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Commentary;
Managing Partner and co-founder of NGN Capital Ken Abramowitz spoke out sentiments at the Jerusalem conference that many of us have known for quite some time when he contrasted Israel’s booming, “vibrant business climate” and its high level of competence with Israel’s abysmally “low quality” of national leadership and governance. MB
Venture Capitalist Slams Israeli Government, by Avi Tuchmayer (Israel National News)
Excerpts;
Israel has emerged in recent years as a world leader in a variety of industries, from technology to outsourcing to homeland security and more. But one US-based investor told the Jerusalem Conference Tuesday the country’s economic success has come despite an alarming level of governance.
“Israel boasts many advantages for foreign investors,” said Ken Abramowitz, Managing Partner and co-founder of NGN Capital, “including terrific universities, a wealth of experienced managers, quality engineers and scientists, well-trained physicians and more. But I have never seen a lower caliber of government than you have in this country. Your foreign ministry is staffed with low quality people and a low quality leader (Foreign Minister Tzipi Livni). The Supreme Court is a collection of far-left activists who then appoint more far-left activists to join them on the bench. It feels like all the smart people in the country have started their own companies, and the rest have been left to run the country.”
In spite of government hindrances, Abramowitz praised Israel for what some have called a “vibrant business climate” and said the country is one of the top three countries in the world for new pharmaceutical companies, start-ups that successfully list on international stock exchanges, and added that Israel boasts one of the world’s highest ratios of start-up investment per capita. He also told the packed audience his firm plans to raise $350 million by the end of 2008, and that the fund plans to raise its investment in Israel from two percent to ten percent, in a range of start-up companies that will include medical firms and more.
While heaping praise on Israel, Abramowitz cautioned that too much venture capital money comes from abroad, and he encouraged wealthy Israelis and pension funds to do more to cement the local economy. In addition, he said there are too few local giants ready to purchase start-up companies for what he called “big money.”
He also called for Israel to push annual growth rates from five to ten percent, saying the additional cash would help prevent exorbitant gaps between rich and poor, and would ensure appropriate funding levels for social and military programs.
United Jerusalem
Jerusalem’s role as the undisputed capital of Israel and the Jewish people also played a role in the session. A majority of Israelis and Jews around the world may oppose the re-division of Jerusalem, but Session Chairman Harvey Werblowsky, cautioned that economic development in the capital is the surest way to ensure the city remains united under Israeli sovereignty.
“It’s simple, really: The stronger Jerusalem is as an economic center, the harder it would be to divide the city,” he said.
Werblowsky also said foreign businesspeople such as IDT chief Howard Jonas have looked to remove economic barriers for Americans who want to make aliyah while at the same time securing top-notch employees for a global market. He said the trend would continue in Jerusalem and the rest of the country, and that the technology and outsourcing sectors have made Israel a major force in the global economy.
Hareidi Women: Driving Employment and Growth
A major focus of the session concentrated on developments in the hareidi-religious community. Eli Kazhdan, CEO of Citibook Services, said his company has built outsourcing plants in hareidi-religious towns such as Modi’in Ilite (Kiryat Sefer) and Beitar Ilite, providing hundreds of jobs for observant women in an atmosphere that conforms to hareidi-religious sensibilities and expectations.