Description
This brief data resolve developing an entrepreneurial ecosystem in the palestinian territories key opportunities.
DEVELOPING AN ENTREPRENEURIAL
ECOSYSTEM IN THE PALESTINIAN TERRITORIES:
Key Opportunities for Partnerships
Page 2 of 15 The Aspen Institute
Introduction
Summary
Partners for a New Beginning (PNB), in cooperation with the Telos Group and the local chapter of
PNB-Palestinian Territories, led an Entrepreneurship Delegation to the West Bank from October 3 –
7, 2012. Nearly a dozen US entrepreneurs, angel investors and those passionate about mentoring
entrepreneurs traveled from across the globe for a week dedicated to understanding the challenges
and opportunities facing Palestinian entrepreneurs, as well as providing mentorship and training
for many of them.
The group met with representatives from several Palestinian universities, as well as successful
business leaders and local investment firms to gain a holistic view of local efforts to support
entrepreneurs through entrepreneurial curriculum, training, and access to capital. Perhaps most
importantly, it gave both sides the opportunity to share best-practices, forge new relationships, and
invest in valuable partnerships.
Celebration of Innovation
A main focus of the delegation was mentoring
Palestinian entrepreneurs who participated in the
delegation’s hallmark event, the Celebration of
Innovation, held in Ramallah on October 7
th
and hosted
by the Palestinian Local Chapter of Partners for a New
Beginning. The Celebration of Innovation (COI) is an
annual business competition which showcases Palestinian entrepreneurs and their ventures aimed
at improving their local communities. Seventy-four teams from the West Bank and Gaza applied to
participate, and the most impressive fifteen business concepts were selected. In the days leading up
to the COI, the delegates spent hours mentoring the budding entrepreneurs on how to best present
their business plans and pitch to prospective investors.
The Celebration of Innovation attracted hundreds of observers and showcased an impressive array
of Palestinian talent. Of the fifteen participating teams, five were selected to receive up to $20,000
each in seed funding, as well as placement with a local company or organization for incubation.
Incredibly, for four of the five teams from Gaza, the COI provided the first opportunity to leave Gaza.
The teams were able to obtain permits to leave Gaza, a privilege typically denied to them. Three of
them were among the top five winners of the COI competition. This year’s event featured regional
business leaders and entrepreneurs such as, Fadi Ghandour, CEO of Aramex
The Celebration of Innovation showcased the undeniable potential and creativity of Palestinian
entrepreneurs, as well as their ability to create sustainable businesses in the face of major
obstacles. Despite these challenges, there are tangible opportunities for partnerships to advance the
development of the entrepreneurship eco-system.
Moving Forward
Supporting entrepreneurship in the Palestinian Territories is imperative to increasing economic
opportunity. Local universities produce approximately 2,000 graduates each year in technical
subjects, but only 30 percent of those graduates are able to secure work in local industry
1
. The
majority of job openings are in the public sector, while incentives to join the private sector or
partnersforanewbeginning.org Page 3 of 15
become entrepreneurs are few and far between. Throughout the territories, only three percent of
the population is involved in nascent businesses
2
. Entrepreneurs have limited access to support and
education for entrepreneurs interested in developing business plans and accessing early-stage
financing is limited. In addition, the region does not support a culture of risk taking, a staple in
creating successful and innovative businesses. Given these realities, it is clear why many of the
Palestinian Territories’ most innovative young entrepreneurs go abroad in search of better
opportunities, leading to high levels of brain drain and loss of local young talent.
However, years of political instability and occupation have created a resilient, determined and
creative Palestinian community. As a result, more and more well-educated and passionate young
people are turning to entrepreneurship as a means to create their own job opportunities and
improve their communities. Numerous organizations are popping up to support this emerging
trend, and many of these businesses address local gaps and needs within the community. Combined
with exceptional technical talent, Palestinian entrepreneurs are the key to advancing economic
development.
This report highlights the assets, challenges and opportunities for nurturing the development of a
robust entrepreneurial eco-system in the Palestinian Territories.
-DELEGATES-
Amer Abdullah – Entrepreneur, Financier
Elliott Adams – Professor of Entrepreneurship, Department of Music Industry
Studies, Loyola University New Orleans
Issam Andoni – Founder, Zeva Inc.
Jihan Andoni – CEO, Zeva Inc.
Kris Balderston – Special Representative for Global Partnerships, US Department of
State
Brenden Chaney – Global Vice President, Global Entrepreneurship Week
Akram Chowdry – Owner and General Partner, HiTech Venture Capital Fund
Marc Dangeard – Founder, Entrepreneurs Commons
Winston Ibrahim – Co-Founder and Executive Chairman, Hydros
Randa Masri –Founder and CEO, ConnectME
Hany Rashwan – Founder and CEO, Ribbon
Teju Ravilochan – Co-Founder and CEO, Unreasonable Institute
Joshua Walker – Senior Advisor, US Department of State
Page 4 of 15 The Aspen Institute
Overview
Challenges
Structural Challenges
? The primary obstacle limiting the advancement of Palestinian entrepreneurs is the Israeli
occupation. The occupation significantly hampers the mobility of people, goods and
resources, creating an environment which stifles creativity and is hostile to innovation.
? The occupation also inhibits the development of an economy which is sufficiently robust to
generate adequate employment for the growing youth population. Expectedly, the result is
persistent and high unemployment.
? Due to large amounts of aid and donor money flowing into the Palestinian Territories’, the
economy does not have a strong private business sector. Private sector businesses struggle
to recruit talent because they are not able to offer salaries and benefits that are competitive
with the bloated public sector and high-paying international NGOs.
Knowledge-Deficit Challenges
? The education system will require substantial reforms in order to effectively provide
Palestinian youth with the skills necessary to meet private sector needs. Universities need
to expand their entrepreneurial-focused curricula and empower their faculties to provide
potential entrepreneurs with the tangible skills needed to sustain entrepreneurial business
ventures.
? Entrepreneurs lack the basic skills to launch a business, determine financial needs, and
attract investors. The infrastructure needed to foster entrepreneurs is underdeveloped in
the Palestinian Territories. There is a need to build up the resources and mentorship
systems that will aid the development of a Palestinian entrepreneurial mindset. There is
therefore a strong need for mentorship and guidance of young entrepreneurs.
Social Challenges
? Women only make up about 16% of the workforce in the Palestinian Territories
3
. This is
partly due to the conservative culture, as well as to the generally austere employment
landscape. The female labor market, therefore, is a large and underdeveloped economic
resource.
? Risk and innovation go hand-in-hand. However, the private sector in the Palestinian
Territories is notably risk averse. This presents a serious obstacle for capital-seeking
entrepreneurs.
partnersforanewbeginning.org Page 5 of 15
Opportunities and Assets
? Given local conditions under occupation, Palestinians have proven to be creative in their
ability to solve problems and create opportunity in spite of restrictions.
? While the education system requires reform, the general population is highly educated. In
particular, there are high levels of language proficiency not only in Arabic, but in English
and Hebrew as well.
? Technical education in sectors of IT and engineering is competitive as well, despite needs
for hands on training, internships and mentorship. The IT sector should be emphasized as a
fertile area for entrepreneurship, since it is not inhibited by the restricted mobility imposed
by the occupation.
? Financial resources do exist in the Palestinian Territories, but access to start-up financing
needs to be more accessible to young entrepreneurs.
