In Israel, Commerce amid Conflict

Michal Chelbin for TIME
Incubating Peter Assaf, CEO of Renopharm, in his lab at the NGT building

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In June, just weeks after the Gaza flotilla incident in which Israeli commandos raided a boat, killing nine activists, I asked a group of NGT members how the episode affected the working atmosphere. Long silence. After some mumbled responses about focusing on business, Amal Ayoub, the CEO of Metallo-Therapy, weighed in. "I think we avoid conversations. There is a feeling that if you say something outside of the mainstream Israeli consensus, you are the enemy." But, she added, "if we say something critical, it is not because we are the enemy. It is because we care. We are citizens, and we want to make this a better place." In rapid succession, many of the other Arab entrepreneurs agreed.

Ayoub, who holds a Ph.D. in bio-engineering, expressed her frustration with the lack of opportunities in Israel despite her impressive résumé, which includes a degree from the Technion, often compared with MIT. "To get to this point, we are the best of the best," she said. "When I graduated, I had no opportunities. My students were getting job offers, and no one called me for an interview."

Very quickly the conversation moved from the dearth of opportunities to discrimination to the lack of infrastructure in the Arab sector and beyond, growing heated in the process. The differences in opinion, though, did not always fall along Jewish-Arab lines. When Peter Assaf, the CEO of Renopharm, argued that the Israeli government needed to create institutions and infrastructure for the Arab sector, Ayoub roundly objected. "We are part of Israeli society," she said. "Why should we have separate institutions?"

Visibly agitated, Assaf tried to steer the conversation back to business. A chemist with a degree from Philipps University in Marburg, Germany, and a Ph.D. from the Hebrew University of Jerusalem, he stressed his support of NGT's vision: "I believe in this collaboration of Arab and Jewish businesses. Our success is together with Jews. They are part of that vision." But, he continued, "what we really need is support from investors."

For a good 45 minutes, the various members of NGT listened to one another. They argued, they defended their positions, and they continued to disagree but they also listened. Then they got back to work. It was a testament of sorts to the role that an organization like NGT can play.

Then again, NGT faces an issue that transcends the Middle East conflict: financing. The global economic slide has sharply reduced venture funding particularly for very-early-stage companies. As a result, in July some longtime shareholders decided to decrease their investments, prompting NGT's board to make some organizational changes, like removing the CEO while it seeks an additional $12 million in funds to invest in NGT's portfolio companies including $5 million in commitments from the incubator's founders over the next six years. "These changes will help NGT to invest in its portfolio companies and fund our operations," says Said, the acting CEO. "It will make us more attractive to potential companies and maximize our value."

It's just one more hurdle in NGT's eight-year fight to move from conflict to commerce. Perhaps Helmi Kittani explained it best when he said, "From my perspective, the most important aspect of NGT's success has been the process itself namely that we proved that it was possible for Arab and joint Jewish-Arab ventures to initiate, attract investment from both Arab and Jewish investors, become stable and grow. For our investors, the goal was not necessarily to turn a profit but to create the social fabric that would stimulate entrepreneurship. From that perspective, NGT has already provided an enormous return on investment." Perhaps so, although robust profitability has a way of unifying people too.

This article originally appeared in the August 16, 2010 issue of TIME Europe.