Building a better future together

In a place made famous in the Bible – Nazareth – a new form of inspiration is taking place: a working model for coexistence between Jews and Arabs based on technology and entrepreneurship. It was just under two years ago …

In a place made famous in the Bible – Nazareth – a new form of inspiration is taking place: a working model for coexistence between Jews and Arabs based on technology and entrepreneurship.

It was just under two years ago that five successful Israeli-Arab businessmen along with a Jewish Israeli high-tech entrepreneur contributed $1 million of seed capital to start a government subsidized technological incubator. They named it New Generation Technology or NGT.

NGT, subsidized and supported by Israel’s Ministry of Industry and Trade, had one mission: to provide fledgling Israeli Arab entrepreneurs the opportunity to research and develop their ideas and offer an opportunity to start a business based on the success of their research.

Sharon Devir, the CEO of NGT, was drawn to the idea of the incubator, and the idea of Arabs and Jews working together to pursue business goals.
He emphasizes that the incubator is being run as a business, and not a charity. While promoting cooexistence is one of its goals, its primary mission, like any business, is to turn a profit.

“I have total freedom to take professional decisions and how to run the incubator. There are no guidelines from the board of directors either to take Arab or Christian or Jewish employees. The only thing I tried to do at the beginning was to insure that most of my administrative staff was Arab in order to make Arab applicants feel more confident,” says Devir.

Despite the existence of 22 other government-sponsored technological incubators in Israel, Arab entrepreneurs with an idea have been hesitant to approach them, Devir explains.

“An Arab businessman doesn’t feel comfortable stepping into a Jewish business environment and saying ‘here I am – invest in me!’ One of the big problems is when they have to ask for investments, it’s almost like having to undress before someone. Here’s this person who they’ve never met before and they have to disclose all the secrets about this project they’ve been working on for 15 years. With us, they see Arab staff and an Arab Chairman (Nasser Said), and they see there’s no bluffing going on – and it’s working.”

The response to the NGT approach has been extremely positive. Since its inception, an estimated 90% of Arab entrepreneurs looking to establish new businesses in Israel have applied directly to NGT. The first project to be accepted by the incubator, D-Herb, was led by Dr. Sobhi Sauob, an Arab entrepreneur from the Galilee.

D-Herb develops herbal extracts to reduce glucose levels in the blood to treat diabetes. D-Herb reports that it has succeeded in identifying and isolating plants with hypoglycemic agents that reduce and stabilize glucose levels in the blood. The extracts are derived from Galilee plants known in local folklore as herbal remedies for diabetes.

“D-Herb has been up and running for over half a year,” says Devir. “They just finished in vitro testing and will soon be moving on to in vivo testing.”

The company’s general manager, Jan van Mil says that the staff of Jews and Arabs have succeeded on focusing on the business at hand, without letting personal feelings impact on the company’s goals.

“Moving the company ahead is everybody’s priority – more than where they stand on political issues. However, with the events taking place as they are – from Iraq to the Roadmap to ongoing attacks, it’s hard to exclude it from daily discussions,” van Mil says. “But everybody knows the limits to which you can take the discussions before it reaches a point where it begins to affect the interaction you need to have on a daily basis.”

Just this month, NGT had its second project approved by the Chief Scientist – based on the research of another Arab scientist who believes that insulin added to baby formula has enabled premature babies to develop vital organs and fully develop functions like digestion more quickly.

Devir explains that certain key elements are required before an idea is accepted by NGT and brought to the Chief Scientist’s Office for approval.

“First of all, we look for a valid IP (intellectual property) that can be patented or defended. Then we look at the entrepreneur or the team to determine if we can work together. And lastly we determine what the chance is that if a company is formed, we’ll be able to turn it into a profit-making venture within 6 years.”
“Since we began operating 9 months ago, we’ve had 60 official requests for projects – that’s in addition to countless businessmen and scientists who have called and been rejected outright right away. Out of these 60, over 25 have come from the Arab sector.”

Besides D-Herb and the insulin project, Devir says four other proposals are awaiting approval from the Chief Scientist’s office, six are being developed in their final stages before application, and the rest have rejected for not meeting the various requirements above.

The Nazareth project is a great accomplishment for an idea that had its own incubation period over the last four years. The Center for Jewish-Arab Economic Development was started 15 years ago by an idealistic American Jewish woman named Sarah Kreimer, focused on strengthening the Arab business sector, with an eye to future cooperation between Jewish and Arab businessmen.

The result was the Arab Business Club.
The club, with 80 members including all of the leading Arab businessmen in Israel, formed the seed of the idea for the incubator. With the help of Israeli businessman Davidi Gilo, who has a rich past in promoting coexistence, Arab businessmen, who had nothing to do with hi-tech, were convinced to back the project, both morally, and financially.

“Two of the investors are from Nazareth, two are in the housing construction industry, one owns a meat processing plant and another is in the gas business. They put in $1m out of their pocket – real out-of-pocket cash, not an offshore investment from the Cayman Islands,” says Devir.

But their money alone is not enough to keep the NGT afloat. Devir is in the preliminary stages of trying to involve the Jewish and Arab communities in Detroit to take an active role in investment.

“I hope to start a $10 million fund for investing in our portfolio. I would like the first two million to be from American businessman who find it attractive that it’s a joint Jewish-Arab venture. Detroit is a unique situation whereby there are very strong Jewish and Arab communities,” says Devir.

Devir sees the enthusiastic response in the Israeli Arab sector to the incubator as a reaction to the violence that has swept Israel over the last two and half years.

“The timing is not strange – it only exemplifies the willingness of a majority of Israel Arabs to be part of Israeli society. Those that are causing trouble and staining their reputation are a small group of extremists – the kind that exist in any society. These people are not extremists – they may be religious, fasting on Ramadan, going to pray in mosques – but it’s not the overriding factor.

“They represent the mainstream of Israeli Arab society that wants to live in Israeli society with equal rights and equal opportunity. They understand this is their only chance to make a reasonable life in Israel.”