Israel’s BDS: Bounce, Develop and Surge

Ambassador (ret.) Yoram Ettinger, “Second Thought: a US-Israel Initiative”
“Israel Hayom”, February 13, 2015,

In defiance of the anti-Israel BDS movement (Boycott, Divestment and Sanctions), diplomatic pressure, regional and global geo-political instability, continued global economic uncertainties and the overall anti-Israel talk brouhaha, Israel demonstrates a robust walk, as evidenced (and impacted) by an expanding net-immigration and a faster-than-expected economic recoveryfrom the 2014 war on Hamas terrorists in Gaza.

 According to the February 3, 2015, Economist Intelligence Unit,“the July-August war in Gaza appears to have had only a transient effect on the economy…. Private sector job creation has played a more significant role with strong expansion.  Employment in this relatively well-paid category rose by 5.2% year on year…. The fall in the unemployment rate comes despite a rise in the participation rate among the core 25-64 year age group from 75.1% in the third quarter of 2013 to 75.8% in the final quarter of 2014, and a modest increase in the share of full time employed persons…. The unemployment rate averaged 5.9% in 2014, compared with 6.3% in 2013, having fallen to a record low of 5.7% in the final quarter of 2014…. The unemployment rate in Israel compares well with the 7.2% among OECD member states….”

 Israel is highlighted as the second most innovative country in the world following the USA, attracting an increasing number of global companies and investors. For instance, the most authoritative source on Israel’s high tech industries, IVC-KPMG,reported that in 2014, Israeli startups raised an all-time record of $3.4bn, compared with $2.3bn in 2013.  Israeli startups raised $1.1bn during the last quarter of 2014 – a 58% rise over the third quarter of 2014, the most raised in one quarter since 1999.  Moreover, in 2014, ten Israeli bio-med companies went public on NASDAQ.  According to The Economist, Israel has the highest density of startups in the world, ranking second to the Silicon Valley in term of absolute number of startups.

 In fact, Young Sohn, the President and Chief Strategy officer of the South Korean electronics giant, Samsung, opined: “Israel is second only to Silicon Valley in total investment by Samsung.” During 2014, Samsung invested heavily in Israeli startups, since “Israel is one of the global centers of entrepreneurship and innovations, a base for future technologies that can influence the lives of millions.” For example, Samsung invested in Israel’s StoreDot’s technology which charges smartphones in two minutes, RePlay’s development of a three dimensional 360 degrees video, EarlySense’s smartphone-related hardware which monitors a patient’s vital signs without attaching any device to the body.

 On December 30, 2014, China (Israel’s leading Asian trade partner) and Israel launched a free-trade initiativeChina has been aware of the Israel’s long term economic viability, expanding bilateral trade from $50mn in 1992 – when diplomatic ties were established – to $10bn in 2014, aiming at $20bn in a few years. Bloomberg News suggests that the China-Israel synergy is a derivative of “Israel’s leading research and development intensity and China’s manufacturing leadership.”  Thus, China considers Israel a prime source of agricultural and irrigation technologies (e.g., a recent $300mn Israeli export of water technologies), required to sustain its urban and economic developments. In May, 2014, China’s Vice Premier, Liu Yandong, visited Israel with some 400 business and government officials.  China’s Internet giants, Renre and Tencent led a $102mn investment in Israel’s SingulariTeam Fund; China’s giant, Guangxi Wuzhou Pharmaceutical, invested $3mn in the Hebrew University’s technology transfer company, Integra;  Baidu, “China’s Google,” invested $3mn in Israel’s Pixellot; and, the electronic trade global giant, Alibaba, led a $5mn round of private placement by Israel’s Visualead.

 Microsoft has expanded its reliance on Israel’s brainpower, beyond its two major research and development centers, which have enhanced its global competitiveness, increased its exports and expanded its employment base. In January, 2015, Microsoft acquired Israel’s Equivio for $200mn, following its November, 2014 acquisition of Israel’s Aorato for $200mn. Currently, it negotiates the acquisition of Israel’s N-trig.

 During the first month of 2015, eight Israeli companies were acquired by global companies for $900mn: Amazon – Annapurna Labs ($360mn), Harman – Red Bend ($200mn), Dropbox – CloudOn ($100mn), Microsoft – Equivio ($200mn), etc.

 Google Chairman, Eric Schmidt’s, private Innovation Endeavors Fund, co-led an $18mn round of private placement in Israel’s Team8 Incubator of cyber security technologies, along with Cisco Investment, France’s Alcatel-Lucent, Bessemer Venture Partners and Marker Financial Advisors.

 The American Treetop Realty is following in the footsteps of nine US real estate companies and funds – led by Extell ($1bn) and Lightstone ($480mn) – with bonds traded on the Tel Aviv Stock Exchange, leveraging the growing capital market in Israel.

Notwithstanding Turkey‘s Erdogan’s visceral, anti-Israel policy,Israel-Turkey trade balance has surged from $2.6bn in 2009 to $5.6bn in 2014.

 Brazil has been a constant critic of Israel in the international arena, but Israel’s Elbit just won a $106mn bid to upgrade Brazil’s naval aircraft, which will be carried out by the San Antonio, Texas-based Elbit’s US subsidiary.

 Despite Britain‘s prominence in the anti-Israel BDS movement, Britain’s top betting site, William Hill negotiates the acquisition of Israel’s 888 for some $1bn.

 Irrespective of the BDS original meaning, Israel’s BDS features aBouncing, Developing and Surging technology and economy, reflecting the brainpower and tenacity of the Jewish State, which has benefitted the world at-large and the USA in particular.

Wishing you Shabbat Shalom and a gratifying weekend,

Yoram Ettinger, Jerusalem, “Second Thought: US-Israel Initiative” Facebook    Twitter    LinkedIn
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