Key Areas for Partnership
Current challenges can be overcome by developing and supporting innovation and entrepreneurial
talent. There are several partnership opportunities that can tremendously advance the
entrepreneurial ecosystem in the Palestinian Territories. The most effective partnerships focus on:
Mentorship | Education | Capital
p. 6 p. 10 p. 12
DELEGATE TESTIMONIALS
“Even with great perseverance and ideas, entrepreneurs and
technology companies in Palestine will need to connect with the
worldwide ecosystem of peers to share ideas and reduce their
potentially crippling isolation. More fundamentally, communities
and institutions must be willing support the culture of risk-taking
that allows a startup ecosystem to thrive… Palestine is working
to stand on its own and needs the great seed of an innovation
ecosystem: active collaboration with the outside world.”
- Elliott Adams
Page 6 of 15 The Aspen Institute
Several organizations are
already leading the way in
fostering entrepreneurship in
their local communities:
Tomorrow’s Youth Organization
(TYO)
TYO is an NGO working to advance
disadvantaged populations and
communities in the Middle East. It
has created the Fostering Women
Entrepreneurs in Nabulus program
which aims to increase women’s
participation in the labor force and
promotes economic empowerment
through programs that enhance
women’s business skills and self-
confidence. TYO supports an
incubation center for women
entrepreneurs working to grow a
sustainable business.
Additionally, it offers training in
marketing, access to capital, IT and
business English while also
facilitating mentor relationships.
Diyar Consortium
The Diyar Consortium focuses on
community building and works to
empower children, youth and
women. Diyar encourages
Palestinians to embrace their
cultural identity through leadership
camps and cultural development
programs, and encourages
entrepreneurial skills.
Mentorship
An Invaluable and Accessible Resource
Entrepreneurs around the world face the daunting challenge of turning an exciting idea into a
profitable, competitive and scalable business. Mentorship, therefore, is perhaps the most valuable
resource to fill that knowledge-gap. With thoughtful guidance, entrepreneurs can avoid the
common pitfalls faced by young businesses and gain the confidence necessary to turn their ideas
into successful businesses. Mentors also provide emotional support through what can be a daunting
and confusing battle. That support is especially valuable in a culture unaccustomed to encouraging
entrepreneurs to take risk.
Throughout the delegation, mentorship emerged as one of the
most effective tools which could be deployed to develop a
robust and thriving entrepreneurship ecosystem in the
Palestinian Territories. The creation of a mentorship network
would not only allow for guidance and training on how to
develop new businesses, but also create a support system that
allows entrepreneurs to take greater risks with their ventures.
With local business leaders and Palestinian diaspora from the
United States, the Palestinian Territories can begin to develop
a mentorship network that can help fill one of the critical
knowledge-gaps faced by aspiring Palestinian entrepreneurs
as they attempt to transform their start-up inspirations into
viable business models.
Background
Palestinians have always been encouraged to take advantage
of secure and lucrative job opportunities with the government
or NGOs. Additionally, almost all businesses are family owned
and have less than ten employees
4
. As a result, there are few
role models to encourage potential Palestinian entrepreneurs
to take the risks necessary to launch an innovative business.
But, today’s younger generation of entrepreneurs are
beginning to take bold moves in a territory typically restrained
by uncertainty and occupation. Young Palestinian
entrepreneurs are tremendously creative, innovative and
determined. An effective mentorship network would allow
them to use this talent and create sustainable and viable
businesses locally.
partnersforanewbeginning.org Page 7 of 15
Several universities have already made
progress establishing incubation and
acceleration services. Below are some
examples from the Education Roundtable
hosted by PNB during the PNB
Entrepreneurship Delegation:
Bethlehem University
Bethlehem University’s computer science
program, only five years old, is focused not
only on teaching critical computer science
skills, but also on enhancing students’ private
sector skills. For example, BU recently
launched an internship course for students to
earn credit for doing substantive research or
work experience during the summers.
The institute for Community Partnerships at
Bethlehem University incubates
entrepreneurs with commercially viable
business ideas and provides them with the
skills, consultancy services and partnerships
necessary to become profitable businesses.
BU is looking to build other critical
partnerships that can support private sector
skill building.
University of Hebron
The University of Hebron is located in the
most populous and the poorest district of the
West Bank. Entrepreneurs emerging from the
University of Hebron tend to create
businesses in the agriculture and food
sectors. UH also hosts a prominent IT
department that has a specific focus on multi-
media, web development and mobile web
applications. It also provides
entrepreneurship training to these students.
Palestine Polytechnic University
The Palestine Polytechnic University has
increased efforts to support
entrepreneurship by creating a technology
incubator that targets the large number of
students in the applied sciences, like
engineering. They are also working on
developing curriculum that provides students
with both hard and soft skills, such as
communication and language skills, which are
very much needed to work in the private
sector.
An-Najah University
An-Najah is the largest university in the West
Bank and houses a technology incubator. The
incubator has already graduated five
businesses, three of which were founded by
women. The university also launched an
entrepreneurship and employability center
that focuses on providing entrepreneurship
training and mentorship within the
university.
Recommendations
I. Inspire Entrepreneurship
Many Palestinians are deterred by the risks associated with
entrepreneurship. However, the Palestinian Territories are
already teeming with the talent and creativity that can propel
its economy into the 21
st
century; they simply need to
showcase their existing success stories to inspire and
encourage others. Fledgling entrepreneurs can benefit
immensely from hearing the success stories of international
and local entrepreneurs to understand the challenges and
rewards ahead.
Action Items from the PNB Entrepreneurship Delegation:
- Ribbon.com is working to coordinate an event with
Garage48, a 48-hour event that promotes
entrepreneurship in emerging markets while
teaching participants how to develop an idea into a
working service or prototype. The event is
expected to take place in the West Bank in 2013.
- Global Entrepreneurship Week will expand to the
Palestinian Territories in November 2013, helping
to coordinate events that celebrate
entrepreneurship and connect all players of the
innovation ecosystem.
II. Mentor Start-ups
Mentorship is essential to help an idea become a successful
venture. Along the opaque and challenging entrepreneurial
path, young Palestinians need much guidance. With a dearth of
local talent capable of mentoring the burgeoning pool of
entrepreneurs, international exposure is essential to helping
them overcome the hurdles they face.
Action Items
- At least five of PNB’s delegates and partners have
committed to regularly mentor one or more
Palestinian entrepreneurs, which include
MobiStine, a company developing Arabic-language
healthcare apps for new parents, and GreenTech, a
company that creates customized IT solutions for
sustainability issues. Several delegates and
entrepreneurs are connecting virtually to facilitate
mentorship and to gain a deeper understanding of
the impressive business concepts and capital
needs. Two delegates returned to the Palestinian
Territories a month later to meet with an
Page 8 of 15 The Aspen Institute
entrepreneur whose business specializes in the breeding, fattening and selling of
Marino sheep.
III. Incubation and Acceleration Programs
Traditionally, Palestinians are hesitant to share their nascent business ideas and seek insight from
their peers. However, peer support is a tremendous resource that can significantly advance
business concepts and advance entrepreneurs’ start-ups. Incubators and accelerators offer the
opportunity to benefit from the experiences and technical knowledge of like-minded peers, while
also creating valuable partnership opportunities. Additionally, they immerse entrepreneurs in an
environment of calculated risk-taking, competition, teamwork and perseverance. Those intangible
factors are invaluable to entrepreneurs.
Action Items
- The Unreasonable Institute, an accelerator in Boulder, Colorado focused on global
entrepreneurs working to solve social and environmental issues, has offered to
accelerate the applications of several Palestinian entrepreneurs interested in
participating in its Summer 2013 program.
