Israel: An Introduction

From ExecutivePlanet.com

About Israel

Israel is perhaps the most fascinating, intriguing and complex country in the world. Geographically tiny, the country’s social, historical, economic and geographical matrix represents a singular association of contrasting attributes unique among the world’s nations and cultures. Snow covered mountains and tropical sea resorts, technology hotbeds and Byzantine churches, socialist-style settlements and free market corporations, Ethiopian traditions and Polish cuisines, Beemers and camels all exist together in a bustling, hyper-energetic, egalitarian, extroverted and impassioned caldron a mere 262 miles long and, in some areas, 10 miles wide.

The powerful Romans regarded ancient Israel as one of their most strategically important locations. Great roads and aqueducts interconnected bustling cities vital to the empire’s financial strength and political stability. For two thousand years, the Crusaders, Ottomans and other world powers regarded this region as crucial for their economic and strategic vitality.

In today’s global environment, modern Israel is once again becoming a vital element in the international strategies of both large and small US businesses. Long considered a critical region, the Near East has transformed into an attractive wellspring of commercial opportunity. As geopolitical change continues to unfold, Israel is rapidly assuming stature as an ideal gateway to vast, largely untapped, and highly lucrative markets.

A highly westernized nation located at the gateway to eastern cultures, Israel is positioned to become a commercial hub for numerous multinational companies. A Mediterranean country with a distinct “Western Suburban” flavor, a friendly, outgoing population, and a mild sun-belt climate, Israel has always been a premier attraction for travelers seeking to experience humanity’s cradle and has lately become the focus for an influx of global corporations seeking to establish a foothold in the region.

Geography

Israel’s geography mimics the country’s cultural, social, economic and political diversity. From north to south the land stretches no more than 262 miles long. At its widest, the country is 65 miles wide. Inside this geological package one can find the snow covered 8900 foot Mount Hermon at one end and the tropical, oasis-like Red Sea resort of Eilat at the other. In between a traveler passes the official Lowest Place on Earth – the soupy, salty Dead Sea, fertile volcanic valleys, coastal Mediterranean beaches, rolling olive-tree studded hillsides and dramatic red sand canyons.

Israel's four main cities are Jerusalem the capital; Tel Aviv, focus of the country's industrial, commercial, financial and cultural life, founded (1909) as the first Jewish city in modern times; Haifa, a major Mediterranean port and the industrial center of northern Israel; and Be'er Sheva, the largest population center in the south.

In 2006 Israel’s population numbered 6.991 million of whom 76.0% are Jewish, 16.3% Moslem, 2.1% Christian and 1.6% Druze.

Government

Israel is an avid democracy with a Parliamentary government. Israelis are enthusiastic participants in the country’s political process and tend to immerse themselves in each and every political issue du-jour. Political discourse is encouraged and propagated by Israel’s media and savored as a hiatus from the rigors of day to day life and a social pastime among professional colleagues, friends, and relatives. Israel’s Parliament, the Knesset (a biblical term meaning Assemblage) is composed of numerous parties with Liberal, Centrist and Conservative platforms and representing the country’s multiple ethnic and cultural groups including Israel’s 16% Arab population who are Israeli citizens. As in many other democracies, Israelis elect Members of Parliament and majority party coalitions compose the governing cabinet headed by a Prime Minister.

Economy

A Socialist economy for almost forty years, Israel underwent a dramatic conversion to a Free Market, capitalist system in the mid 1980’s. In the years since, public sector corporations were privatized, bureaucracy, red tape, and protectionist policies were discouraged and competitiveness, productivity and exports boosted. The government reduced its involvement in economic initiatives, began limiting subsidies, deregulated currency and placed emphasis on promoting Israel’s high-tech & R&D capabilities.

Since the early 1990’s technology has become the hallmark of Israel’s economic leadership and prowess. The desire to transform a mostly barren land into a modern state was a key factor in Israel's early technological development. Today, the percentage of Israelis engaged in scientific and technological investigation, and the amount spent on research and development (R&D) in relation to its GDP, are among the highest in the world. Israel’s astonishing degree of global technological leadership is reflected in the following statistical data:

77% of Israel’s workforce has secondary education (2nd in the world). 24% of Israel’s workforce has academic degrees (3rd in the world). 12% of Israel’s workforce has advanced degrees. Israel has the highest per capita concentration of engineers in the world (135 per 10,000). Israel is the 3rd largest patents per capita producing country (2.04 per 10,000). Israel is the 1st largest producer of published scientific papers per capita (109 per 10,000). 359 Israeli companies were acquired for an aggregate $31.1 Billion since 1996. 170 Israeli companies raised $15.9 Billion in Initial Public Offerings since 1995. Israel ranks third in the amount of NASDAQ listed companies after the US and Canada.

