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EconOptimisim

Start-Ups Despite Separation

While no where near Palo Alto levels, both Palestine and Israel have entered the start-up technology arena.  There may be only one Jerusalem, but creating a tech company on one side of the wall seems to encourage tech on the other.

The New York Times  recently reported on the business environment in Ramallah, a city in the West bank and headquarters of the Palestinian authority.  Most tech business, the Times reports between the two involves Israel outsourcing to Palestine.  As tech increases in Israel, its outsourcing needs will increase, bringing business into Palestine.  Reliable outsourcing allows Israeli businesses to specialize, which then spurs more business opportunities.

Such opportunities seem likely to only increase as the Arab world continues to demand technology goods and services.  Western start-ups, unfamiliar with the area’s cultural needs, have not met this demand but West Bank start-ups likely can.

In an effort to meet this market, the Times reported, a company called LionHeart formed.  LionHeart, a Palestinian company, works with Israelis to teach Palestinians entrepreneurial skills has developed.  Such a company implies that both parties see a benefit to increasing the region’s overall skill-set, regardless of citizenship.

Some amount of cooperation between Israelis and Palestinians, where both parties benefit: earning a wage, creating a product, sets a positive precedent.  What is truly remarkable is that the reams of permits, physical barriers, and constant threat of violence cannot stop the economic cooperation.

Instead, profit motivates behavior that seems overly optimistic to even suggest.  The Times article describes Israelis and Palestinians conducting a business meeting despite an attack.  Considering that problems with wifi can derail an American business meeting and that a snide comment can halt peace talks, it is remarkable that the promise of new business makes the risk worthwhile.

In this context, “angel investors” becomes less of a cute Silicon Valley term and more  of a concept worth considering beyond the ROI.  If business can drive cooperation seemingly unachievable by other means, then investment into business, while hardly altruistic, is indeed angelic.  Cooperation based on profit may not warrant a Nobel Peace Prize, but a chance for peace far outstrips any international prize and provides a great ROI to the entire world.

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