- The Unreasonable Institute would like to expand its institute globally, including
establishing operations in the Palestinian Territories. In cooperation with the
Palestinian local chapter of PNB and the PNB Secretariat a team will be built to launch
local operations.
IV. Promote Palestinian Talent
The talent and growing entrepreneurial community of the Palestinian Territories is not yet
internationally recognized. In order to stimulate and accelerate its growth, publicity focusing on
promising Palestinian entrepreneurs should be widely distributed.
Action Items
- One PNB delegate is working to produce a short film highlighting the story of an
entrepreneur whom he met in the Palestinian Territories. The film will highlight the
talent and innovation of young Palestinians, thereby promoting the potential of the
region and its young entrepreneurs.
- Two opinion pieces have been written to tell the story of the impressive young
entrepreneurs and the challenges they face. Excerpts are included on the next page.
partnersforanewbeginning.org Page 9 of 15
“As PNB Palestine chair Zahi Khouri described to the group, "Diamonds are created under
pressure, therefore it is only natural that Palestinians entrepreneurs are like diamonds
within this region." …With a commitment for seed-funding and mentorship by the PNB
local chapter, each of these unique Palestinian diamonds were beaming and shining
bright, proving that even in difficult climates such as the Palestinian Territories, where
there is a will there is a way.”
- Joshua Walker from Palestinian “Diamonds” of Entrepreneurship and Innovation,
October 17, 2012
“The culture of entrepreneurship runs deep in Palestine, but there is still a long way to go.
‘We need to encourage youth to think outside the box, take more risks with their business
plans and for this we need the right educational tools, training and exposure to successful
entrepreneurs to inspire our young people,’ explained Dr. Sabri Saidam, co-founder of
Education for Employment Foundation, advisor to the President on Information and
Communication Technology and a board member of PNB Palestine.
As the international community and diaspora look for ways to contribute to the
development of Palestine, our focus needs to be on the future: building partnerships to
support initiatives like the Celebration of Innovation, and helping Palestine create a
sustainable eco-system for entrepreneurship.”
- Vanessa Zuabi from The Celebration of Innovation: Building an Ecosystem for
Entrepreneurship in Palestine, October 24, 2012
Page 10 of 15 The Aspen Institute
Several Palestinian universities
who are emphasizing the need to
support entrepreneurship met with the
delegation:
Bethlehem University
Bethlehem University’s computer science
program, only five years old, is focused not
only on teaching critical computer science
skills, but also on enhancing students’
private sector skills. For example, BU
recently launched an internship course for
students to earn credit for doing
substantive research or work experience
during the summers.
The institute for Community Partnerships
at Bethlehem University incubates
entrepreneurs with commercially viable
business ideas and provides them with the
skills, consultancy services and
partnerships necessary to become
profitable businesses. BU is looking to
build other critical partnerships that can
support private sector skill building.
University of Hebron
The University of Hebron is located in the
most populous and the poorest district of
the West Bank. Entrepreneurs emerging
from the University of Hebron tend to
create businesses in the agriculture and
food sectors. UH also hosts a prominent IT
department that has a specific focus on
multi-media, web development and
mobile web applications. It also provides
entrepreneurship training to these
students.
Palestine Polytechnic University
The Palestine Polytechnic University has
increased efforts to support
entrepreneurship by creating a technology
incubator that targets the large number of
students in the applied sciences, like
engineering. They are also working on
developing curriculum that provides
students with both hard and soft skills,
such as communication and language
skills, which are very much needed to
work in the private sector.
An-Najah University
An-Najah is the largest university in the
West Bank and houses a technology
incubator. The incubator has already
graduated five businesses, three of which
were founded by women. The university
also launched an entrepreneurship and
employability center that focuses on
providing entrepreneurship training and
mentorship within the university.
Education
Inspiring the Next Generation of Entrepreneurs
The Palestinian Territories continue to confront incredible
obstacles when it comes to educating its people, and one of the
principal obstacles is restricted mobility. Palestinians face severe
restrictions on their freedom of movement, hampered by isolated
territories, road blocks, and a lack of infrastructure. As a result,
access to education has suffered tremendously. Consequently, the
Palestinian Territories have many universities in order to reach as
many potential students as possible. One third of the population
attends school, with 250,000 university student among the 1.25
million students total
5
.
Efforts to overcome challenges to mobility are already underway.
The Ministry of Higher Education is investigating online learning
to better adapt to the challenges of the political situation.
However, this initiative has faced its own hurdles in existing
regulations which refuse to accredit e-learning courses because
they do not meet the existing standard that students must spend
75% of time in classrooms.
These dated regulations should be revised in order to leverage
modern technology to overcome the chronic challenges in
education. So far, professors have spearheaded the initiative to
change these policies, but they are looking for international
assistance and models of best practices to supplement their
efforts.
The Palestinian Authority (PA) and local Palestinian private sector
should invest heavily in technology research and curriculum
development that allows professors to teach the most up to date
material, as well as incorporate critical thinking, problem solving
and entrepreneurship skills into existing technical courses. By
freeing up funds for sabbaticals and research opportunities
abroad, the PA and local private sector would all but guarantee the
influx of new ideas and enthusiasm into the Palestinian
Territories’ tech research and development sector, as well as
support curriculum development.
Another area in need of reform is in recasting the expectations for
post-primary and post-secondary education employment. Right
now, expectations are markedly focused on the public sector. In
one survey, 144 of 150 students said they were interested in
working for the government after graduation and 6 of150 said
they were interested in becoming an entrepreneur
6
. With modest
changes in curricula and focus, the Palestinian Territories can
begin to strengthen its culture of entrepreneurship via its
partnersforanewbeginning.org Page 11 of 15
education system through curriculum development, mentorship and housing small incubators
within their universities.
Recommendations
I. Entrepreneurship Curriculum Development
Since the Palestinian Territories produce so many university graduates, offering college courses on
entrepreneurship is an efficient way to inspire potential entrepreneurs and assist those already
creating their own businesses by providing the right tools and information.
Action Items
- A Professor of Entrepreneurship at Loyola University New Orleans is coordinating with
Bethlehem University’s Computer Software department to develop the curriculum of an
entrepreneurship minor.
- Another delegate with HiTech Venture Capital Fund will be continuing the training he
offered during the delegation and returning to the Palestinian Territories to teach the
basics of developing a business plan and creating a business.
II. Enhance IT Talent
Palestinian universities have been able to teach high quality technical skills especially in computer
science and information, communication and technology, which have attracted business
partnerships from multinational corporations such as Cisco Systems, Google, Intel and Hewlett
Packard. The Palestinian Territories need additional job opportunities to leverage the benefits of
this asset.
Action Items
- Several years ago, Zeva Inc. began outsourcing its research and development operations
to Bethlehem. Zeva Inc. has also offered several internships in its R&D office based in
Bethlehem to provide students with training and technical knowledge. Zeva often
recruits these interns as employees following successful completion of their degrees.
Zeva is now connecting another delegate with Palestinian IT talent to help advance his
US healthcare IT startup.
- Zeva Inc. is interested in spearheading a US-based association focused on outsourcing IT
work to the Palestinian Territories, with the hope that it will create job opportunities
and expand technical skills.
