronounced change in inflation expectations and the significant slowdown in global growth, the BoI has reacted quickly to bring down the cost of credit in order to strengthen the economy's ability to deal with the very challenging economic situation.On top of this monetary policy support, fiscal policy initiatives will also back the country's economy. The rather high share of public spending can certainly help getting such programmes quickly into action. The often mentioned "catching up" in certain areas of infrastructure could not only prove to stabilize the economy in the short term. It could also support potential growth in the longer term. At the same time, the region ranks first in various "Doing Business" surveys, indicating a very stimulating business environment. The global financial crisis will affect Israel's economic development. The prevailing set of business conditions, industry orientation, monetary and fiscal policy support should, however, limit the economy's downside potential.
Global Deleveraging
As large losses have been registered on assets in major markets, and as money market conditions tightened, there has been forced deleveraging of positions around the world affecting all asset classes. The consequence of this deleveraging is that market participants are liquidating their emerging market investments. They either repatriate their capital or use the proceeds to cover their loans. This is creating considerable outflows, particularly from countries that had been enjoying strong portfolio inflows during the previous credit boom such as South Africa, Brazil and many Eastern European countries.
Feb 9, 2012
I found this site that has downloadable data on the macro economy of Israel that could be of interest for the Macro Assignment, if you haven't already finished. Otherwise, it just might be of general interest.
http://www.tradingeconomics.com/israel/gdp-growth-annual
Link to a PDF / Google Doc with summary info.
http://www.tradingeconomics.com/israel/gdp-growth-annual
Link to a PDF / Google Doc with summary info.
Israel is planning a sovereign wealth fund to turn natural gas to gold
Israel planning investment fund to turn natural gas to gold
JERUSALEM – Israel is putting together a plan for a national investment fund that would put to work an anticipated natural gas bonanza to fuel both an export-geared economy and provide a nest egg of $10 billion for future generations in less than a decade.
Enlarge
Albatross Aerial Perspective /AP
The Tamar Lease natural gas rig, 90km west of the city of Haifa, Israel.
The proposed Israeli sovereign wealth fund is still in the planning phase, but officials have said some of the revenue would be invested in critical areas such as education and health.
Also being discussed is using some of the proceeds to endow a new set of export-oriented, technology-based industries that would build on what has traditionally been the country's greatest resource: human capital.
The fund would mark the beginning of a strategic development for the Jewish state in an oil-rich region where it has few friends and has had to rely on its own industry and outside aid for economic growth. It would also make it the latest member of a club whose members have typically been energy exporting titans such as Saudi Arabia, the United Arab Emirates and Norway.
Israel would become "a role model of a developing economy that moved into developed economy status," said Glenn Yago, senior director at the Milken Instituteeconomic think tank. The institute was enlisted by the Israeli government to map out alternative structures for a sovereign wealth fund, drawing on the experiences of other nations with similar investment vehicles.
The driving force behind the fund was the 2009 discovery of two large offshore natural gas fields with estimated reserves of 25 trillion cubic meters of gas. The fields were a boon for resource-poor Israel. The late Prime Minister Golda Meir famously lamented that Moses "took us 40 years through the desert in order to bring us to the one spot in the Middle East that has no oil."
A consortium headed by U.S.-based Noble Energy has said it will begin extracting gas from the deepwater gas fields in about a year, with production expected to far exceed Israel's domestic gas needs.
Officials estimate that gas receipts will bring in between $2 billion to $3 billion per year. And they are working on what to do with the proceeds.
Based on Bank of Israel and Finance Ministry assessments, an investment fund could be managing $10 billion by 2021, with revenue starting to accumulate by 2015, said Yago.
Recommendations for the fund's structure were recently submitted to the office of Prime Minister Benjamin Netanyahu, but no decision has yet been taken on who will manage the fund and where the investments will go, officials said.
