Cooperation between Bahrain and Israel stepped up a level this weekend with the prominent participation of both countries in the Munich Security Conference.

Undersecretary for Political Affairs of the Foreign Ministry Dr. Sheikh Abdullah bin Ahmed Al Khalifa represented Bahrain in the session titled “Abrahamic Agreements and Peace Options,” and shed light on a strong alliance between two countries in the Middle East that have common interests aimed at creating a more secure region in the face of the rise of extremism and terrorism that has threatened both countries and has destabilised others nations of the Middle East.

“If this security cooperation between Bahrain and Israel would mean providing more stability and security, so be it. If it would mean saving the lives of innocent civilians, so be it. That is why during a number of visits of the head of the Mossad to Bahrain, it was publicly announced in the Bahrain News Agency. Probably, the first time it was announced was in September 2020 and in May 2021 that yes the head of the Mossad was received by his counterpart in Bahrain. So we do believe that security cooperation, intelligence cooperation is part of our ongoing partnership between Bahrain and Israel,” Abdullah said.

The meeting in Munich followed two historical visits made by Israeli Prime Minister Naftali Bennett and Defence Minister Benny Gantz within 10 days to Bahrain and Abdullah’s words make it clear that Bahrain would exert utmost effort into any political or diplomatic initiative and co-operation that could lead to saving the lives of innocent civilians.

The Abraham Accords that marked a transitional point in the Middle East’s history and future and consolidated strategic cooperation between two countries that believe in peace as a consistent approach to confronting destructive ideas and ideologies that perpetuate hatred and promote terrorism — this has been the main focus of discussion and cooperation between the two states.

Both suffer from threats by terrorist entities and countries harbouring terrorists. Iran has been the focal point of all threats, directly and indirectly.

The participation of Anwar Mohammad Gargash, diplomatic adviser to His Highness the president of the United Arab Emirates, in the Munich Security Conference also gave weight to the discussions as the UAE continues — through genuine diplomatic efforts — to achieve stability and security in the region; the UAE has always been known for such efforts and stands as a great example for resolving several regional and international issues through its diplomatic effort, experience and in-depth analysis of the different players in the region.

History books will document the Abraham Accords that brought the UAE, Bahrain and Israel together, thanks to the brave decisions taken by their leaders in a part of the world where the some countries countries funding terrorism have created a turbulent region.

Munich brought together diplomatic and defense leaders who addressed a number of challenges facing the region, foremost among them terrorism based on extremist ideology, and the rejection of coexistence and diversity, which represents another challenge as it is linked to the spread of sectarianism and negative ideas. Antisemitism and Islamophobia have been the unfortunate results of hatred and demonizing Israel in many parts of the Muslim world.

Sheikh Abdullah al Khalifa focused on the challenge of armed proxy militias and the threat to maritime security, in addition to targeting oil and vital facilities in the countries of the region through drones and guided missiles to destabilize the region. This comes at a time that the Houthis, funded by Iran, continue to target Saudi Arabia and Abu Dhabi, causing the death of innocent civilians. Munich came during the same week that Australia classified Hamas as a terrorist entity, months after the U.K. had done so, and after Germany classified the political wing of Hezbollah as terrorists.

The Munich conference has come to a close but the mission to eliminate the enemies of peace has just begun.

When Rafael Schwartz moved to Kuwait three years ago for work, he was hoping he’d be able to make quick trips to the fledgling Jewish community in the nearby United Arab Emirates every few weeks if he needed Jewish company or kosher food. But when COVID-19 struck two years ago, he found himself unable to travel.

“My intention was to leave once a month and go to Dubai, where there was a small Jewish community, but the pandemic changed all that and I never left Kuwait,” Schwartz, who is originally from the U.K., recently told The Circuit over Zoom.

Once the virus hit, traveling in and out of Kuwait, which sits at the tip of the Persian Gulf, bordering Iraq and Saudi Arabia, became difficult — and sometimes impossible, when the country closed its borders — and Schwartz soon found himself trying to keep up with his Jewish traditions in a country that does not officially recognize Israel and is known for its institutionalized, often pervasive, antisemitism. An engineer by trade, Schwartz told JI that while he has lived and worked in multiple countries with small or nonexistent Jewish residents, he still found himself yearning for Jewish community.

