Palestine News
Palestine Information Service | 12.06.2008 16:28 | Palestine
Question: What do America's premier investor, Warren Buffett, and Iran's president, Mahmoud Ahmadinejad, have in common? Answer: They've both made a bet about Israel's future.
Ahmadinejad declared on Monday that Israel "has reached its final phase and will soon be wiped out from the geographic scene."
By coincidence, I heard the Iranian leader's statement on Israel Radio just as I was leaving the headquarters of Iscar, Israel's famous precision tool company, headquartered in the Western Galilee, near the Lebanon border. Iscar is known for many things, most of all for being the first enterprise that Buffett bought overseas for his holding company, Berkshire Hathaway.
Buffett paid $4 billion for 80 percent of Iscar and the deal just happened to close a few days before Hezbollah, a key part of Iran's holding company, attacked Israel in July 2006, triggering a monthlong war. I asked Iscar's chairman, Eitan Wertheimer, what was Buffett's reaction when he found out that he had just paid $4 billion for an Israeli company and a few days later Hezbollah rockets were landing outside its parking lot.
Buffett just brushed it off with a wave, recalled Wertheimer: "He said, 'I'm not interested in the next quarter. I'm interested in the next 20 years.' " Wertheimer repaid that confidence by telling half his employees to stay home during the war and using the other half to keep the factory from not missing a day of work and setting a production record for the month. It helps when many of your "employees" are robots that move around the buildings, beeping humans out of the way.
So who would you put your money on? Buffett or Ahmadinejad? I'd short Ahmadinejad and go long Warren Buffett.
Why? From outside, Israel looks as if it's in turmoil, largely because the entire political leadership seems to be under investigation. But Israel is a weak state with a strong civil society. The economy is exploding from the bottom up. Israel's currency, the shekel, has appreciated nearly 30 percent against the dollar since the start of 2007.
The reason? Israel is a country that is hard-wired to compete in a flat world. It has a population drawn from 100 different countries, speaking 100 different languages, with a business culture that strongly encourages individual imagination and adaptation and where being a nonconformist is the norm. While you were sleeping, Israel has gone from oranges to software, or as they say around here, from Jaffa to Java.
The day I visited the Iscar campus, one of its theaters was filled with industrialists from the Czech Republic, who were getting a lecture — in Czech — from Iscar experts. The Czechs came all the way to the Israel-Lebanon border region to learn about the latest innovations in precision tool-making. Wertheimer is famous for staying close to his customers and the latest technologies. "If you sleep on the floor," he likes to say, "you never have to worry about falling out of bed."
That kind of hunger explains why, in the first quarter of 2008, the top four economies after America in attracting venture capital for start-ups were: Europe $1.53 billion, China $719 million, Israel $572 million and India $99 million, according to Dow Jones VentureSource. Israel, with 7 million people, attracted almost as much as China, with 1.3 billion.
Boaz Golany, who heads engineering at the Technion, Israel's M.I.T., told me: "In the last eight months, we have had delegations from I.B.M., General Motors, Procter & Gamble and Wal-Mart visiting our campus. They are all looking to develop R & D centers in Israel."
Ahmadinejad professes not to care about such things. He was — to put it in American baseball terms — born on third base and thinks he hit a triple. Because oil prices have gone up to nearly $140 a barrel, he feels relaxed predicting that Israel will disappear, while Iran maintains a welfare state — with more than 10 percent unemployment.
Iran has invented nothing of importance since the Islamic Revolution, which is a shame. Historically, Iranians have been a dynamic and inventive people — one only need look at the richness of Persian civilization to see that. But the Islamic regime there today does not trust its people and will not empower them as individuals.
Of course, oil wealth can buy all the software and nuclear technology you want, or can't develop yourself. This is not an argument that we shouldn't worry about Iran. Ahmadinejad should, though.
Iran's economic and military clout today is largely dependent on extracting oil from the ground. Israel's economic and military power today is entirely dependent on extracting intelligence from its people. Israel's economic power is endlessly renewable. Iran's is a dwindling resource based on fossil fuels made from dead dinosaurs.
So who will be here in 20 years? I'm with Buffett: I'll bet on the people who bet on their people — not the people who bet on dead dinosaurs.
Ahmadinejad declared on Monday that Israel "has reached its final phase and will soon be wiped out from the geographic scene."
By coincidence, I heard the Iranian leader's statement on Israel Radio just as I was leaving the headquarters of Iscar, Israel's famous precision tool company, headquartered in the Western Galilee, near the Lebanon border. Iscar is known for many things, most of all for being the first enterprise that Buffett bought overseas for his holding company, Berkshire Hathaway.
Buffett paid $4 billion for 80 percent of Iscar and the deal just happened to close a few days before Hezbollah, a key part of Iran's holding company, attacked Israel in July 2006, triggering a monthlong war. I asked Iscar's chairman, Eitan Wertheimer, what was Buffett's reaction when he found out that he had just paid $4 billion for an Israeli company and a few days later Hezbollah rockets were landing outside its parking lot.
Buffett just brushed it off with a wave, recalled Wertheimer: "He said, 'I'm not interested in the next quarter. I'm interested in the next 20 years.' " Wertheimer repaid that confidence by telling half his employees to stay home during the war and using the other half to keep the factory from not missing a day of work and setting a production record for the month. It helps when many of your "employees" are robots that move around the buildings, beeping humans out of the way.
So who would you put your money on? Buffett or Ahmadinejad? I'd short Ahmadinejad and go long Warren Buffett.
Why? From outside, Israel looks as if it's in turmoil, largely because the entire political leadership seems to be under investigation. But Israel is a weak state with a strong civil society. The economy is exploding from the bottom up. Israel's currency, the shekel, has appreciated nearly 30 percent against the dollar since the start of 2007.
