Executives and Entrepreneurs Offer Insight to Israel’s Economic Success at Sy Syms Event
The line is nearly as old as the State of Israel itself: How do you make a small fortune in Israel? Start with a big one.
However today, in an era of widespread global recession, Israel’s soaring economy is no joke. With a low unemployment rate, 10 times more companies being created per capita than the United States, and more businesses traded on NASDAQ stock exchange than any country except the United States and China, Israel offers more opportunities to make a small fortune—or a big one—than ever before. At an October 24 event presented by Yeshiva University’s Sy Syms School of Business titled “Understanding Israeli Entrepreneurial Success,” veteran Israeli CEOs Jonathan Medved and Nadav Kidron offered American Jews an updated perspective on their homeland.
“We see Israel as a place we go to be inspired, to pursue spiritual opportunities we may not find elsewhere,” said Charlie Harary, clinical professor of management and entrepreneurship at Sy Syms and director of the school’s new Leading with Meaning initiative, which organized the event. “Few of us really understand that Israel also plays a big role in the world’s economy.”
“We say, ‘Support Israel because of shared values, support Israel because we’re a democracy, support Israel because it makes military sense, we have shared enemies,’ ” said Medved, a leading high-tech venture capitalist in Israel and founder of crowdfunding organization OurCrowd. “But now Israel is coming to the rescue just as the U.S. needs new jobs and new economic ideas, and companies are finding their innovation and next steps in Israel.”
According to Medved, those companies include a host of big names, such as Apple, General Electric and Berkshire Hathaway, which have bought companies and built research and development centers in Israel. He added that Israel has been named the safest stock market in the Western world to invest in over the last 10 years by the Bloomberg Riskless Return Ranking. “’Safe’ is not a word you normally associate with Israel,” said Medved, “but if you look at the results, we’ve had over 160 percent total return over the last decade, and we’re one of the few countries in the world whose Standard & Poor’s credit rating has gone up recently.”
Starting with his own experience in the 1980s, Medved detailed the history of venture capital in Israel, explaining how the 1992 government program Yozma spurred on a pallid entrepreneurial market by offering matching funds to investors. “Today there are 50 or 60 venture capital funds that manage a total of $15 billion in Israel,” said Medved. He also noted that many recent world-changing innovations, ranging from the Amazon Kindle software to dairy farm technologies that service India and China, originated in Israel.
Oramed Pharmaceuticals CEO Kidron took up that thread in his presentation, which introduced the audience to Israeli companies he felt would make a strong impact on the market and change the way people live on a daily basis. That included names like Powermat, whose charging system for cell phones and laptops would minimize the limitations of electricity, and Watergen, which uses the humidity in the air to create drinkable water, as well as inventions such as a flying ambulance and a device that enable paraplegics to walk. Like Medved, Kidron also talked about his own career path, focusing on how he had marketed the new discovery that insulin could be taken in an oral form.
The key to their successes? According to Medved, it’s all about risk.
“The answer is not the yiddishe kop,” he said. “That’s necessary, but not sufficient—we have no monopoly on brains. But no people in the world and no country in the world knows risk the way we know risk. When you wake up every morning to face the threat of extinction, the risk involved in setting up a company does not compare.” He added that early training in the army also created an Israeli culture that was undaunted by failure. “Our kids learn that if you fail, you move on and you keep trying,” he said.
In a panel session following Medved’s and Kidron’s presentations, the two CEOs took questions from the audience along with Sy Syms graduate J. J. Sussman, who is a partner at Lemon Tree Associates; Avram Metzger, a principal in investment management tax at PricewaterhouseCoopers, which hosted the event; and Nili Shalev, Israel’s economic minister to North America. The packed auditorium included undergraduates, alumni and students in Sy Syms’ Masters in Accounting and Executive Masters in Business Administration programs, and questions varied from, “How can I plan for a career in Israel while still in college?” to “If I’m not at a stage in life where I can move to Israel, how can I still be involved in its economy?” and even “How can I raise venture capital funds for my own company?”
“Fifteen years ago, I was in your seat, on the track to becoming a partner but torn by my desire to live in Israel,” Sussman told students. “The answer is to get on a plane and go. There are 3,000 YU alumni already in Israel who have done the same thing you’ll be doing—the networking is tremendous.”
For Benjamin Lugassi, a senior majoring in economics at Yeshiva College, these observations were critical as he considered the future of his own career in business. “I’m an entrepreneur myself and am already starting a few businesses that I want to bring to Israel,” he said. “I wanted to hear if my ideas could work in Israel and if I could live there. Now it seems like the next step is just figuring out who can help me achieve that goal.”
The event was sponsored by Avram and Sharon Blumenthal in memory of Avram’s parents, Bernard and May Blumenthal z”l.