Once a proposal is final, it would need parliamentary approval. A Finance Ministry official noted it would likely take until the end of the decade for the fund to start building a critical mass. The official spoke on condition of anonymity because no formal decisions had yet been taken.
"We are looking at sharing this wealth with future generations and at the same time creating a safety cushion," Eugene Kandel, the head of Israel's national economic council, told reporters last year.
In comparison to its regional neighbors, Israel's sovereign wealth fund would be minuscule. Saudi Arabia, the world's largest oil exporter, has reserves of more than $500 billion while even civil war-scarred Libya has an investment fund and reserves estimated at $70 billion to $110 billion.
Given its limitations, Israel appears to be setting modest goals for the fund.
To avoid typical pitfalls like inflation that face countries when large amounts of cash are injected into their economies, the Israeli fund would likely invest most of its revenue abroad. Returns from those investments — not the principal — would then be channeled into the Israeli economy for purposes like education.
It would also further stimulate an economy that was able to weather the worst of the global financial crisis in 2009, but must grow much more rapidly if it is to narrow income gaps that helped stoke mass protests across the country last summer.
Some senior Israeli officials have proposed using some of the money to develop new industries rich in intellectual property, life sciences, water and alternative energy.
That sector has helped boost the broader economy, which has seen per capita GDPnearly triple over the past 20 years to roughly $30,000 — near the European Union's average.
Milken's Yago estimates economic growth would have to double its projected 2012 rate of 2.8% to bridge income divides that have strained Israel's social fabric.
"You can only do that if you increase the level of growth by increasing the level of exports," not only in existing industries but new, knowledge-based ones, he said.
Copyright 2012 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
Feb 6, 2012
New art museum in Tel Aviv
There's a new-ish art museum in Tel Aviv that's getting attention from the architecture community. (Jonas? Thoughts?)
More here.
Feb 4, 2012
Feb 1, 2012
Israel Documentaries Wins Prize at Sundance Festival
I just came across an article on the Jerusalem Post - Israel did very well in the documentary category at the Sundance Festival, scoring two major awards.
Jan 31, 2012
Jan 30, 2012
Looking for an Oil Boom in Israel's Napa Valley
A slightly dated article from Businessweek but still an interesting read.
It talks about Israel's shale oil reserves which could be among the largest in the world
http://www.businessweek.com/magazine/content/11_24/b4232017039815.htm
It talks about Israel's shale oil reserves which could be among the largest in the world
http://www.businessweek.com/magazine/content/11_24/b4232017039815.htm
Jan 21, 2012
[The Economist] The promised land needs people
Demography and business in Israel
The promised land needs people
Why Israeli firms face a skills shortage
Jan 21st 2012 | TEL AVIV | from the print edition
Apparently it’s called a job application
THIS month Teva, an Israeli drug firm, announced that it had poached a new boss, Jeremy Levin, from Bristol-Myers Squibb, an American rival. Mr Levin is exactly the kind of immigrant Israel needs. He swotted at Oxford and Cambridge and has run companies in New York. He has lived in six countries and has contacts in dozens. And he loves Israel. “The opportunity to live and work in Israel”, he said, “is compelling.”
The dynamism of Israeli business owes much to immigration. In the decade after the Soviet Union collapsed, 1m immigrants flocked to Israel. This huge influx of energy and talent helped kick-start Israel’s start-up boom.
Diaspora ties help, too. Israeli entrepreneurs nearly all know people in other countries. Many divide their time between home and abroad. Their connections keep the latest ideas from Palo Alto and Hong Kong flowing into Tel Aviv, and help Israeli start-ups find new markets and new recruits.
But Israel’s demographic advantage is fading. The Soviet Union will not collapse again. “We’re not going to get another million Russians,” sighs an official in Tel Aviv. Immigration has collapsed from 200,000 in 1990 to a mere 17,000 in 2010. Living standards are higher in America, and the neighbours less scary.