The reason? Israel is a country that is hard-wired to compete in a flat world. It has a population drawn from 100 different countries, speaking 100 different languages, with a business culture that strongly encourages individual imagination and adaptation and where being a nonconformist is the norm. While you were sleeping, Israel has gone from oranges to software, or as they say around here, from Jaffa to Java.
The day I visited the Iscar campus, one of its theaters was filled with industrialists from the Czech Republic, who were getting a lecture — in Czech — from Iscar experts. The Czechs came all the way to the Israel-Lebanon border region to learn about the latest innovations in precision tool-making. Wertheimer is famous for staying close to his customers and the latest technologies. "If you sleep on the floor," he likes to say, "you never have to worry about falling out of bed."
That kind of hunger explains why, in the first quarter of 2008, the top four economies after America in attracting venture capital for start-ups were: Europe $1.53 billion, China $719 million, Israel $572 million and India $99 million, according to Dow Jones VentureSource. Israel, with 7 million people, attracted almost as much as China, with 1.3 billion.
Boaz Golany, who heads engineering at the Technion, Israel's M.I.T., told me: "In the last eight months, we have had delegations from I.B.M., General Motors, Procter & Gamble and Wal-Mart visiting our campus. They are all looking to develop R & D centers in Israel."
Ahmadinejad professes not to care about such things. He was — to put it in American baseball terms — born on third base and thinks he hit a triple. Because oil prices have gone up to nearly $140 a barrel, he feels relaxed predicting that Israel will disappear, while Iran maintains a welfare state — with more than 10 percent unemployment.
Iran has invented nothing of importance since the Islamic Revolution, which is a shame. Historically, Iranians have been a dynamic and inventive people — one only need look at the richness of Persian civilization to see that. But the Islamic regime there today does not trust its people and will not empower them as individuals.
Of course, oil wealth can buy all the software and nuclear technology you want, or can't develop yourself. This is not an argument that we shouldn't worry about Iran. Ahmadinejad should, though.
Iran's economic and military clout today is largely dependent on extracting oil from the ground. Israel's economic and military power today is entirely dependent on extracting intelligence from its people. Israel's economic power is endlessly renewable. Iran's is a dwindling resource based on fossil fuels made from dead dinosaurs.
So who will be here in 20 years? I'm with Buffett: I'll bet on the people who bet on their people — not the people who bet on dead dinosaurs.
Facts about the 100th smallest country, with less than 1/1000th of the world's population.
Israel has the highest ratio of university degrees to the population in the world.
Israel is the only liberal democracy in the Middle East.
In 1984 and 1991, Israel airlifted a total of 22,000 Ethiopian Jews at risk in Ethiopia to safety in Israel.
When Golda Meir was elected Prime Minister of Israel in 1969, she became the world's second elected female leader in modern times.
When the U. S. Embassy in Nairobi, Kenya was bombed in 1998, Israeli rescue teams were on the scene within a day - and saved three victims from the rubble.
Israel has the third highest rate of entrepreneurship - and the highest rate among women and among people over 55 - in the world.
Relative to its population, Israel is the largest immigrant-absorbing nation on earth. Immigrants come in search of democracy, religious freedom, and economic opportunity.
Israel was the first nation in the world to adopt the Kimberly process, an international standard that certifies diamonds as "conflict free."
Israel has the world's second highest per capita of new books.
Israel is the only country in the world that entered the 21st century with a net gain in its number of trees, made more remarkable because this was achieved in an area considered mainly desert.
Israel has more museums per capita than any other country.
Israel leads the world in the number of scientists and technicians in the workforce, with 145 per 10,000, as opposed to 85 in the U.S., over 70 in Japan, and less than 60 in Germany. With over 25% of its work force employed in technical professions. Israel places first in this category as well.
Israel has the highest per capita ratio of scientific publications in the world by a large margin, as well as one of the highest per capita rates of patents filed.
In proportion to its population, Israel has the largest number of startup companies in the world. In absolute terms, Israel has the largest number of startup companies than any other country in the world, except the US (3,500 companies mostly in hi-tech).
Israel is ranked #2 in the world for VC funds right behind the US.
Israel has the highest percentage in the world of home computers per capita.
Outside the United States and Canada, Israel has the largest number of NASDAQ listed companies
Israel has the highest average living standards in the Middle East. The per capita income in 2000 is over $17,500, exceeding that of the UK.
With more than 3,000 high-tech companies and start-ups, Israel has the highest concentration of hi-tech companies in the world (apart from the Silicon Valley).
With an aerial arsenal of over 250 F-16s, Israel has the largest fleet of the aircraft outside of the US.
Israel's $100 billion economy is larger than all of its immediate neighbors combined.
The cell phone was developed in Israel by Motorola-Israel. Motorola built its largest development center worldwide in Israel.
Windows NT software was developed by Microsoft-Israel.
The Pentium MMX Chip technology was designed in Israel at Intel.
Voice mail technology was developed in Israel.
AOL's instant message program was designed by an Israeli software company.
Both Microsoft and Cisco built their only R&D facilities outside the US in Israel
The city of Beer Sheva in Israel has the highest percentage in the world of Chess Grand Masters per capita – one for every 22,875 residents.
On a per capita basis, Israel has the largest number of biotech start-ups
Israel has the largest raptor migration in the world, with hundreds of thousands of African birds of prey crossing as they fan out into Asia.
Twenty-four percent of Israel's workforce holds university degrees -- ranking third in the industrialized world, after the United States and Holland -- and 12 percent hold advanced degrees
Palestine Information Service