Page 12 of 15 The Aspen Institute
Capital
Building the Entrepreneurial Investment Environment
Economic growth in the Palestinian Territories has mainly been the result of foreign aid rather than
a strong private sector. Foreign aid inflates salaries in the private sector and encourages
Palestinians to seek government employment rather than pursuing entrepreneurial or business
opportunities. However, achieving sustainable economic growth is possible by strengthening the
private sector and encouraging trade. Investing in entrepreneurs can lead to an increase in
Palestinian exports and a diverse and thriving economy.
Access to finance in the Palestinian Territories is limited but growing. Currently, there are only two
private equity funds (Siraj and Riyada Enterprise Development) and one venture capital fund
(Sadara Ventures) that provide early-stage financing. However, despite these select few funds,
entrepreneurs still rely heavily on their family networks for venture funding and start-up support.
While family networks may be reliable and flexible, they simply do not possess the expertise or
assets to transform the ideas of brilliant young Palestinians into globally successful products or
companies. Additionally, if entrepreneurs eschew family networks, they often rely on large,
commercial banks which are risk-averse and are equally ill-suited for incubating early-stage
enterprises. Integrating the concepts of angel investing and venture capital into the dialogue
surrounding the investment sector in the Palestinian Territories is one way to overcome these
challenges.
Additionally, if large corporations active in the Palestinian Territories shift their focus from
corporate social responsibility to local investment through research and development, the return
on their investments would be even greater. For example, the Bank of Palestine started a
microfinance fund supported by 5% of its yearly budget. If private companies or multi-national
corporations, worked together to support smaller loans in the territories, those efforts could be
leveraged even further.
One success story that gives the entrepreneurial ecosystem hope is the example of a fresh herb
farm in the Jordan Valley. Early on, it was strapped by numerous issues threatening its growth,
including shortages of water and electricity. However, after obtaining the right financing, this farm
has grown to dominate the market in the Palestinian Territories and is in the process of expanding
to US, Russian, and European markets.
The international business and investment community is beginning to recognize the opportunity in
supporting the Palestinian entrepreneurial ecosystem. For example, Abraaj Capital, Palestine
Investment Fund, Bank of Palestine, Cisco and the European Investment Bank created the Palestine
Growth Capital Fund in early 2012. The Palestine Growth Capital Fund closed its first round at $36
million and will be used for private equity growth capital investments to high growth small and
mid-cap companies in the Palestinian Territories. Abraaj Capital will also support the growth and
development of the SMCs in which it invests and encourage expansion into international markets
7
.
partnersforanewbeginning.org Page 13 of 15
Recommendation:
I. Promote Angel Investment
Palestinian start-ups have a difficult time accessing early stage capital. Commercial banks consider
start-ups to be too risky and the rates on micro-finance loans are often too high. Entrepreneurs are
forced to rely on family members and savings to grow their businesses, which is often insufficient.
Angel investment would help develop new ventures and diversify the economy. While there are
risks to angel investing, Palestinian investors need to focus on fiscal and social potential of
supporting exceptionally innovative Palestinians. In addition to lucrative profits and personal
fulfillment, investors play a major role in expanding the economy and providing job opportunities.
Angel investing also creates a support network for entrepreneurs, introducing them to people with
a legitimate interest in their success who are also capable of advancing their business concepts.
Action Items:
- A couple delegates are exploring the best structure for an angel investment group in the
Palestinian Territories.
- At least four delegates are interested in investing in entrepreneurs they mentored in
preparation for the Celebration of Innovation in Ramallah.
DELEGATE TESTIMONIALS
"It was extremely refreshing to see the amount of
opportunity on the ground in Palestine.”
- Hany Rashwan
Page 14 of 15 The Aspen Institute
Conclusion
It takes courage in any society to become an entrepreneur. In the Palestinian Territories, it takes
more. Of the many observations noted by the Partners for a New Beginning Delegation to the
Palestinian Territories in October 2012, perhaps the most apparent was the incredible resilience of
the Palestinian people. Of course, the entrenched structural, resource, and social challenges facing
Palestinian entrepreneurs never quite faded from view. But, despite those austere conditions, it
was the relentless optimism, tireless work ethic, and undying creativity of the Palestinian
entrepreneurs which left a lasting impression on the PNB delegates.
In the eyes of the delegates, many of whom were once or currently are entrepreneurs themselves,
the latent potential of the Palestinian entrepreneurship eco-system was never more apparent than
during the delegation’s keystone event: the Celebration of Innovation in Ramallah. With the
interests of the delegates and entrepreneurs firmly in sync, it was the perfect example of what
Partners for a New Beginning does best: bringing together a diverse group of stakeholders with
common interests for the benefit of the local community and society at large.
By focusing on the three areas of mentorship, education, and capital financing—Partners for a New
Beginning is committed to working to bridge partnerships that advance the creation of an eco-
system of entrepreneurship in the Palestinian Territories. Thoughtful and sustained contributions
to these areas will undoubtedly help orient the Palestinian economy towards a future of growth and
reduced unemployment.
DELEGATE TESTIMONIALS
“The amount of potential for entrepreneurship in Palestine is unbelievable.
The creativity and innovation is inherent. Yes, many of the young
entrepreneurs we met with lacked a full understanding of how to start and
scale a business; but their hunger for learning was immeasurable. That
simply led me to imagine what it would be like if they had the exposure to
more entrepreneurs from all across the globe. The next Facebook could
come from a young Palestinian mind; they just need the exposure to grow.
With organizations like Partners for a New Beginning helping to facilitate
that exposure we may be close to the next big Palestinian innovation.”
- Brenden Chaney
"In 4 days, the Aspen Institute…helped us understand life through the eyes
of Palestinians and gave us the opportunity to see some of the most
revered and famed sites of Jerusalem. This trip was life-changing. It helped
me understand more than I have ever understood about how to build an
entrepreneurial ecosystem, and offered me so many real perspectives on
an amazingly complex conflict and its history. I am coming away from this
trip with a profound hope for the future of Palestine. And largely thanks to
ability of Partners for a New Beginning to bridge powerful human
relationships across walls that others fight to keep standing."
- Teju Ravilochan
partnersforanewbeginning.org Page 15 of 15
References
1
Kershner, Isabel. West Bank’s Emerging Silicon Valley Evades Issues of Borders. The New York
Times. July 29, 2012.http://www.nytimes.com/2012/07/30/world/middleeast/palestinians-
building-tech-hub-in-west-bank.html?_r=1&
2
Daaud, Yousef; Sadeq, Tareq; Tartir, Alaa; Shanti, Ruba. The Global Entrepreneurship Monitor:
Palestine Country Report 2009. Palestine Economic Policy Research Institute. 2010.http://www.mas.ps/2012/sites/default/files/country report 2009%20 final.pdf
3
Official meeting with Jerusalem Business Forum, East Jerusalem
4
Sabri, Dr. Nidal Rashid. Palestinian Family Businesses. 2008.
5
Official meeting with Dr. Sabri Saidam, co-founder of Education for Employment Foundation,
advisor to the President on Information and Communication Technology and a board member of
PNB Palestinian Territories
6
Official meeting with Dr. Sabri Saidam, co-founder of Education for Employment Foundation,
advisor to the President on Information and Communication Technology and a board member of
PNB Palestinian Territories
7
Abraaj announces first closing of Palestine fund. Emirates 24/7. March 12, 2012.http://www.emirates247.com/business/economy-finance/abraaj-announces-first-closing-of-
palestine-fund-2012-03-12-1.448039
DEVELOPING AN ENTREPRENEURIAL
ECOSYSTEM IN THE PALESTINIAN TERRITORIES:
Key Opportunities for Partnerships
doc_138787560.pdf
This brief data resolve developing an entrepreneurial ecosystem in the palestinian territories key opportunities.