Beyond mere statistics, Israel has become a cradle from which evolved many of the tech products that drive modern life. Quick investigations into the origins of many ubiquitous technologies reveal roots in Israel’s R&D hotbeds. Early PC microprocessors were first designed in Israel and still carry Hebrew code names such as Banias, Yonah, and Merom. Four years before the World Wide Web became a household tool, an Israeli company developed the Internet Chameleon browser. Internet telephony was pioneered by VocalTec. Instant Messaging was born in Israel as ICQ. Teva is the world’s leading generic drug company. Drip irrigation and Cherry Tomatoes are products of the country’s copious Ag R&D.

Global consumer product manufacturers, retailers, food chains, industrial corporations, and service providers have established local Israeli operations as a vehicle for commercial expansion in the Near East. Tapping Israel’s highly professional workforce, robust economy, thriving consumer markets, and dynamic commercial environment, these companies have successfully initiated independent operations or joint ventures with local Israeli partners. Israel’s Free-Trade agreements with both the EU and the US position the country as a major trade partner with most Western Hemisphere nations. The country’s technology industry has facilitated robust commercial relationships with India and China and the large eastern block immigration has contributed to extensive economic dependencies between Israel, Russia and most former Soviet Union nations.

Israel’s currency is the NIS – New Israel Shekel which is closely linked to the US Dollar and Euro. The country’s banking system is highly western and sophisticated and most Automated Teller machines will dispense Euro and Dollar currencies when requested.

Climate

Climate in Israel is as varied as the country’s heterogeneous geography. Low coastal areas along the Mediterranean Ocean are typically warm and humid in the summer with temps ranging from low 20’s to the mid 30’s Centigrade. Winters are cool along the coast with temps ranging from the teens to low 20’s Centigrade. There is no rainfall between May and September throughout the entire country with bright sunny days being the daily norm. Mountain regions in the North and the Jerusalem area are drier with lower nighttime temperatures during the summer and near freezing lows in mid-winter. Mountains and higher elevations experience several snow events each winter. The desert regions to the south are typically very hot and dry during daytime and cold at night.

Religion

There are three main religions in Israel: Judaism, Islam and Christianity. Constitutionally, Israel is considered a Jewish state and a homeland for globally dispersed Jews. However, freedom of Religion and a citizen’s right to practice any faith is a core tenet of Israel’s democracy and government. The country is also host to the world headquarters of the Bahai faith, located in Haifa, a large Druze community and representatives of the Mormon faith. Because Israel was created primarily as a Jewish state, its founders established a core set of policies designed to instill basic traditions into daily life. After sixty years of nationhood, only the Sabbath (Saturday, the “Seventh Day”….) remains as a significant manifestation of the country’s dominant faith. Although public transportation is unavailable Friday afternoon to Saturday evening on religious grounds, retailers, businesses, corporations, government and municipal services close for the weekend like in any other country. Denominations of each major religion are common throughout Israel and places of worship are ubiquitous. There are numerous Synagogues, Mosques and Churches in every Israeli city. Amongst Israel’s Christian community there are Protestants, Catholics, and Orthodox denominations. Israel’s Jewish majority is divided into reform, conservative and orthodox groups but percentage-wise the country’s Jewish population is secular placing emphasis on national pride and traditions rather than religious practice. Israel’s Moslem population is divided into the Sunni and Shiite denominations.

Feature: From Exile to Redemption – Cultural Legacy and the Israeli Business Mindset

More than in other countries, Israelis strongly reflect their roots, their national history, and the central issues that affect their society. The impact of culture and history on individuals living in more mature societies is less pronounced since issues such as identity and national fulfillment have become inborn elements of the collective “national psyche”. Israel, however is a relatively young country whose historical and cultural legacy is “fresh in the minds” of its citizens and it is this legacy that affects every day life and business culture.

Only sixty years old, Israel and its citizens negotiated a tortuous path leading from the perils of a two-thousand year Diaspora, pogroms, ghettos and a horrendous holocaust to a homeland burdened by geopolitical volatility and an unprecedented rate of socio-economic change. During the six decades of its existence the country has assimilated millions of immigrants, has endured crippling embargos, transformed an arid, hostile geography to a 21st century medley of sprawling urban development and cutting edge agriculture, converted from Socialism to Capitalism, and evolved from an Agro-Industrial society to an academic and technological hotbed.

Israel’s constant state of war and precarious national security have not deterred Israelis from maintaining an unrelenting commitment to preserving democracy and free speech, an uncompromising dedication to the development of a productive and successful economy, an intensive investment in the education and social well being of citizens, a passionate dedication to the propagation and development of the arts and sciences and an unyielding struggle to maintain peaceful lifestyles in a threatening environment. In the face of adversity Israelis continuously struggle to maintain a compassionate society while searching for a consensus designed to solve the region’s ultra complex geo-politics.

