Bennett unveils new Arab entrepreneurship incentives

Finance minister says Arab sector faces more challenges than the Jewish one; Nazareth mayor requests local manufacturing park.

By NIV ELIS
Bennett at Presidents Conference in Jerusalem, Febraury 17 2014 (photo credit: MARC ISRAEL SELLEM)
Bennett at Presidents Conference in Jerusalem, Febraury 17 2014
(photo credit: MARC ISRAEL SELLEM)
Economy Minister Naftali Bennett unveiled two initiatives in his ministry’s Chief Scientist’s Office to encourage entrepreneurship in the Arab sector on Tuesday.
The first will allow early-stage Arab businesses to receive 85 percent of funding for research grants from the Office of the Chief Scientist. The office typically offers matching grants for such projects, meaning the companies had to raise 50% of the funds. Under the new initiative, they will only have to raise 15% of the money for projects costing up to NIS 2 million.
“It’s not just a matter of money, the difference between 50% and 85% is the difference between zero and one – it’s an enabler,” Economy Ministry Chief Scientist Avi Hasson told The Jerusalem Post.
The second initiative provides up to 200 hours of mentoring for business development, for which the Office of the Chief Scientist will subsidize 75% of the costs. Alternatively, the office will pay 75% of up to NIS 120,000 for conducting market surveys to assess the landscape and help lay out plans.
Bennett, who began the day by meeting with Arab start-ups, noted that the Arab sector faces more difficulties than the Jewish one.
“For an Arab it’s harder in education and harder to get accepted to work,” he said.
“One [entrepreneur] said to me that you have to be three times as successful to reach the same place as a Jewish resident in Israel.”
Jewish employers needed to look past the name atop the résumé when hiring and take advantage of the burgeoning talent from the country’s minorities, Bennett said. One Technion-Israel Institute of Technology graduate he met said he could not find a job despite near perfect test scores.
The entrepreneurs the minister met surprised him with the quality of their education, business proposals and pitches.
“I see Arab hi-tech at a tipping point,” Bennett said. “If we act correctly in the next five years and give Arabic hi-tech the right push, we won’t have to intervene in another five years.”
He compared the sector to a rock being pushed up a hill, that would continue rolling forward on its own once it reached the approaching peak.
Addressing a group of local 7th-graders who attended the event in Nazareth, Bennett said: “Don’t limit your vision or your hopes. There will be difficulties, difficulties a Jewish kid doesn’t experience, to my sorrow, but don’t give up.”
Participants at the event, which included members of the Arab business community, political leaders and NGOs, offered general praise to the initiatives, but noted two recurring issues that still needed to be addressed.
The first was the need to create businesses closer to home.
“Most of the Arab sector is in the North, while most of the big companies are in the Center, and this geographic distance is a problem,” said Ayman Saif, director of the Economic Development Authority for the Minority Sector in the Prime Minister’s Office.
Ibrahim Bahir, CEO of Rushdi foods, a popular tehina and halva producer, joked that the Arab city of Umm al-Fahm was a hotel; its residents emptied the place during the day to work elsewhere, and came back at night to sleep.
“It cannot be that we don’t have an industrial zone,” Nazareth Mayor Ali Salam told Bennett.
“My request is that you help Nazareth and help the Arab sector reach real equality.
We live in this country, so we want real equality.”
Bennett promised to look in to the issue.
The second issue was the need to get better buy-in from the Arab sector.
“There’s money on the floor right now, you just need to bend down and take it,” Bahir said.
According to Hasson, the number of Arab applicants for grants is “minimal.” The hope was that Tuesday’s event would be the launching point for reaching out to the community, encouraging them to take advantage of the state’s tools and helping them learn how to do so effectively.
“We’re saying: There are attractive offer here, take advantage of them!” said Hasson.
Throughout the day, Israeli officials reiterated that the tools would not only help Arab Israelis, but also the economy in general.
“Innovation likes diversity. The more you have different kinds of people in your company, the better it will be,” he said. For every shekel of investment his office makes, the economy eventually gets back five, he said.