DEVELOPING AN ENTREPRENEURIAL
ECOSYSTEM IN THE PALESTINIAN TERRITORIES:
Key Opportunities for Partnerships
Page 2 of 15 The Aspen Institute
Introduction
Summary
Partners for a New Beginning (PNB), in cooperation with the Telos Group and the local chapter of
PNB-Palestinian Territories, led an Entrepreneurship Delegation to the West Bank from October 3 –
7, 2012. Nearly a dozen US entrepreneurs, angel investors and those passionate about mentoring
entrepreneurs traveled from across the globe for a week dedicated to understanding the challenges
and opportunities facing Palestinian entrepreneurs, as well as providing mentorship and training
for many of them.
The group met with representatives from several Palestinian universities, as well as successful
business leaders and local investment firms to gain a holistic view of local efforts to support
entrepreneurs through entrepreneurial curriculum, training, and access to capital. Perhaps most
importantly, it gave both sides the opportunity to share best-practices, forge new relationships, and
invest in valuable partnerships.
Celebration of Innovation
A main focus of the delegation was mentoring
Palestinian entrepreneurs who participated in the
delegation’s hallmark event, the Celebration of
Innovation, held in Ramallah on October 7
th
and hosted
by the Palestinian Local Chapter of Partners for a New
Beginning. The Celebration of Innovation (COI) is an
annual business competition which showcases Palestinian entrepreneurs and their ventures aimed
at improving their local communities. Seventy-four teams from the West Bank and Gaza applied to
participate, and the most impressive fifteen business concepts were selected. In the days leading up
to the COI, the delegates spent hours mentoring the budding entrepreneurs on how to best present
their business plans and pitch to prospective investors.
The Celebration of Innovation attracted hundreds of observers and showcased an impressive array
of Palestinian talent. Of the fifteen participating teams, five were selected to receive up to $20,000
each in seed funding, as well as placement with a local company or organization for incubation.
Incredibly, for four of the five teams from Gaza, the COI provided the first opportunity to leave Gaza.
The teams were able to obtain permits to leave Gaza, a privilege typically denied to them. Three of
them were among the top five winners of the COI competition. This year’s event featured regional
business leaders and entrepreneurs such as, Fadi Ghandour, CEO of Aramex
The Celebration of Innovation showcased the undeniable potential and creativity of Palestinian
entrepreneurs, as well as their ability to create sustainable businesses in the face of major
obstacles. Despite these challenges, there are tangible opportunities for partnerships to advance the
development of the entrepreneurship eco-system.
Moving Forward
Supporting entrepreneurship in the Palestinian Territories is imperative to increasing economic
opportunity. Local universities produce approximately 2,000 graduates each year in technical
subjects, but only 30 percent of those graduates are able to secure work in local industry
1
. The
majority of job openings are in the public sector, while incentives to join the private sector or
partnersforanewbeginning.org Page 3 of 15
become entrepreneurs are few and far between. Throughout the territories, only three percent of
the population is involved in nascent businesses
2
. Entrepreneurs have limited access to support and
education for entrepreneurs interested in developing business plans and accessing early-stage
financing is limited. In addition, the region does not support a culture of risk taking, a staple in
creating successful and innovative businesses. Given these realities, it is clear why many of the
Palestinian Territories’ most innovative young entrepreneurs go abroad in search of better
opportunities, leading to high levels of brain drain and loss of local young talent.
However, years of political instability and occupation have created a resilient, determined and
creative Palestinian community. As a result, more and more well-educated and passionate young
people are turning to entrepreneurship as a means to create their own job opportunities and
improve their communities. Numerous organizations are popping up to support this emerging
trend, and many of these businesses address local gaps and needs within the community. Combined
with exceptional technical talent, Palestinian entrepreneurs are the key to advancing economic
development.
This report highlights the assets, challenges and opportunities for nurturing the development of a
robust entrepreneurial eco-system in the Palestinian Territories.
-DELEGATES-
Amer Abdullah – Entrepreneur, Financier
Elliott Adams – Professor of Entrepreneurship, Department of Music Industry
Studies, Loyola University New Orleans
Issam Andoni – Founder, Zeva Inc.
Jihan Andoni – CEO, Zeva Inc.
Kris Balderston – Special Representative for Global Partnerships, US Department of
State
Brenden Chaney – Global Vice President, Global Entrepreneurship Week
Akram Chowdry – Owner and General Partner, HiTech Venture Capital Fund
Marc Dangeard – Founder, Entrepreneurs Commons
Winston Ibrahim – Co-Founder and Executive Chairman, Hydros
Randa Masri –Founder and CEO, ConnectME
Hany Rashwan – Founder and CEO, Ribbon
Teju Ravilochan – Co-Founder and CEO, Unreasonable Institute
Joshua Walker – Senior Advisor, US Department of State
Page 4 of 15 The Aspen Institute
Overview
Challenges
Structural Challenges
? The primary obstacle limiting the advancement of Palestinian entrepreneurs is the Israeli
occupation. The occupation significantly hampers the mobility of people, goods and
resources, creating an environment which stifles creativity and is hostile to innovation.
? The occupation also inhibits the development of an economy which is sufficiently robust to
generate adequate employment for the growing youth population. Expectedly, the result is
persistent and high unemployment.
? Due to large amounts of aid and donor money flowing into the Palestinian Territories’, the
economy does not have a strong private business sector. Private sector businesses struggle
to recruit talent because they are not able to offer salaries and benefits that are competitive
with the bloated public sector and high-paying international NGOs.
Knowledge-Deficit Challenges
? The education system will require substantial reforms in order to effectively provide
Palestinian youth with the skills necessary to meet private sector needs. Universities need
to expand their entrepreneurial-focused curricula and empower their faculties to provide
potential entrepreneurs with the tangible skills needed to sustain entrepreneurial business
ventures.
? Entrepreneurs lack the basic skills to launch a business, determine financial needs, and
attract investors. The infrastructure needed to foster entrepreneurs is underdeveloped in
the Palestinian Territories. There is a need to build up the resources and mentorship
systems that will aid the development of a Palestinian entrepreneurial mindset. There is
therefore a strong need for mentorship and guidance of young entrepreneurs.
Social Challenges
? Women only make up about 16% of the workforce in the Palestinian Territories
3
. This is
partly due to the conservative culture, as well as to the generally austere employment
landscape. The female labor market, therefore, is a large and underdeveloped economic
resource.
? Risk and innovation go hand-in-hand. However, the private sector in the Palestinian
Territories is notably risk averse. This presents a serious obstacle for capital-seeking
entrepreneurs.
partnersforanewbeginning.org Page 5 of 15
Opportunities and Assets
? Given local conditions under occupation, Palestinians have proven to be creative in their
ability to solve problems and create opportunity in spite of restrictions.
? While the education system requires reform, the general population is highly educated. In
particular, there are high levels of language proficiency not only in Arabic, but in English
and Hebrew as well.
? Technical education in sectors of IT and engineering is competitive as well, despite needs
for hands on training, internships and mentorship. The IT sector should be emphasized as a
fertile area for entrepreneurship, since it is not inhibited by the restricted mobility imposed
by the occupation.
? Financial resources do exist in the Palestinian Territories, but access to start-up financing
needs to be more accessible to young entrepreneurs.
