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NOTEBOOK: Israel turns to tech


The Greater Des Moines Partnership and the Jewish Federation of Greater Des Moines hosted Israeli Ambassador to the United States Ron Derner for a series of events that included a Des Moines Embassy Club lunch I attended.

Derner seemed direct and at ease in his comments to an audience that included many business leaders from around the state.

Interestingly, Derner was born and raised in Miami Beach, Fla., and graduated from the Wharton School of Business at the University of Pennsylvania before continuing his studies at Oxford University in the United Kingdom. He spent some time with Gov. Kim Reynolds and state lawmakers before heading downtown for the lunch.

In introducing Derner, Jay Byers, CEO of the Partnership, noted that in 2017, Iowa exports to Israel were worth about $48 million. In 2018, that figure had grown to $80 million. He mentioned local accelerators devoted to insurance and agritech as two areas that might help strengthen trade ties with Israel.

Derner said Israel has become a hub of innovation, particularly in agriculture, artificial intelligence and information technology. That has drawn delegations from India, South America and elsewhere wondering what is going on in the tiny nation. “You guys made the desert bloom,” they say, according to Derner. That was a reference to drip irrigation technology used in the arid region.

Derner said Israel was established as a socialist regime in 1948 and had the same GDP per capita as Egypt and Jordan. “I don’t want to debate the merits of socialism, but one thing I’m sure of is that socialism and genius do not go together,” Derner said. “It is the best straitjacket for genius and the best straitjacket for innovation and productivity. … The economic importance of the Soviet Union, even at the height of its power, was not very impressive.

“We had this situation where the Jews were very successful economically, almost everywhere that they live, but for some reason in Israel, they weren’t,” Derner said. “There was a theory that Israel just got all the lemons among the Jews. Then some of these lemons would move and go to Silicon Valley or New York or Boston or Miami, and all of a sudden magically the lemons would turn into plums.”

Things are different now. “The story of the last 20 years has been the story of Israel liberalizing its economy,” Derner said. “The person who really deserves a lot of credit is the current prime minister, Benjamin Netanyahu. One example: introducing competition to a monopoly phone service, which immediately dropped rates 85%. Banks and refineries were privatized. Housing prices are high, but annual economic growth is 4%, the same as the unemployment rate.

Innovation will be a key, and agriculture is a big part of that, Derner said. “Israel is an innovation nation. Eighty percent of the leading technology companies in the world have [research and development] facilities in Israel,” he added.

Quip: Israel recycles nearly 90% of its water. “Someone joked that when you flush a toilet in Israel, you say, ‘See you later,’ ” Derner noted.

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