Given the above, the Israeli business mindset is at times a confusing synthesis of opposing behaviors and attitudes that can only be understood by a more holistic comprehension of Israel’s historical background, culture and social environment.

Israel’s short history and extremely rapid rate of cultural, social and economic change has diminished the predominance of “long-term” perspectives. Israelis think and function in a “short-term” environment and framework. Living in an environment of temporal uncertainty and possible future threat, creates to a considerable extent, a “culture of haste” in which Israelis rush to achieve tangible outcomes, taking “shortcuts” and improvising to generate quick results.

More than in other western cultures where individuals weigh possible gains or losses resulting from their choices, Israelis are especially sensitive to possible consequences of their actions. Israelis will tend to over-ponder conceivable risks and attempt to minimize possible negative outcomes and circumstances. For this reason Israelis will at times seem to be more suspicious, wary, and skeptical both in their personal and professional environments.

For years Israelis lived and worked in an environment that required continuous improvisation to overcome an inability to procure resources. A high degree of education and technological knowledge enabled Israelis to develop novel solutions that, at times, deviated from what may be considered “standard practice”. Survival and advancement through improvisation and innovation has always been viewed as a crucial factor influencing Israel’s ability to thrive as a nation.

Israelis tend to follow a lesser degree of linearity and organization in thought and expression, and accomplish both personal and professional tasks with a greater degree of multi-directional, frequently spontaneous, actions. Israelis are prolific inventors and excel at spontaneous modification of previous art. Individuality, spontaneity and a strong, highly cherished sense of personal freedom often detract from the ability to team and cooperate effectively in groups sharing common goals.

In contrast to western social culture in which individuals maintain a high degree of privacy and interpersonal distance, living in a condensed and compromised environment drives Israelis to invest time and effort in developing social contacts and to seek the security and comfort generated by intense interpersonal association and communality among family members, neighbors and friends.

Israel’s revival is considered a truly amazing phenomenon world-wide. The country’s leadership in agriculture, biotechnology, medicine and recently its position as the second “Silicon Valley” has instilled in Israelis a profound sense of pride which is readily expressed in their day to day interactions with foreigners. Israelis instinctively translate the dramatic degree of achievement at the national level, into a perception of individual omnipotency. This unavoidable view can at times surface as “elitism” or a practical “we know better” attitude.

Released from centuries of oppression and subjugation of personal liberties, Israelis are very expressive, communicative, opinionated and outgoing. Emotions are frequently and passionately expressed out in the open. Democracy, free speech and a sense of new found liberty have generated a society in which individuals feel free to openly and frequently express opinions, even in highly structured, hierarchical or austere organizations or environments. Debate and discussion are a national “pastime” in Israel.

Feature: Communicating with Israelis

Foreign visitors tend to stereotype Israelis as “aggressive communicators”. Truthfully, some Europeans may say the same about native New Yorkers. Although instances in which conversations take on forceful tones occur in many countries, communications among Israelis are commonly misinterpreted as aggressive because the physical sounds of the Hebrew language (a staccato sounding Semite language) are frequently construed by foreign listeners as being brash and argumentative.

Israelis are usually stereotyped as interruptive communicators, recurrently slicing mid-sentence into the guest’s verbal flow. While there are cultural drivers for this communicative style, there is also a cognitive explanation why Israelis (and other foreigners…) talk in overlapping order: When Israelis converse with foreigners they do not have “native” command of the foreign language. They therefore need to invest much greater effort and concentration in understanding what is being said. Such concentration shifts energy from “comprehension” to physical “listening” and causes loss of focus on ideas and opinions that are generated during the conversation. An Israeli listener, sensing such loss of focus will hurry to address the issue at hand before the conversation moves on to the next segment. Such hurried attempts “to keep up” with conversational content can be understood as interruptive. It is better, therefore, for a foreigner to speak slowly and allow pauses for conversational redirect.

Israelis are also frequently accused of using their native language to conceal conversations from foreign guests. In reality Israelis will feel uncomfortable using language as a secretive dialog mechanism. More commonly, because they are avid and extroverted conversationalists, Israelis will switch automatically to Hebrew for convenience purposes and the odd feeling of conversing amongst themselves in a foreign language. However, guests who feel uncomfortable when their Israeli hosts converse amongst themselves in Hebrew should feel free to request that conversations be limited to English.

If you do not understand your Israeli counterpart’s English – ask him to repeat his words. It is unfortunate to compromise a relationship based on language technicalities. Conversely, ask your Israeli counterparts to tell you when they do not understand your words, sentences or ideas. Refrain from using “business-speak” or “politically correct” idioms. Use the word “problem” instead of “challenge”. Use simple words and phrases to convey ideas.