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High time for hi-tech Israelis and Palestinians

Israel has earned her nickname the start-up nation, due to her vibrant entrepreneurship in hi-tech

Yossi Mekelberg

Published: Updated:

In the heat of the peace negotiations between the Israelis and Palestinians, while the sides are locking horns over some of their fundamental disagreements, the economic benefits of a peace agreement for both peoples seems to be overlooked. Yet, any peace agreement must also envision the creation of normal life beyond the conflict in which economic prosperity for both people is of prime importance. Clearly the Israeli and Palestinian economies can only benefit enormously from bringing the conflict to an end. Not surprisingly, United States Secretary of State John Kerry devoted a substantial portion of his speech in the World Economic Summit in Davos to talking about his peace efforts. He outlined his vision where a “…Jewish state of Israel and the Arab state of Palestine can develop into an international hub for technology, for trade [and] tourism.” Economic development cannot and should not be a substitute for resolving the core disagreements between the sides. Nevertheless, it can help to mobilise support on the path to a peace agreement, not to mention a major source of guaranteeing the long term interests of both people in protecting and maintaining a peace process.

One of the ironies of the two state solution formula is that it might result in two separate nation-states, but economically it is not beyond the realm of possibility to envisage an almost single economic unit, which would benefit both people and economies. In achieving this vision, the hi-tech industry can be a prime source of job creation and wealth by bridging the gap between Israelis and Palestinians, and contributing to the integration of Arab Israelis into Israeli society.

Start-up nation

Israel has earned her nickname the start-up nation, due to her vibrant entrepreneurship in hi-tech, which resulted in her becoming second only to California in the number of start-up companies per-capita. Alas, the Arab community in Israel, together with the Jewish ultra-orthodox, is the fastest growing community in Israeli society, but has hardly participated in the country’s hi-tech revolution, which is the most the most vibrant and financially rewarding sector in the economy. Israeli leaders and captains of industry admit that Israeli Arabs are discriminated and that their entry into lucrative jobs is virtually blocked. Even Naftali Bennett, the Israel economy minister, who is known for his hawkish views as a leader of the right wing Habayit Hayehudi party, recently urged the hi-tech industry to refrain from discriminating against young Arabs in their hiring process. He was quoted as saying, “Let’s be honest, discrimination against Arabs exists in Israel… Are things harder for young Arabs than young Jews? Yes.” With the technology sector facing a shortage of engineers and other skilled professionals, companies who ignore Israeli Arab – 20 percent of Israel’s population — do so at their own peril.

The Israeli hi-tech sector is impressive by any international standard. For this success story to continue it needs to reach out to young Arab Israeli citizens

Yossi Mekelberg

This obviously undermines the Arab population in Israel, who are supposedly equal citizens by law, though the daily reality of their life is very different. Moreover, it is also a big loss for the economy as a whole. The hi-tech industry is, by and large, a very young one, which is in constant search of young talent, and entices new recruits through better remuneration than in other sectors of the economy. According to the Israeli business daily Globes, in 2013 there was a 52 percent rise in demand for mobile and web developers, which led to an average increase in salary well above inflation. The figures also show that in the hi-tech industry youth equates employment. The Israeli experience in hi-tech shows that workers aged 27-30 find a new job within five weeks, compared to an average of nine weeks for the 35-38. At a time in which youth unemployment worldwide is endemic and poses a real threat to social and political stability, the hi-tech can relieve some of these pressures. Regretfully, Arab youth inside Israel or the occupied territories hardly enjoy these opportunities and prosperity. One major reason for this is that the number of Arab students in Israel, who study science and technology, is relatively low in comparison to their Jewish counterparts. Even worse, according to Bennet himself, “Only 2 percent of young [Arabs] who learn computer programming are employed by companies with Jewish CEOs… That’s crazy.” There is an obvious unwillingness to employ Arabs by Jewish businesses.

Impressive by any standard

The Israeli hi-tech sector is impressive by any international standard. Israeli start-up companies are leading worldwide innovations and later are traded on the global financial markets, or are bought by foreign investors for many hundreds of millions of dollars. For this success story to continue it needs to reach out to young Arab Israeli citizens for its own sake, and also for the sake of integrating the Arab minority in Israeli society as equal citizens. This will contribute to the reduction of the higher than average level of poverty among the Arab Israelis, and increase of their standard of living. Technological education and employment creates the opportunities many of them long for, and can become a key leveller in the Israeli society. It will produce a work environment in which success is based on merit and not religious or ethnic origins, which is bound to remove many of the barriers between Jews and Arabs in the Israeli society.

But why stop there? Such a change can be just a precursor for things to come in the economic relationships between Israel and an independent Palestinian state, serving as a major element to building a peaceful coexistence. Forbes magazine revealed last summer, that Israeli hi-tech companies or Israeli subsidiaries of American companies were already training and investing in more than 300 Palestinian technology firms, as well as providing employment for around 4,500 people. It is expected that in the near future more money will be invested in the occupied West Bank in this sector. This potential economic transformation should come with two caveats. First, it is not and will never be instead of the political and civil rights of the Arabs citizens living inside Israel proper, or the right for self-determination and human rights of those who live in the occupied territories. It can serve as an accelerator and inducement for integration on one side of the green line and peace agreement with Palestinians on the other side of the border, but not as a substitute. Second, it also requires social changes among some segments of the Palestinian society in their attitude towards the modernity, including employment in the hi-tech sector, that at times represent a threat to more traditional values.

Interestingly enough, there is broad agreement that hi-tech can have an immense impact on the relationship between Israelis and Palestinians, but not enough is done to make it a reality. It can change the past employment patterns, which saw the Arabs as a merely cheap labor to perform menial jobs, a perspective which added to national-religious also socio-economic tensions. Joining the cutting-edge technological journey will be an important step in changing the discourse between the Israelis and Palestinians, to one based more on equality and respect.

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Yossi Mekelberg is an Associate Fellow at the Middle East and North Africa Program at the Royal Institute of International Affairs, Chatham House, where he is involved with projects and advisory work on conflict resolution, including Track II negotiations. He is also the Director of the International Relations and Social Sciences Program at Regent’s University in London, where he has taught since 1996. Previously, he was teaching at King’s College London and Tel Aviv University. Mekelberg’s fields of interest are international relations theory, international politics of the Middle East, human rights, and international relations and revolutions. He is a member of the London Committee of Human Rights Watch, serving on the Advocacy and Outreach committee. Mekelberg is a regular contributor to the international media on a wide range of international issues and you can find him on Twitter @YMekelberg.

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