Key Areas for Partnership
Current challenges can be overcome by developing and supporting innovation and entrepreneurial
talent. There are several partnership opportunities that can tremendously advance the
entrepreneurial ecosystem in the Palestinian Territories. The most effective partnerships focus on:
Mentorship | Education | Capital
p. 6 p. 10 p. 12
DELEGATE TESTIMONIALS
“Even with great perseverance and ideas, entrepreneurs and
technology companies in Palestine will need to connect with the
worldwide ecosystem of peers to share ideas and reduce their
potentially crippling isolation. More fundamentally, communities
and institutions must be willing support the culture of risk-taking
that allows a startup ecosystem to thrive… Palestine is working
to stand on its own and needs the great seed of an innovation
ecosystem: active collaboration with the outside world.”
- Elliott Adams
Page 6 of 15 The Aspen Institute
Several organizations are
already leading the way in
fostering entrepreneurship in
their local communities:
Tomorrow’s Youth Organization
(TYO)
TYO is an NGO working to advance
disadvantaged populations and
communities in the Middle East. It
has created the Fostering Women
Entrepreneurs in Nabulus program
which aims to increase women’s
participation in the labor force and
promotes economic empowerment
through programs that enhance
women’s business skills and self-
confidence. TYO supports an
incubation center for women
entrepreneurs working to grow a
sustainable business.
Additionally, it offers training in
marketing, access to capital, IT and
business English while also
facilitating mentor relationships.
Diyar Consortium
The Diyar Consortium focuses on
community building and works to
empower children, youth and
women. Diyar encourages
Palestinians to embrace their
cultural identity through leadership
camps and cultural development
programs, and encourages
entrepreneurial skills.
Mentorship
An Invaluable and Accessible Resource
Entrepreneurs around the world face the daunting challenge of turning an exciting idea into a
profitable, competitive and scalable business. Mentorship, therefore, is perhaps the most valuable
resource to fill that knowledge-gap. With thoughtful guidance, entrepreneurs can avoid the
common pitfalls faced by young businesses and gain the confidence necessary to turn their ideas
into successful businesses. Mentors also provide emotional support through what can be a daunting
and confusing battle. That support is especially valuable in a culture unaccustomed to encouraging
entrepreneurs to take risk.
Throughout the delegation, mentorship emerged as one of the
most effective tools which could be deployed to develop a
robust and thriving entrepreneurship ecosystem in the
Palestinian Territories. The creation of a mentorship network
would not only allow for guidance and training on how to
develop new businesses, but also create a support system that
allows entrepreneurs to take greater risks with their ventures.
With local business leaders and Palestinian diaspora from the
United States, the Palestinian Territories can begin to develop
a mentorship network that can help fill one of the critical
knowledge-gaps faced by aspiring Palestinian entrepreneurs
as they attempt to transform their start-up inspirations into
viable business models.
Background
Palestinians have always been encouraged to take advantage
of secure and lucrative job opportunities with the government
or NGOs. Additionally, almost all businesses are family owned
and have less than ten employees
4
. As a result, there are few
role models to encourage potential Palestinian entrepreneurs
to take the risks necessary to launch an innovative business.
But, today’s younger generation of entrepreneurs are
beginning to take bold moves in a territory typically restrained
by uncertainty and occupation. Young Palestinian
entrepreneurs are tremendously creative, innovative and
determined. An effective mentorship network would allow
them to use this talent and create sustainable and viable
businesses locally.
partnersforanewbeginning.org Page 7 of 15
Several universities have already made
progress establishing incubation and
acceleration services. Below are some
examples from the Education Roundtable
hosted by PNB during the PNB
Entrepreneurship Delegation:
Bethlehem University
Bethlehem University’s computer science
program, only five years old, is focused not
only on teaching critical computer science
skills, but also on enhancing students’ private
sector skills. For example, BU recently
launched an internship course for students to
earn credit for doing substantive research or
work experience during the summers.
The institute for Community Partnerships at
Bethlehem University incubates
entrepreneurs with commercially viable
business ideas and provides them with the
skills, consultancy services and partnerships
necessary to become profitable businesses.
BU is looking to build other critical
partnerships that can support private sector
skill building.
University of Hebron
The University of Hebron is located in the
most populous and the poorest district of the
West Bank. Entrepreneurs emerging from the
University of Hebron tend to create
businesses in the agriculture and food
sectors. UH also hosts a prominent IT
department that has a specific focus on multi-
media, web development and mobile web
applications. It also provides
entrepreneurship training to these students.
Palestine Polytechnic University
The Palestine Polytechnic University has
increased efforts to support
entrepreneurship by creating a technology
incubator that targets the large number of
students in the applied sciences, like
engineering. They are also working on
developing curriculum that provides students
with both hard and soft skills, such as
communication and language skills, which are
very much needed to work in the private
sector.
An-Najah University
An-Najah is the largest university in the West
Bank and houses a technology incubator. The
incubator has already graduated five
businesses, three of which were founded by
women. The university also launched an
entrepreneurship and employability center
that focuses on providing entrepreneurship
training and mentorship within the
university.
Recommendations
I. Inspire Entrepreneurship
Many Palestinians are deterred by the risks associated with
entrepreneurship. However, the Palestinian Territories are
already teeming with the talent and creativity that can propel
its economy into the 21
st
century; they simply need to
showcase their existing success stories to inspire and
encourage others. Fledgling entrepreneurs can benefit
immensely from hearing the success stories of international
and local entrepreneurs to understand the challenges and
rewards ahead.
Action Items from the PNB Entrepreneurship Delegation:
- Ribbon.com is working to coordinate an event with
Garage48, a 48-hour event that promotes
entrepreneurship in emerging markets while
teaching participants how to develop an idea into a
working service or prototype. The event is
expected to take place in the West Bank in 2013.
- Global Entrepreneurship Week will expand to the
Palestinian Territories in November 2013, helping
to coordinate events that celebrate
entrepreneurship and connect all players of the
innovation ecosystem.
II. Mentor Start-ups
Mentorship is essential to help an idea become a successful
venture. Along the opaque and challenging entrepreneurial
path, young Palestinians need much guidance. With a dearth of
local talent capable of mentoring the burgeoning pool of
entrepreneurs, international exposure is essential to helping
them overcome the hurdles they face.
Action Items
- At least five of PNB’s delegates and partners have
committed to regularly mentor one or more
Palestinian entrepreneurs, which include
MobiStine, a company developing Arabic-language
healthcare apps for new parents, and GreenTech, a
company that creates customized IT solutions for
sustainability issues. Several delegates and
entrepreneurs are connecting virtually to facilitate
mentorship and to gain a deeper understanding of
the impressive business concepts and capital
needs. Two delegates returned to the Palestinian
Territories a month later to meet with an
Page 8 of 15 The Aspen Institute
entrepreneur whose business specializes in the breeding, fattening and selling of
Marino sheep.
III. Incubation and Acceleration Programs
Traditionally, Palestinians are hesitant to share their nascent business ideas and seek insight from
their peers. However, peer support is a tremendous resource that can significantly advance
business concepts and advance entrepreneurs’ start-ups. Incubators and accelerators offer the
opportunity to benefit from the experiences and technical knowledge of like-minded peers, while
also creating valuable partnership opportunities. Additionally, they immerse entrepreneurs in an
environment of calculated risk-taking, competition, teamwork and perseverance. Those intangible
factors are invaluable to entrepreneurs.
Action Items
- The Unreasonable Institute, an accelerator in Boulder, Colorado focused on global
entrepreneurs working to solve social and environmental issues, has offered to
accelerate the applications of several Palestinian entrepreneurs interested in
participating in its Summer 2013 program.
