The Giant Corporations That Nurtured Israel’s Success as a “Start-Up Nation” May Now Be Undermining It

In the past two decades, the Jewish state has produced numerous small companies specializing in innovative technology, bringing economic growth to the country and exporting new devices and software abroad. The most successful of these companies have been bought by large, multinational corporations, which have also been setting up their own research centers in Israel, hoping to tap into Israeli talent. But, explains Matthew Kalman, such international investment, while it has benefited the country in the short term, may be undermining its now-famous start-up ethos:

There is certainly evidence to suggest that the influx of multinational interest and investment is taking the fizz out of Israel’s start-up ecosystem. The number of start-ups founded each year is falling, while the number that close each year is rising. The total amount of capital raised by Israeli high-tech continues to climb, but the number of deals has fallen by 10 percent since 2015. . . .

[Furthermore], foreign firms don’t benefit the Israeli economy nearly as much as home-grown ones do. A recent trend has been for multinationals to buy Israeli companies and turn them into research-and-development branches. . . . Statistics show that for each employee of an Israeli high-tech manufacturer, two more local jobs are created. For each research-and-development center employee, [however], only one-third of another job is created. When a growing local company turns into a research-based subsidiary of a foreign corporation, then, those potential jobs are lost. So are any intellectual-property revenues and taxes that the independent local business might have generated. . . .

But the corporations won’t stop coming. That’s because they need Israel’s innovation. The converse is true as well, though: people with a start-up mentality need big organizations, says Saul Singer, one of the two authors of [the book] Start-Up Nation. “Start-ups are great at innovation, but it’s very hard for them to scale up,” he says. “Big companies are very good at scaling—but it’s hard for them to innovate.”

The Israel Innovation Authority, a branch of the Ministry of the Economy, is taking steps that could counteract some of these problems, while some Israel businessmen have begun initiatives of their own.

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More about: Israel & Zionism, Israeli economy, Israeli technology

Yasir Arafat’s Decades-Long Alliance with Iran and Its Consequences for Both Palestinians and Iranians

Jan. 18 2019

In 2002—at the height of the second intifada—the Israeli navy intercepted the Karina A, a Lebanese vessel carrying 50 tons of Iranian arms to the Palestine Liberation Organization (PLO). But Yasir Arafat’s relationship with the Islamic Republic goes much farther back, to before its founding in 1979. The terrorist leader had forged ties with followers of Ayatollah Ruhollah Khomeini that grew especially strong in the years when Lebanon became a base of operations both for Iranian opponents of the shah and for the PLO itself. Tony Badran writes:

The relationship between the Iranian revolutionary factions and the Palestinians began in the late 1960s, in parallel with Arafat’s own rise in preeminence within the PLO. . . . [D]uring the 1970s, Lebanon became the site where the major part of the Iranian revolutionaries’ encounter with the Palestinians played out. . . .

The number of guerrillas that trained in Lebanon with the Palestinians was not particularly large. But the Iranian cadres in Lebanon learned useful skills and procured weapons and equipment, which they smuggled back into Iran. . . . The PLO established close working ties with the Khomeinist faction. . . . [W]orking [especially] closely with the PLO [was] Mohammad Montazeri, son of the senior cleric Ayatollah Hossein-Ali Montazeri and a militant who had a leading role in developing the idea of establishing the Islamic Revolutionary Guard Corps (IRGC) once the revolution was won.

The Lebanese terrorist and PLO operative Anis Naccache, who coordinated with [the] Iranian revolutionaries, . . . takes personal credit for the idea. Naccache claims that Jalaleddin Farsi, [a leading Iranian revolutionary], approached him specifically and asked him directly to draft the plan to form the main pillar of the Khomeinist regime. The formation of the IRGC may well be the greatest single contribution that the PLO made to the Iranian revolution. . . .

Arafat’s fantasy of pulling the strings and balancing the Iranians and the Arabs in a grand anti-Israel camp of regional states never stood much of a chance. However, his wish to see Iran back the Palestinian armed struggle is now a fact, as Tehran has effectively become the principal, if not the only, sponsor of the Palestinian military option though its direct sponsorship of Islamic Jihad and its sustaining strategic and organizational ties with Hamas. By forging ties with the Khomeinists, Arafat unwittingly helped to achieve the very opposite of his dream. Iran has turned [two] Palestinian factions into its proxies, and the PLO has been relegated to the regional sidelines.

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More about: Hamas, History & Ideas, Iran, Lebanon, PLO, Yasir Arafat