The politicians couldn’t form a coalition, the hi-tech sector actually did

Contrary to popular belief, the need to form a coalition does not exist only in the political world.

August 8, 2019 17:41
2 minute read.
A CYBER hotline facility, part of Israel’s hi-tech innovative sector

A CYBER hotline facility, part of Israel’s hi-tech innovative sector. (photo credit: REUTERS)

Come September, Israeli citizens will be called to cast their votes yet again after a failure to form a new government followed April’s elections. Whether ideological disputes led to the dissolving of the 21st Knesset or not, at the end of the day, the upcoming elections are due to the failure to reach the required agreements in order to form a political coalition.

Contrary to popular belief, the need to form a coalition does not exist only in the political world. This is in fact a broad social phenomenon. This is especially true in Israel, which was founded on Jewish values based on mutual responsibility, cooperation and community; a society in which family values are held in high esteem. Building “coalitions” lies at the very root of the State of Israel.

This is also relevant in the context of the Start-Up Nation. In recent years, these cooperative values have entered the business world and the hi-tech industry operating in areas that are highly regulated or reliant on government mandates. In the form of coalitions designed to promote the shared goals of certain interest groups, especially vis-à-vis government agencies and regulators.

A business coalition is comprised of a number of companies, and other stakeholders, whether for profit or not, that share a common interest. Members of a coalition may, for instance, be competing companies encountering similar regulatory challenges and barriers or which are interested in promoting legislation that will, for example, create incentives in a certain area. The coalition, when well-managed, delivers a cohesive message and agenda. It is a lobbying process that allows for a more effective and impactful advocacy effort than a similar one by a single company.

US big tech understands the importance of having a footprint in Washington and has been leading lobbying efforts to promote business interests. Five of the largest US tech companies spent a total of $64.2 million in federal lobbying in 2018. According to the Center for Responsive Politics, total federal lobbying spending in the US reached $3.42 billion in 2018, a record amount. The pharmaceutical industry spent more on lobbying than any other industry, a total of $280 million in 2018.

Some of the barriers to leading an advocacy effort in the US are the significant costs, time and resources involved; a heavy toll to carry by one single company. However, when resources and costs are shared among several companies and stakeholders, it becomes a more achievable effort for most.

The effectiveness and transparency of working with coalitions, as well as the fact that they prevent the appearance of prioritizing one company over another, has made coalitions a preferred mode of lobbying in the eyes of the US Congress, government departments and agencies. Typically, the coalition will have a website that will list, among other items, fact sheets, legislative updates and live streams of relevant social media posts. Along with the advantages there are challenges. As in any group, conflicting egos and corporate cultures might sometimes make it difficult for the entire group to function smoothly.

“The whole is greater than the sum of its parts.” In this case, too, the component parts get a different meaning and weight when they are part of a whole. Some see flaws in lobbying and question its effectiveness. However, having an understanding and monitoring the legislative and policy trends and their possible business effects is a key for Israeli companies operating in the US market.

The writer is partner and co-chair of the Holland & Knight law firm’s Israel practice.

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