- The Unreasonable Institute would like to expand its institute globally, including
establishing operations in the Palestinian Territories. In cooperation with the
Palestinian local chapter of PNB and the PNB Secretariat a team will be built to launch
local operations.
IV. Promote Palestinian Talent
The talent and growing entrepreneurial community of the Palestinian Territories is not yet
internationally recognized. In order to stimulate and accelerate its growth, publicity focusing on
promising Palestinian entrepreneurs should be widely distributed.
Action Items
- One PNB delegate is working to produce a short film highlighting the story of an
entrepreneur whom he met in the Palestinian Territories. The film will highlight the
talent and innovation of young Palestinians, thereby promoting the potential of the
region and its young entrepreneurs.
- Two opinion pieces have been written to tell the story of the impressive young
entrepreneurs and the challenges they face. Excerpts are included on the next page.
partnersforanewbeginning.org Page 9 of 15
“As PNB Palestine chair Zahi Khouri described to the group, "Diamonds are created under
pressure, therefore it is only natural that Palestinians entrepreneurs are like diamonds
within this region." …With a commitment for seed-funding and mentorship by the PNB
local chapter, each of these unique Palestinian diamonds were beaming and shining
bright, proving that even in difficult climates such as the Palestinian Territories, where
there is a will there is a way.”
- Joshua Walker from Palestinian “Diamonds” of Entrepreneurship and Innovation,
October 17, 2012
“The culture of entrepreneurship runs deep in Palestine, but there is still a long way to go.
‘We need to encourage youth to think outside the box, take more risks with their business
plans and for this we need the right educational tools, training and exposure to successful
entrepreneurs to inspire our young people,’ explained Dr. Sabri Saidam, co-founder of
Education for Employment Foundation, advisor to the President on Information and
Communication Technology and a board member of PNB Palestine.
As the international community and diaspora look for ways to contribute to the
development of Palestine, our focus needs to be on the future: building partnerships to
support initiatives like the Celebration of Innovation, and helping Palestine create a
sustainable eco-system for entrepreneurship.”
- Vanessa Zuabi from The Celebration of Innovation: Building an Ecosystem for
Entrepreneurship in Palestine, October 24, 2012
Page 10 of 15 The Aspen Institute
Several Palestinian universities
who are emphasizing the need to
support entrepreneurship met with the
delegation:
Bethlehem University
Bethlehem University’s computer science
program, only five years old, is focused not
only on teaching critical computer science
skills, but also on enhancing students’
private sector skills. For example, BU
recently launched an internship course for
students to earn credit for doing
substantive research or work experience
during the summers.
The institute for Community Partnerships
at Bethlehem University incubates
entrepreneurs with commercially viable
business ideas and provides them with the
skills, consultancy services and
partnerships necessary to become
profitable businesses. BU is looking to
build other critical partnerships that can
support private sector skill building.
University of Hebron
The University of Hebron is located in the
most populous and the poorest district of
the West Bank. Entrepreneurs emerging
from the University of Hebron tend to
create businesses in the agriculture and
food sectors. UH also hosts a prominent IT
department that has a specific focus on
multi-media, web development and
mobile web applications. It also provides
entrepreneurship training to these
students.
Palestine Polytechnic University
The Palestine Polytechnic University has
increased efforts to support
entrepreneurship by creating a technology
incubator that targets the large number of
students in the applied sciences, like
engineering. They are also working on
developing curriculum that provides
students with both hard and soft skills,
such as communication and language
skills, which are very much needed to
work in the private sector.
An-Najah University
An-Najah is the largest university in the
West Bank and houses a technology
incubator. The incubator has already
graduated five businesses, three of which
were founded by women. The university
also launched an entrepreneurship and
employability center that focuses on
providing entrepreneurship training and
mentorship within the university.
Education
Inspiring the Next Generation of Entrepreneurs
The Palestinian Territories continue to confront incredible
obstacles when it comes to educating its people, and one of the
principal obstacles is restricted mobility. Palestinians face severe
restrictions on their freedom of movement, hampered by isolated
territories, road blocks, and a lack of infrastructure. As a result,
access to education has suffered tremendously. Consequently, the
Palestinian Territories have many universities in order to reach as
many potential students as possible. One third of the population
attends school, with 250,000 university student among the 1.25
million students total
5
.
Efforts to overcome challenges to mobility are already underway.
The Ministry of Higher Education is investigating online learning
to better adapt to the challenges of the political situation.
However, this initiative has faced its own hurdles in existing
regulations which refuse to accredit e-learning courses because
they do not meet the existing standard that students must spend
75% of time in classrooms.
These dated regulations should be revised in order to leverage
modern technology to overcome the chronic challenges in
education. So far, professors have spearheaded the initiative to
change these policies, but they are looking for international
assistance and models of best practices to supplement their
efforts.
The Palestinian Authority (PA) and local Palestinian private sector
should invest heavily in technology research and curriculum
development that allows professors to teach the most up to date
material, as well as incorporate critical thinking, problem solving
and entrepreneurship skills into existing technical courses. By
freeing up funds for sabbaticals and research opportunities
abroad, the PA and local private sector would all but guarantee the
influx of new ideas and enthusiasm into the Palestinian
Territories’ tech research and development sector, as well as
support curriculum development.
Another area in need of reform is in recasting the expectations for
post-primary and post-secondary education employment. Right
now, expectations are markedly focused on the public sector. In
one survey, 144 of 150 students said they were interested in
working for the government after graduation and 6 of150 said
they were interested in becoming an entrepreneur
6
. With modest
changes in curricula and focus, the Palestinian Territories can
begin to strengthen its culture of entrepreneurship via its
partnersforanewbeginning.org Page 11 of 15
education system through curriculum development, mentorship and housing small incubators
within their universities.
Recommendations
I. Entrepreneurship Curriculum Development
Since the Palestinian Territories produce so many university graduates, offering college courses on
entrepreneurship is an efficient way to inspire potential entrepreneurs and assist those already
creating their own businesses by providing the right tools and information.
Action Items
- A Professor of Entrepreneurship at Loyola University New Orleans is coordinating with
Bethlehem University’s Computer Software department to develop the curriculum of an
entrepreneurship minor.
- Another delegate with HiTech Venture Capital Fund will be continuing the training he
offered during the delegation and returning to the Palestinian Territories to teach the
basics of developing a business plan and creating a business.
II. Enhance IT Talent
Palestinian universities have been able to teach high quality technical skills especially in computer
science and information, communication and technology, which have attracted business
partnerships from multinational corporations such as Cisco Systems, Google, Intel and Hewlett
Packard. The Palestinian Territories need additional job opportunities to leverage the benefits of
this asset.
Action Items
- Several years ago, Zeva Inc. began outsourcing its research and development operations
to Bethlehem. Zeva Inc. has also offered several internships in its R&D office based in
Bethlehem to provide students with training and technical knowledge. Zeva often
recruits these interns as employees following successful completion of their degrees.
Zeva is now connecting another delegate with Palestinian IT talent to help advance his
US healthcare IT startup.
- Zeva Inc. is interested in spearheading a US-based association focused on outsourcing IT
work to the Palestinian Territories, with the hope that it will create job opportunities
and expand technical skills.