Then, in February 2021, something like a miracle happened. Spurred by the fall 2020 signing of the Abraham Accords, a set of normalization agreements between Israel and four Muslim-majority countries, the Association of Gulf Jewish Communities (AGJC) was born, connecting Jews in six Persian Gulf countries and providing a Jewish lifeline for people like Schwartz.

In that short time, the AGJC has become the backbone of Jewish life in the Gulf, primarily in the UAE and Bahrain — two of the signatories to the Abraham Accords — and has connected the sprinkling of Jews living and working in Kuwait, Oman, Qatar and Saudi Arabia.

The association estimates there are roughly 1,200 Jews residing in the Gulf, not including a further 1,000 serving there as part of the U.S. military. Among its activities, the organization has played a hand in the growing number of Jewish life-cycle events, helping to organize the region’s first bar mitzvah in 16 years and its first Jewish wedding in 52 years. It has also launched a Jewish dating website, a Beth Din of Arabia (Jewish religious court), and is currently in the process of creating an Arabian Kosher Certification Agency, which will set standards for kashrut throughout all six Gulf countries. The AGJC also offers weekly in-person and virtual programming, including a Friday pre-Shabbat Zoom and events around the holidays.

“There was a big Pesach turnout,” said Schwartz, who logged into the Zoom event from Kuwait. “One of the people who also joined was a Jewish lady from Kuwait City who has lived here for 40 years. She was curious about where to find matzah and the rabbi connected us so that we could meet.”

For indigenous Gulf Jews, such as Ebrahim Daoud Nonoo, AGJC’s president and the chairman of the board of trustees of the House of Ten Commandments, the Jewish community in Bahrain, the growing Jewish life is a welcome change.

“It is lovely,” Nonoo, whose family has lived in Manama, Bahrain’s capital, for more than 100 years, told JI. “The community is a very ancient one but until now we had to send our kids abroad to study, and the problem with that is that they don’t come back. So now we have a community that is growing older and older and there are no children.”

“We are a tiny community and the good thing we are seeing now is that we have a workable way to make Jewish life flourish in the country,” he continued. “The AGJC is a fantastic support for all the communities in the Gulf, allowing us to enjoy Jewish life not just from the point of view of kosher food or religious books, but we also have the input of a rabbi and we have used him for bar mitzvahs and weddings.”

Nonoo, who served as a member of Bahrain’s Shura Council (Upper House of Parliament) from 2001 to 2006, added, “We are in a much better place than before because we no longer need to go to Europe or the United States to find Jewish support, we can now get it from Dubai or we have it here in Bahrain.”

The more the Jewish community grows, said Nonoo, it will attract Jews from all over the world to live and work comfortably in the Gulf. And, he added, the presence of a Jewish community in countries where they were absent or invisible for so many decades is essential for outreach to local Muslim populations.

“It is really sad to see a Jewish community die, and we are bringing them back to life,” he said, adding that the synagogue often invites local Muslims to participate in services and events to learn about Judaism.

“When I arrived here a year ago, Jewish life in the Gulf was almost unknown,” Rabbi Dr. Elie Abadie, the AGJC’s rabbi, said in an interview with JI. “It was barren land, but I could see that we could create an orchard and connect Jewish communities and individuals in all of the countries.”

Abadie, who was born in Lebanon and speaks fluent Arabic, said that the UAE and Bahrain are now “fully open” and embracing their Jewish communities, and he is hopeful that “Saudi Arabia will follow suit sooner rather than later, then Oman, Qatar, Kuwait — which will probably be the last the one to open, although there are some rumblings that people want to open up to Jews and Israel.”

Abadie said that the AGJC had connected with individual American Jewish soldiers stationed in Kuwait who have lived there for decades and are married to locals, as well as a few descendants of Jews who now live as Muslims.

“It feels really good watching this and, in a way, it makes you feel vindicated that finally Arab countries have come to realize that either persecuting or expelling their Jews was a historical mistake and now they want to correct that and welcome the Jews back,” he said. “I hope and pray that we will see even more events for the Jewish community in these countries and that more Jews will either go to settle there or come out of the closet, so to speak.”

