Tapping the Potential—Takeaways from the Tel Aviv Business Forum

Last month was replete with networking and new business opportunities, even more so than usual. The first stop—representing Monterail among the 250 companies participating in the 2018 Polish-Israeli Business Forum in Tel Aviv. The event was organized by a number of Polish and Israeli business entities, Ministry of Entrepreneurship and Technology with assistance from its’ head—Minister Mrs. Jadwiga Emilewicz.

Why did I decide to attend? To meet other entrepreneurs and representatives from Polish technology parks and government institutions. To discover inspiring start-ups from a variety of fields, including ICT, spaceflight, fintech, healthcare, and pharmaceutics, operating in the most robust European markets. But above all, I attended the Forum to build and maintain partnerships, as the past eight years spent in services really drove home the incredible importance of relationships in the industry.

Moreover, taking a closer look at the tech industry inside Silicon Wadi also provided me with some food for thought. And I believe some of these insights are definitely worth sharing.

So if questions like “Is doing business in the Middle East feasible?” or “How can Poland best cooperate with Israel?” have ever crossed your mind, do read on.

Israel as a Start-Up Nation

Israel is the second biggest technology hub in the world, losing only to California’s Silicon Valley, so calling it a “start-up nation” is far from an overstatement. According to Mapped in Israel, there are over 1,500 startups in central Tel Aviv (yup, just in that one city) and its’ tech ecosystem is valued around $22 billion. Observing the Tel Aviv business scene in full bloom was really quite impressive.

A number of factors contribute to its flourishing state, including:

• A focus on R&D—Israel is the clear leader when it comes to the number of people engaged in R&D per million citizens, according to U.S. News Research, and trailed only South Korea in the “R&D intensity” category according to Bloomberg Innovation Ranking (2016). Israel invest 4% of its total GDP in R&D, mainly via the Innovation Authority who supports more than 650 companies annually,
• Government support—Israel offers a number of support programs for Israeli exporters, including Smart Money, and has forty-five trade offices around the globe. 88 million NIS were distributed in 2017 under the Foreign Trade Administration in the Ministry of Economy to assist Israeli companies in boosting export,
• VC Funds—a total of $4.8 billion was invested in Israeli high-tech companies in 2016 and that number has been steadily increasing since. Almost 100 firms have already invested in that market, including Bessemer Venture Partners whose portfolio includes brands such as Skype, OLX, Vision Express, and Twitch.
• Military background—mandatory service in the IDF and intelligence units (among the most technologically advanced units in the world) naturally drive youth into start-ups and high-tech fields. Years spent in the army foster decisiveness and responsibility both of which are essential entrepreneur traits.
• A relaxed approach—“In Israel, you execute first. You say ‘I can deliver this’ and you think about how to do it afterwards.” This notorious quote from Eynat Guez reflects a common Israeli attitude. They focus more on the idea and its fast development rather than careful business planning. In addition, failure is not perceived in Israel as a disaster. The common belief is that one should learn from failures and only those who dare to take risk, can succeed.
• Strong academia—including technology transfer offices of all Israeli universities. These units help commercialize the IPs of their supported startups and researchers. 

 

Ties Between Polish and Israeli Markets

Given the cultural differences, intertwined histories, or the recent legal controversies surrounding the Polish National Remembrance Institute, one could think that Poles and Israelis might have trouble finding common ground. At the Tel Aviv Business Forum, however, I saw firsthand that ties between the two nations are not only possible, but thriving. Here’s why:

Shir Slutzky, Economic Counsellor at the Israeli Embassy in Warsaw, promoted an attractive initiative aimed at Polish businesses:

The main goals of the Israeli Trade and Economic Mission to Poland are promoting Israeli export to Poland and creating business ties between Polish and Israeli businesses. Therefore, among other activities and events we initiate and organize tailor-made ‘scouting visits’ to Israel for Polish corporates in different industries— cybersecurity, fintech, health tech etc. to explore the Israeli technologies. The Israeli companies and startups are chosen according to the Polish company’s wish list. The agenda is organized by us together with our Israeli counterparts. In addition to that, we organize every year business delegations of Israeli companies to Poland, “road shows” and business forums.

According to Tal Harmelin, Director at Startup Nation Central:

The flow of people between Poland and Israel has increased three-, fourfold since new, direct flights have been introduced. At the time, our trade relations were based primarily on FMCG trade. In 2016, however, Startup Nation struck up a relationship with the with Polish ICT industry and the scope of these relations broadened to include collaborative innovation efforts and immersion between startups and corporations. The business value from services and ICT is on the table.

Bartłomiej Pawlak, Board Member at PFR, encouraged Israeli firms to open businesses in Poland via PFR mediation and with support from EU funds. 

 

Besides my personal observations from Tel Aviv, there is every indication that Polish-Israeli cooperation will be growing even closer in the future:

Poland's trade with Israel exceeded $1.02 billion (10% YoY increase) and exports from Poland to Israel rose by 6.3% just last year,

• On June 18, PAIH opened one of its 70 worldwide Trade Offices in Tel Aviv to facilitate and strengthen Polish business presence on the Israeli market and attract Israeli investors to Poland,
• From 2018, all entrepreneurs operating is Poland can take advantage of a tax cut for R&D efforts which makes for a great incentive for Israeli businesses,
• Israeli companies began making VC investments in Poland two years ago and now see the country as a rising star in Central and Eastern Europe. If the VC market in Israel is in full bloom—why not merge these VC funds with Polish government support?
• Polish banks are purchasing fintech solutions from Israel, while LOT Polish Airlines, Poland’s flag carrier, turned to Israel to procure airport security solutions,
• Israel suffers from a shortage of skilled personnel in the high-tech sector, especially in the Internet and software industries, as the number of computer science graduates has been dropping significantly over the past decade—this dearth of talent, however, means open doors for Polish IT experts.

Israel knows how to build global companies and Poland is the 6th biggest economy in the EU. There’s a lot we can learn from each other.

Final Words

One passage from the official appearance by Mrs. Jadwiga Emilewicz, the Polish Minister of Entrepreneurship and Technology, really stuck in my head:

It was the most significant Polish-Israeli business event that has happened so far. What makes it even more significant, is the fact that Polish and Israeli entrepreneurs had an opportunity to meet and connect. And they can offer a lot to each other. What is particularly promising is the willingness of both to cooperate jointly in the field of technology.

Israel is already a Start-Up Nation and I genuinely believe that Poland is well on its way to claim the title very soon.

Seeing photos displayed in the background during presentations, proved to me we are not so different. I could hardly tell which city was Tel Aviv and which was Warsaw.

If you’re searching for the right place to build your “the next big thing,” Israel seems to be the answer. I can’t wait to observe these two countries strengthening their partnership further.

One last thought—every time I visit this part of the world, my appreciation for the locals’ love of vegan food grows, there’s delicious hummus absolutely everywhere. Just as good as the one my girlfriend makes back home.