Page 12 of 15 The Aspen Institute
Capital
Building the Entrepreneurial Investment Environment
Economic growth in the Palestinian Territories has mainly been the result of foreign aid rather than
a strong private sector. Foreign aid inflates salaries in the private sector and encourages
Palestinians to seek government employment rather than pursuing entrepreneurial or business
opportunities. However, achieving sustainable economic growth is possible by strengthening the
private sector and encouraging trade. Investing in entrepreneurs can lead to an increase in
Palestinian exports and a diverse and thriving economy.
Access to finance in the Palestinian Territories is limited but growing. Currently, there are only two
private equity funds (Siraj and Riyada Enterprise Development) and one venture capital fund
(Sadara Ventures) that provide early-stage financing. However, despite these select few funds,
entrepreneurs still rely heavily on their family networks for venture funding and start-up support.
While family networks may be reliable and flexible, they simply do not possess the expertise or
assets to transform the ideas of brilliant young Palestinians into globally successful products or
companies. Additionally, if entrepreneurs eschew family networks, they often rely on large,
commercial banks which are risk-averse and are equally ill-suited for incubating early-stage
enterprises. Integrating the concepts of angel investing and venture capital into the dialogue
surrounding the investment sector in the Palestinian Territories is one way to overcome these
challenges.
Additionally, if large corporations active in the Palestinian Territories shift their focus from
corporate social responsibility to local investment through research and development, the return
on their investments would be even greater. For example, the Bank of Palestine started a
microfinance fund supported by 5% of its yearly budget. If private companies or multi-national
corporations, worked together to support smaller loans in the territories, those efforts could be
leveraged even further.
One success story that gives the entrepreneurial ecosystem hope is the example of a fresh herb
farm in the Jordan Valley. Early on, it was strapped by numerous issues threatening its growth,
including shortages of water and electricity. However, after obtaining the right financing, this farm
has grown to dominate the market in the Palestinian Territories and is in the process of expanding
to US, Russian, and European markets.
The international business and investment community is beginning to recognize the opportunity in
supporting the Palestinian entrepreneurial ecosystem. For example, Abraaj Capital, Palestine
Investment Fund, Bank of Palestine, Cisco and the European Investment Bank created the Palestine
Growth Capital Fund in early 2012. The Palestine Growth Capital Fund closed its first round at $36
million and will be used for private equity growth capital investments to high growth small and
mid-cap companies in the Palestinian Territories. Abraaj Capital will also support the growth and
development of the SMCs in which it invests and encourage expansion into international markets
7
.
partnersforanewbeginning.org Page 13 of 15
Recommendation:
I. Promote Angel Investment
Palestinian start-ups have a difficult time accessing early stage capital. Commercial banks consider
start-ups to be too risky and the rates on micro-finance loans are often too high. Entrepreneurs are
forced to rely on family members and savings to grow their businesses, which is often insufficient.
Angel investment would help develop new ventures and diversify the economy. While there are
risks to angel investing, Palestinian investors need to focus on fiscal and social potential of
supporting exceptionally innovative Palestinians. In addition to lucrative profits and personal
fulfillment, investors play a major role in expanding the economy and providing job opportunities.
Angel investing also creates a support network for entrepreneurs, introducing them to people with
a legitimate interest in their success who are also capable of advancing their business concepts.
Action Items:
- A couple delegates are exploring the best structure for an angel investment group in the
Palestinian Territories.
- At least four delegates are interested in investing in entrepreneurs they mentored in
preparation for the Celebration of Innovation in Ramallah.
DELEGATE TESTIMONIALS
"It was extremely refreshing to see the amount of
opportunity on the ground in Palestine.”
- Hany Rashwan
Page 14 of 15 The Aspen Institute
Conclusion
It takes courage in any society to become an entrepreneur. In the Palestinian Territories, it takes
more. Of the many observations noted by the Partners for a New Beginning Delegation to the
Palestinian Territories in October 2012, perhaps the most apparent was the incredible resilience of
the Palestinian people. Of course, the entrenched structural, resource, and social challenges facing
Palestinian entrepreneurs never quite faded from view. But, despite those austere conditions, it
was the relentless optimism, tireless work ethic, and undying creativity of the Palestinian
entrepreneurs which left a lasting impression on the PNB delegates.
In the eyes of the delegates, many of whom were once or currently are entrepreneurs themselves,
the latent potential of the Palestinian entrepreneurship eco-system was never more apparent than
during the delegation’s keystone event: the Celebration of Innovation in Ramallah. With the
interests of the delegates and entrepreneurs firmly in sync, it was the perfect example of what
Partners for a New Beginning does best: bringing together a diverse group of stakeholders with
common interests for the benefit of the local community and society at large.
By focusing on the three areas of mentorship, education, and capital financing—Partners for a New
Beginning is committed to working to bridge partnerships that advance the creation of an eco-
system of entrepreneurship in the Palestinian Territories. Thoughtful and sustained contributions
to these areas will undoubtedly help orient the Palestinian economy towards a future of growth and
reduced unemployment.
DELEGATE TESTIMONIALS
“The amount of potential for entrepreneurship in Palestine is unbelievable.
The creativity and innovation is inherent. Yes, many of the young
entrepreneurs we met with lacked a full understanding of how to start and
scale a business; but their hunger for learning was immeasurable. That
simply led me to imagine what it would be like if they had the exposure to
more entrepreneurs from all across the globe. The next Facebook could
come from a young Palestinian mind; they just need the exposure to grow.
With organizations like Partners for a New Beginning helping to facilitate
that exposure we may be close to the next big Palestinian innovation.”
- Brenden Chaney
"In 4 days, the Aspen Institute…helped us understand life through the eyes
of Palestinians and gave us the opportunity to see some of the most
revered and famed sites of Jerusalem. This trip was life-changing. It helped
me understand more than I have ever understood about how to build an
entrepreneurial ecosystem, and offered me so many real perspectives on
an amazingly complex conflict and its history. I am coming away from this
trip with a profound hope for the future of Palestine. And largely thanks to
ability of Partners for a New Beginning to bridge powerful human
relationships across walls that others fight to keep standing."
- Teju Ravilochan
partnersforanewbeginning.org Page 15 of 15
References
1
Kershner, Isabel. West Bank’s Emerging Silicon Valley Evades Issues of Borders. The New York
Times. July 29, 2012.http://www.nytimes.com/2012/07/30/world/middleeast/palestinians-
building-tech-hub-in-west-bank.html?_r=1&
2
Daaud, Yousef; Sadeq, Tareq; Tartir, Alaa; Shanti, Ruba. The Global Entrepreneurship Monitor:
Palestine Country Report 2009. Palestine Economic Policy Research Institute. 2010.http://www.mas.ps/2012/sites/default/files/country report 2009%20 final.pdf
3
Official meeting with Jerusalem Business Forum, East Jerusalem
4
Sabri, Dr. Nidal Rashid. Palestinian Family Businesses. 2008.
5
Official meeting with Dr. Sabri Saidam, co-founder of Education for Employment Foundation,
advisor to the President on Information and Communication Technology and a board member of
PNB Palestinian Territories
6
Official meeting with Dr. Sabri Saidam, co-founder of Education for Employment Foundation,
advisor to the President on Information and Communication Technology and a board member of
PNB Palestinian Territories
7
Abraaj announces first closing of Palestine fund. Emirates 24/7. March 12, 2012.http://www.emirates247.com/business/economy-finance/abraaj-announces-first-closing-of-
palestine-fund-2012-03-12-1.448039
DEVELOPING AN ENTREPRENEURIAL
ECOSYSTEM IN THE PALESTINIAN TERRITORIES:
Key Opportunities for Partnerships
doc_138787560.pdf