The fastest-growing population groups in Israel are those least plugged in to the high-tech economy: Israeli Arabs, who lag educationally, and haredim (ultra-orthodox Jews), whom the government pays to study the Torah. Two-thirds of working-age haredi men don’t work. They do procreate, however. In 1960 only 15% of Israeli schoolkids attended Arab or haredi schools. Now it’s about 50%, and if current trends continue it will be 78% by 2040, according to the Taub Centre, an Israeli think-tank.
If tomorrow’s haredim are as workshy as today’s, the start-up nation is doomed. But trends that can’t continue, won’t, says Glenn Yago of the Milken Institute, a global think-tank. Theharedim are highly literate and perfectly capable of working. Some day, they will have to.
[The Economist] What next for the start-up nation?
Israeli technology companies
What next for the start-up nation?
Even in Israel, it is hard to turn young companies into adults
Jan 21st 2012 | TEL AVIV | from the print edition
THE young must shout if they want to be heard. In a stone hangar in the old port of Jaffa, 30 entrepreneurs have five minutes each to present their start-up companies to a panel of digital luminaries and an audience that includes potential investors. Not everyone in the room is ready to shut up and listen, so the hopefuls must battle against the din. Feng-GUI explains how, by simulating human vision, it can tell advertisers and designers which areas of a web page are most likely to grab people’s attention. CopyV promises to send large files quickly and securely. With Fooducate, “a dietician in your pocket”, on your smartphone, you can scan bar codes in the supermarket and find out what’s really going into your trolley.
Israel’s legions of young technology firms clamour for attention and money. Rapid-pitch events like this one, at DLD Tel Aviv, a two-day conference in November, are common. More than 300 firms applied for a slot at DLD; 100 turned up; the lucky 30 were chosen by raffle. Yossi Vardi, a technology entrepreneur who has invested in 75 start-ups since 1996, says that he receives between three and eight approaches every day.
Dan Senor and Saul Singer called Israel “The Start-Up Nation” in a book of that name in 2009. The label has stuck because it fits. Everybody and his brother-in-law seems to be starting a company—with old schoolmates or army colleagues, in a spare room or the parental home. Starting a business is easier than ever, thanks to advances in information technology. Budding designers of smartphone apps can rent space when they need it on a remote server rather than buying huge amounts of computing power. “The internet has democratised the right to innovate,” says Mr Vardi.
Israelis innovate because they have to. The land is arid, so they excel at water and agricultural technology. They have little oil, so they furrow their brows to find alternatives. They are surrounded by enemies, so their military technology is superb and creates lucrative spin-offs, especially in communications. The relationships forged during military service foster frenetic networking in civilian life. A flood of immigrants in the 1990s gave national brainpower a mighty boost (see article). The results are the envy of almost everyone outside Silicon Valley.
Small country, big dreams
But even in Israel turning tech start-ups into big companies is difficult. For all the comparisons with Silicon Valley, Israel has not begotten a Hewlett-Packard, an Intel or a Google. Its best companies are often bought by American giants while still in their infancy. The biggest home-grown technology company is Teva, a drugmaker which is listed on NASDAQ, an American tech-oriented stockmarket, with a market capitalisation of $43 billion. In information technology the biggest is Check Point, a security specialist founded by veterans of Unit 8200, an elite army-intelligence group. Also on NASDAQ, on which Israel has more companies than any foreign country bar China, it is valued at $11 billion—no minnow, but no whale.
Very young firms have a good deal of support, which is getting stronger. Accelerators, in which entrepreneurs can shape their ideas and meet advisers and investors, are springing up: this week, for example, UpWest Labs, which intends to bring five to ten Israeli start-ups to Silicon Valley for ten-week stints, began its first programme. As well as meeting helpful people, the hopeful entrepreneurs receive $20,000 in seed money.
“There’s a plethora of opportunities at a very early stage to raise $20,000 or $100,000 to get a minimum viable product out there,” says Liat Aaronson, the executive director of the Zell Entrepreneurship Program, a scheme for final-year undergraduates at IDC Herzliya near Tel Aviv. The difficult bit is turning small firms into bigger ones.
