2010: The Year We Made Contracts

In 2010, Arthur C. Clarke’s sequel to the classic 1968 film 2001: A Space Odyssey, the Soviet Union still exists, astronauts are orbiting Jupiter, and Earthlings encounter extraterrestrial life. Well it’s 2010, the Soviet Union is long gone, we still haven’t made it past the moon, and the closest we’ve come to bumping into ET is seeing Lady Gaga at MTV’s Video Music Awards.

One other outcome 2010 failed to predict was the ascendance of Israel’s space science industry.

Fast on the heels of our prediction that there appears to be a bright future for Israeli space science, comes word from Jerusalem that Israel aims to become a satellite superpower, focusing on “mini satellites” and “nano satellites”.

Professor Haim Eshed, head of the Defense Ministry’s Space Division thinks that starting in 2015, Israel can capture at least $12.5Billion or 5% of the $250Billion annual international space market. That would represent a 500% increase over what the entire industry has sold during the last 20 years. It appears the sky really is the limit for Israeli space sciences.

To Infinity & Beyond

It will likely come as a surprise to many people that little Israel was recently ranked the world’s #2 country in space sciences based upon a combination of papers published and cited. It’s quite possible that Israel would’ve been ranked #1, but Dan Blumberg, head of the department of geography and environmental development at Ben-Gurion University of the Negev in Beersheba states that university-based researchers are heavily dependent on the country’s military industries and satellite programs. Military secrecy, however, prevents publication of much of the research done through military–academic cooperation, so as Dan says,

“We can’t publish and we can’t present our results at scientific conferences”.

Nonetheless, Israel is one of only 9 “launch-capable” countries in the world with its own independent space satellite production and launching abilities.

So it wasn’t much of a surprise when NASA Administrator Charles Bolden met with Science and Technology Minister Daniel Hershkowitz early this week to discuss how NASA can leverage Israel’s advancements in light satellites, hyperspectral cameras, and satellite antennas for use in mapping out Venus. At the same time, NASA announced Israeli data center connectivity solution provider Mellanox had been tapped for its high-performance InifiniBand products which will be used in the NASA Center for Climate Simulation.

It would seem there’s a bright future for the Israeli space science industry, and if the experiences of the U.S. space industry are any indication, a trickle down effect of commercialized space technology should soon be benefiting other industries in Israel.

Israel: Shiny Happy People?

Last month, two unrelated stories came out in close enough proximity to overlap each other in interesting juxtaposition.

In one story, the Israeli Ministry of Foreign Affairs announced a new branding initiative for the entire country. Ido Aharoni, the head of the Ministry’s “Brand Israel” project announced that “Creative Energy” is the “prism through which brand experts want the world to look at Brand Israel.” Though Aharoni referred to this as a strategy and not a slogan, I think it actually makes a very good slogan or tag line to describe a primary attribute common to Israel, Israelis, and Jews. As a people, a culture, an ethnoreligious group, and of course a nation state, “creative energy” succinctly summarizes a major aspect of our nature and how we’ve accomplished so much.

What other phrase so well describes a people who gave the world the concept of one God with an accompanying system of ethics and values that have become a pillar of Western Civilization!

What other phrase so well captures the essence of a people who comprise less than 1/24 of 1% of the world’s population, yet have won an impressively disproportionate 1 out of every 5 Nobel Prizes ever awarded!

What other phrase so well epitomizes the hyper level of innovation coming out of Israel that has given the world such well-known technologies as cell phones, voicemail, instant messaging, ingestible pill cameras, and much, much more.

The second story was about a Gallup World Poll that surveyed people globally to determine which countries were the world’s happiest. Now we all know that Disneyland has long claimed to be THE happiest place on earth, but surprisingly not far behind was Israel, tied with Canada, Australia, and Switzerland for the 8th happiest country in the world.

This may very well come as a shock to Israel’s enemies and detractors who have long predicted (and wished for) the country’s demise. Contrary to the worst aspersions cast by Israel haters and despite the existential threat posed by Iran, Hezbollah, the Palestinians and others, Israelis are just as happy as people living in peaceful, advanced nations with very high standards of living.

Conventional wisdom has long surmised that creativity is predicated upon misery. At least that seems true in the artistic community (ever listen to country western music?). Israel however, is living proof that happiness and creativity can not only co-exist, but even drive each other to higher levels.