Not far from Ben Gurion Airport, in a spacious and airy hangar, sits Israel’s latest collection of highly sophisticated Unmanned Aerial Vehicles (UAVs). Large and small, short distance and longer range — even the first Israeli drone, circa 1980, strung from the ceiling — the space has everything one might expect to inspire, create and develop these innovative flying machines. However, among the workstations, spare parts and a plethora of highly trained engineers, there’s one thing conspicuously missing: women.

The space is part of a sprawling campus belonging to Israel Aerospace Industries (IAI), a state-owned company that develops all manner of civilian and military aerial systems it sells to more than 100 countries. It is a leader in the field both in Israel and around the world, however, among its 15,000 engineers only around a third are female.

The shortage of female engineers at IAI mirrors Israel’s broader technology and innovation sector today where women make up roughly a third of employees. And IAI is among the leaders in the industry looking for ways to address this gender imbalance.

“We want to raise the percentage of women in the engineering positions in the high-tech world in the future, not only for the IAI but for all of Israel,” Gili May, IAI’s chief relationship officer, who is responsible for the company’s social responsibility outreach, told Jewish Insider. “I think IAI has an obligation to fight for the right of women to take their place in the field of engineering. Of course, we hope that those graduating from our program will come back to us in the future, but that does not really matter as long as some of the girls from this program end up becoming engineers.”

The company’s Engineers of the Future program, launched six years ago, offers 100 teenage girls each year the chance to take a peek inside the industry, showing them the kind of jobs available and even connecting them with female mentors already working in the field who can guide them through their hectic adolescent years.

“I was always interested in science, and I always wanted to head in that direction but doing this program really helped to develop my dreams, it showed me what was possible and what I might be able to accomplish,” Eliya Harari, who participated in the program in 2017, told JI.

Now 21, Harari is completing a degree in computer science at Bar-Ilan University. She said that while she was interested in computers in high school, she did not receive too much encouragement or support from her family, her teachers or her peers.

“When you are young, there are so many things that you want to do and it is distracting,” Harari said. “But when I joined the [IAI] program, I met other girls who were like me, and that really made it fun and gave me some support.”

A recent study by Power in Diversity, a joint venture of more than 60 Israeli venture capital firms and more than 170 Israeli startups aimed at promoting diversity and inclusion, found that women account for only 33% of all industry employees. Dror Bin, CEO of Israel’s Innovation Authority, told JI in an interview last month that boosting the number of women in the sector was one of the authority’s main priorities, also in part to address an overall shortage of manpower in the country’s high-tech sphere.

“The manpower shortage in Israel’s high-tech [sector] is chronic,” said Maty Zwaig, CEO of Scale-Up Velocity, a branch of Start-Up Nation Central, which seeks to advance Israel’s high-tech industry and provide solutions to its human capital challenges.

Zwaig said that along the traditional route to careers in Israeli high-tech there were many points where young women could and should be encouraged and engaged much more, which would ultimately increase their participation in the industry.

“The pipeline to the high-tech industry in Israel begins with STEM, then there is the army and then university,” she described, using the acronym for the curriculum focused on science, technology, engineering and math. “We have a clear understanding of points where things go wrong, where we lose girls in the system.”

According to the Council for Higher Education in Israel, while the number of students overall studying STEM has increased over the past decade, still only 29% of students in subjects such as computer sciences, electrical engineering and electronics are female, Haaretz reported last month. The report highlighted that the gender gap begins in junior high school, where boys make up most of the students taking such subjects and continues on through the “pipeline” that Zwaig describes.

The number of girls or young women involved in science and technology dwindles even further when Israelis reach the army, said Zwaig, a former lieutenant colonel in the IDF, where she headed R&D units in the Intelligence Corps, citing her organization’s own research. 

Only around 27% of army programmers are women and only 17% of cyber units are female, she said, adding that by the time many young women reach university, degrees focused on technological or science – subjects that almost guarantee a future in engineering or some aspect of high-tech and innovation – feel out of reach.

At IAI, which has been working to advance female engineers in its own ranks, the four-month training program for junior high school girls not only promotes STEM, it also works to develop bonds with those already working in the field.

Dikla Avraham, one of the few female engineers at IAI and a mentor for the program (not Harari’s mentor), said that such outreach was important in introducing “young women to the world of engineering and science,” which they might be reluctant to join because it such a male-dominated industry.

