Erel Margalit: Technology can create bridges between Israel, Gulf and region
There are several main areas that can underpin this new world of technology, innovation and cooperation in the Gulf.
By SETH J. FRANTZMANErel Margalit with the UAE Food Security Minister Mariam bint Mohammed Saeed Hareb Al Muhairi.(photo credit: ELAD GUTMAN)
Israel and new peace partners in the Gulf have much to cooperate on, and technology can build bridges to this cooperation in the region, according to Erel Margalit, founder and executive chairman of Jerusalem Venture Partners and the Margalit Startup City.In the wake of the Abraham Accords, he led a delegation to the United Arab Emirates.Today, Margalit sees how new realms are opening up and looks to take cooperation to the next level, building on experience in Israel, the Mediterranean region and the US.“Israeli companies can create their own hubs there [in the UAE],” he said.There are several main areas that can underpin this new world of technology, innovation and cooperation in the Gulf, he said. They include healthcare, information technology, food technology and agriculture technology. Many of these new applications for technology have names like agritech, foodtech and fintech.It hasn’t been an easy year, Margalit said, referring to the difficulties the pandemic has brought. He launched the Margalit Startup City in New York this year and has emphasized work in digital health and joint ventures.“We did a lot with the community, and we did social initiatives and entrepreneurship,” he said. “The message to our companies was grow and find the opportunity to grow, and you saw the technology that resulted. Israeli hi-tech was so crucial to so many to continue to operate.”A theme emerged from the pandemic of how technology can serve us all, even in remote locations or doing work from home, Margalit said.Technology can also create bridges, he said, adding: “Israel has created new chapters in country-to-country diplomacy and public and private initiatives, which take models of cooperation to next level and make it concrete.”AdvertisementMargalit founded JVP 26 years ago and is a pioneer in the venture-capital industry. It is a globally recognized brand that has raised $1.4 billion from institutional and private investors. This could play a major role in Israel’s new ability to work openly in the Gulf. HE LOOKS at the UAE and notes that while it is a small country, the Emiratis are major players in the region. It also is a hub that connects to many other countries.“For instance, an insurance company in Dubai gets you to Riyadh, Casablanca and also to huge markets in Pakistan, Malaysia and Indonesia,” he said. “That is access to markets we didn’t know or understand well, and that is great.”We are in a tachlis mode, Margalit said, using the Hebrew term for getting down to business or getting to the main point. He foresees doing something similar to the UAE as he did in New York with his Startup City concept. However, the concentration may be different, such as focus on food tech and agritech.“So we will look at location sites that we are seeing and we will see in Dubai and Abu Dhabi. I want to invest with local players. I am a facilitator, so a lot of my companies need help in scaling and if I can help them meet banks and insurance companies that are available and understand culturally what can be done, this can be as big a region as Europe. It will be a big region for Israeli companies.” The UAE also provides a space to meet others such as Palestinians, in a different area. Like many who have described the cultural differences in the UAE, Margalit notes that doing business with the Emirates is not just about profit, but about people and making an impact. This can connect with the concept of tikkun olam, making a social impact through business, he said.It also links to the concept of linking cities together, from across the Mediterranean to the Gulf.“This is about thinking differently about the region,” he said. “We will invite cities to participate.”Margalit sees cities as being dynamic and strong in contrast to the issues countries may face between each other. He cites Casablanca as an example of a city pioneering fintech and insurtech, or insurance technology.“Morocco is a significant country in North Africa in agriculture, and they are facing Africa, and we don’t know Africa well enough,” he said. Israel and Morocco are normalizing relations.There will be challenges ahead. Work in the Gulf will require patience and listening. Margalit suggests Israelis do a listening tour of the Gulf and be modest.“These are challenges that all of us need to face and understand subtly,” he said. “We are leaders in technology, while the Emiratis are business leaders and larger traders.”Trust has been built over the last half decade with the UAE. Israeli companies have done business there in the past through subsidiaries.“There is a good foundation that the political agreement enables, and the challenge is to take it to the region and not alienate anyone and invite people to be part of an initiative,” Margalit said.This will be important not only across the spectrum from fintech to cybersecurity, but also for the next generation of innovators, he said, adding: “What we are doing together is entrepreneurial. It’s not the products; it’s about the stories – letting people look at things from a different vantage point.”The upcoming EXPO 2020 in Dubai, postponed from last year and being held this year, is important. Margalit is putting forward many ideas around this year’s big event.He also supports involving Palestinians in the process and in the city of Jerusalem.“We will be working together in this new paradigm, even though we have some things we need to solve,” Margalit said. “That gives us possibilities to solve our own conflict, [and] that shows us what we can gain.”