Spotlight on Israeli Innovation: The Simon

Welcome to a new recurring feature on the SolutionBridge blog – Spotlight on Israeli Innovation. These brief postings will focus on an ingenious product or technology from Israel that’s worth a closer peek.

Our first spotlight looks at a clever rifle grenade called the “Simon” which can safely breach just about any door using an official NATO 5.56mm rifle from up to 30 yards away. It’s a simple, elegant solution for urban warfare combatants and police SWAT units. In 2005, the Simon was given a U.S. Army award as a top 10 best invention. Check out the video and see for yourself how this Israeli innovation works.

Accounting by Israeli subsidiaries operating in the U.S.

The other day I was having a discussion with Oved Haklay (pictured below), a CPA specializing in providing bookkeeping and accounting services for subsidiaries of Israeli companies operating in the United States. Since more and more Israeli companies are expanding operations beyond Israel and into the U.S., I thought it was worth sharing with our readers some valuable advice Oved has for these firms:

It has become a popular trend for Israeli companies to establish subsidiary companies in the United States. However, these companies often discover that it isn’t so easy to set up a bookkeeping system in the U.S. that is reliable, available, and inexpensive.

Israeli companies waste valuable management time dealing with bookkeeping issues such as banks, customers and invoices, instead of focusing on their main goal – producing and selling. They waste time searching for a bookkeeper, and then waste more time supervising him.

These companies could alleviate many of these headaches by simply using an American accounting firm to provide such services, including back-office and financial services needed by companies operating in the U.S.

To make the process easier for U.S.-based Israeli subsidiaries, I strongly recommend using an Israeli firm to supervise the American accounting firm. The biggest advantage of this type of arrangement is that it provides the subsidiary with the services it needs and tailored to its activities, while ensuring full reliability.

This form of activity is recommended primarily for Israeli companies just starting out in the U.S.

Oved Haklay, CPA
Israel USA Accountancy

For more questions about the nuances of U.S. vs. Israeli accounting, please contact Oved directly:
ohaklay@hotmail.com.

“Think what we could do if the world were not against us.”

Thus spoke Rabbi Shlomo Aviner at celebrations for modern Israel’s 62nd birthday. Profound words indeed, which got me wondering, what would Israel be capable of if so many in the world were not so viscerally opposed to its very existence?

The article where the Rabbi was quoted reiterates what many of us already know about Israel today, that it is

“…a world leader in society, technology medicine and dozens of other fields.”

In and of itself this alone would be impressive enough, but is all the more awe-inspiring given the hardships Israelis have endured due to their neighbor’s belligerence and refusal to accept a Jewish state in their midst.

We’ve seen proof however that when Arabs/Muslims set aside their hostilities towards Israel, and join hands in peace, the commercial results at least can be extraordinary. An excellent example is the Century Standard Textile plant in Jordan, which according to this article is having a hard time keeping up with demand thanks to its business relationship with Israel and is

“…a success story, which other Arabs should learn from.”

The possibilities though, are much greater. Combining Israeli know-how and innovation with Arab/Muslim capital could unleash a breathtaking level of growth in gross domestic product for the entire region. As was the case when Jews began resettling pre-independence Israel, economic opportunities could once again flourish for Arabs from surrounding lands. If only Israel’s Arab enemies would put down their suicide bomber vests and pick up their checkbooks.

With or without Arab/Muslim cooperation, Israel’s economy is on track to continue its strong growth and even possibly reach a goal set by Benjamin Netanyahu when he was the nation’s finance minister of joining the world’s top 10 or 12 richest economies. Amazing as that possibility is, the words of Rabbi Aviner gives us pause to wonder how much better things could still be.

Israel’s Importance To Modern Civilization

The news about Iran’s nuclear program continues to get grimmer. Today’s announcement by that country’s leadership that it’s unveiled a more advanced 3rd generation of centrifuges was immediately labeled as proof of its “nefarious intentions” by the U.S. State Department.

The State Department says that Iran’s own pronouncements on its nuclear program are providing convincing evidence that the enrichment effort is weapons related despite Tehran’s professions of peaceful intent.

Iranian President Mahmoud Ahmadinejad has repeatedly expressed his anti-Semitic and anti-Israel views over the years and made no effort at hiding his desire to destroy the “zionist regime”. Most agree that nuclear weapons in the hands of such a megalomaniac would be a catastrophe. But catastrophic for who?

Israel, of course, pops to mind first. Some Sunni Muslim rival nations like Saudi Arabia too. Western nations as well, especially if Iran transferred nuclear weapons to terrorist groups like Al Qaeda.