One commonly cited problem is a lack of early-stage venture capital: sums of $1m-2m or so. Ms Aaronson agrees that this step is “trickier”, though some firms emerging from the Zell programme have attracted such amounts. People on the course founded the Gifts Project, acquired by eBay in September, which allows people to club together to buy presents online for their friends, and Wibiya, a web-design company that was bought by Conduit, a biggish Israeli firm, for $45m in July. Alumni set up LabPixies, a developer of web and smartphone apps that was spirited away by Google for $25m in April 2010.
Israel attracts far more venture capital per person than any other country—$170 in 2010 to America’s $75 (see chart 1). Yet there does not seem to be enough early-stage money to go around. One reason is that there are simply an awful lot of young companies fighting for a share of the pot.
Another is that venture-capital firms in Israel, just as in other countries, have had a lean few years. That could be changing: investment is climbing back towards its pre-crisis peak (see chart 2).
But some funds based in Israel, several of which were created with public money in the 1990s, are still having difficulty raising money and are hesitant about deploying what they do have. They are likelier than big international brands to deal in smaller amounts. According to the Israel Venture Capital Research Centre, Israeli funds now account for only a quarter of the amount raised by the country’s high-tech companies, down from two-fifths a few years ago. Whether the brand is Israeli or foreign, says Adam Fisher of Bessemer Venture Partners, an international group, the money comes from abroad.
Building a business requires more than money and technology. Companies need customers, and in a country of 7.6m people there are not very many. So Israeli firms are often global virtually from the start. For example, BillGuard, which alerts its users to errors and fraud on their credit and debit cards, has an office in New York, staffed by Yaron Samid, its chief executive and one of its founders, and the head of business development and sales, and keeps a 15-strong product-development team in Herzliya.
Now that young Israeli companies are applying their technical brilliance to consumer products as much as to designing semiconductors or developing computer-security software, broader skills matter more. In a blog post last July, Mr Fisher exhorted them to think about their entire business model, including product design and marketing, from the outset. Some start-ups, he wrote, had made this mental leap, but the “tech crutch”, a model of focusing on technology alone and then selling to foreign multinationals, was “increasingly unsustainable” in the face of competition from China, South Korea and Taiwan.
Building businesses also requires people who are willing to be, say, the 50th employee in someone else’s firm. But in a nation of start-ups a lot of people want to be their own bosses. Talent risks being thinly spread. Mr Samid’s theory is that after their stint in the army many young Israelis have had enough of being told what to do. He reckons that three-quarters of the members of TechAviv, a network of entrepreneurs that he set up, are start-ups with fewer than ten employees.
And making a business into something not merely big but enormous means resisting bigger companies’ blandishments of a few million dollars, or even a few hundred million. Given a certain payoff for selling and an uncertain future going it alone, it is not surprising that many people take the money. Several companies have rejected offers of hundreds of millions of dollars only to fail a few years later. So leaving the task of building a company to someone else may not be such a bad idea.
Mr Vardi certainly thinks so. “We are developing intellectual property, not just companies,” he says. He reels off a list of American tech giants, from Intel to Google, with operations in Israel into which they have folded local firms. Several have been in Israel for decades. It is these multinationals, he says, that create “the 30th, 40th and 500th” jobs in Israeli start-ups. Intel employs more than 7,500 people in the country; HP too has several thousand staff; IBM has more than 2,000. This month Apple made its first Israeli acquisition, Anobit, a maker of parts for flash-memory drives, for a reported $390m. It is said to be setting up a research centre too.
Israel is not alone in agonising over the sale of its home-grown companies. In Britain, the sale of Autonomy, a software company, to HP for $11 billion last year caused a brief national lament. Some Israelis may wish their crops grew taller in the field before the harvest. Most countries would settle for sowing half as much seed.
from the print edition | Business
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