Just how catastrophic though, perhaps hasn’t been completely realized. Contrary to the beliefs of some, the defenestration of Israel from the Middle East by Iranian weapons of mass destruction could actually have much graver ramifications for Western Civilization and the modern world than previously considered.

In two books that came out during the latter half of 2009, The Israel Test by George Gilder and Start-Up Nation by Dan Senor and Saul Singer, its authors enumerate an impressive list of leading technology companies that rely on Israeli R&D teams for much of their firm’s strategic product development. Organizations like Intel, Microsoft, Verizon, Cisco and many others depend heavily on Israeli know-how for some of their most critical products and services. In fact, these books both illuminate the striking revelation that many of the advances consumers enjoyed in recent years in hi-tech, bio-tech, and clean-tech originated in Israel. As George Gilder states:

Israel is at the forefront of the next generation of technology and on the front lines of a new racial war against capitalism and Jewish individuality and genius. Israel is not a peripheral player or a superficial issue of Middle Eastern history and politics. It is at the center of the sphere.

So what would happen to us in the Western world, we who are so profoundly dependent on this leading edge technology for some of the most fundamental aspects of our lives, if (God-forbid) the Iranians made good on their threats? It’s tempting to think this problem is half a world away, and we’re safely esconced far from it, but history has proven time and again that Jews, and today Israel, are the world’s canaries in the coal mine. If they’re in trouble, it’s only a matter of time before we are too.

Innovation Nation Roundtable

At AIPAC’s 2010 Policy Conference, an “Innovation Nation Roundtable” was moderated by Dan Senor, co-author of the book Start-up Nation: The Story of Israel’s Economic Miracle.  Joining Dan on the panel were Meir Brand, Google’s Regional Director for Israel, Greece & South Africa and Daniel Zajfman, President of the Weizmann Institute.

The panel discusses innovation in Israel, what makes Israeli innovation unique, and how the innovations coming out of Israel benefit the entire world, or as Meir Brand says, “Innovation for the sake of prosperity of humankind”.

Daniel Zajfman relates an interesting discussion he once had with the President of Germany about the difference between German & Israeli scientists.  Playing it safe, he diplomatically focused instead on what they have in common, suggesting each nation conducts science the same way its citizens drive.  “In science and technology,” he says, “not stopping at the red light is a huge advantage.”

This leads Daniel to ask a profound rhetorical question, “How do you make people safe on the road, and unsafe, in the good sense of the term, in science and technology?”  He then posits that this has everything to do with education, and encouraging curiosity.

Is education enough though?

In Dan Senor’s book, he points out that Israel’s academic leadership has actually receded (according to economist Dan Ben-David), and in fact there are many other reasons given for Israel being so innovative:

• Percentage of economy spent on R&D (Israel is a world leader)
• Number of engineers & scientists per capita (Israel has more than any other country)
• Volume of scientific papers produced per capita (Israel has more than any other country)
• Percentage of population that is university-educated (Israel is a world leader)
• Ability to attract venture capital (Israel is a world leader)

Then there are cultural, political, even religious factors that contribute to innovation leadership.  The ability for a person, much less an entire nation, to innovate is not so easily replicated.  If true genius is scarce, then true innovation on a national scale must be the rarest gem of all.

What other factors do you think makes Israel such a leader in innovation?

SolutionBridge is back!

We’ve been away for a while, but we’re back with an entirely new focus, and hopefully better than ever.  Some of you may recall SolutionBridge was previously Southern California’s leading Lotus Notes/Domino consulting firm.  In the intervening years, we’ve gone through a mid-life career change.

Our new focus is (as our browser window frame says) “Helping Israeli Firms Succeed In America”.  One reason SolutionBridge re-oriented itself to focus on strategic business development consulting for Israeli companies is because of the resurgent Israeli economy, which appears to be the first to emerge from the worldwide recession and is on track for solid growth in 2010.  Indeed, Israel, the only country to transform itself from a 3rd-world to a 1st-world nation, is  according to the NY Times “…in the final stages of accession to the exclusive club of advanced countries, the Organization for Economic Cooperation and Development.”

With so many leading-edge Israeli companies looking to export their innovative products and services abroad, we know demand will be strong for help in breaking through to the U.S. market, and that’s where SolutionBridge plans to be a valuable resource.

If you know of any Israeli firms who want to come to America, please refer them to us.  We can be their bridge into the U.S. market, and help get them off to a great start!