The program, she said, gave young women confidence and the mentoring showed that it is possible to also become wives and mothers, even while working in a highly competitive and very demanding industry.

May, who is also IAI’s spokesman, said that encouraging teenage girls to stick with scientific subjects throughout high school, the army and into university when there were so many life distractions came down to is “branding.”

“Of course, you need the basic capabilities in order to succeed in one of these subjects, but you don’t have to be a rocket scientist in order to matriculate in physics,” he pointed out. “We want to emphasize that studying these subjects is cool and that being an engineer is cool too.”

Scale-Up Velocity’s Zwaig is hopeful too, saying that even beyond the traditional life path laid out for Israelis, “it is never too late for women to go back and learn these topics” and find employment in the high-tech field.

Among the programs run by Scale-Up Velocity, is a retraining course for ultra-Orthodox women who are the main breadwinners in their community and are becoming increasingly present in Israel’s high-tech hub.

“If women want to do something that pays more, then they can find a way in,” Zwaig concluded. “The main problem is that women, at a certain stage, tell themselves this field is not for them, but there are so many positions they can do, it’s just a matter of self-perception.”

Israeli President Isaac Herzog is set to make the country’s first ever presidential visit to the United Arab Emirates on Sunday, his office announced on Tuesday.

The president, together with First Lady Michal Herzog, will visit Abu Dhabi and Dubai at the invitation of UAE Crown Prince Sheikh Mohammed bin Zayed Al Nahyan, with whom he will meet in addition to Minister of Foreign Affairs and International Cooperation Sheikh Abdullah bin Zayed; Vice President, Prime Minister, Defense Minister and ruler of Dubai Sheikh Mohammed bin Rashid Al Maktoum; and representatives of the Jewish community.

During the two-day trip, Herzog will also open Israel’s national day celebrations at Dubai Expo 2020 on Monday, which will include an official ceremony at the Al Wasl Dome, located at the heart of the Expo, and a public event at the Israeli pavilion. 

“We have the privilege of making history by making the first visit of an Israeli president to the United Arab Emirates,” Herzog said on Tuesday. “This important visit comes as the Israeli and Emirati nations are busy laying the foundations of a new shared future.” 

“I believe that our bold new partnership will transform the Middle East and inspire the whole region,” he added. “We are a peace-loving nation, and together we will expand the historic circle of peace of the Abraham Accords and create a better, more tolerant, and safer world for our children. I thank Sheikh Mohammed bin Zayed Al Nahyan for this gracious invitation to deepen our nations’ bonds of friendship.”

Last month, Israeli Prime Minister Naftali Bennett made the first official visit of an Israeli premier to the Gulf nation.

The historic visits of both leaders come over a year after the UAE established formal diplomatic ties with Israel. Bahrain, Sudan and Morocco all formalized ties with Israel in 2020.

Egyptian officials, American scholars and foreign diplomats gathered on Monday at a luxury hotel on the banks of the Nile to commemorate International Holocaust Remembrance Day, the first time such an event has ever been held in Egypt. 

The gathering was hosted by the U.S. Embassy in Egypt and the U.S. Holocaust Memorial Museum (USHMM) in Washington, D.C. A similar event will take place later this week in Abu Dhabi, where Noura al Kaabi, the United Arab Emirates’ culture minister, is slated to speak. (International Holocaust Remembrance Day is commemorated on Jan. 27, the day the Auschwitz concentration camp was liberated.) Plans for additional events in Riyadh and Dubai were scrapped because of the COVID-19 pandemic. 

“It was symbolically, I think, very important that we were able to do this in Egypt,” Robert Satloff, executive director of The Washington Institute for Near East Policy and a speaker at the event, told Jewish Insider from Cairo. “I was just delighted with what happened today and the fact that this occurred in the largest, most populous, trendsetting Arab state.”

The event is the latest symbol of changing attitudes in the Middle East in the wake of the Abraham Accords signed in September 2020. While Egypt was the first Arab nation to sign a peace treaty with Israel, in 1978, the Camp David Accords did not lead to a significant shift in Egyptian attitudes toward Israelis and Jews. 

“There is a peace treaty between Egypt and Israel, but that peace has always been a cold peace,” said Mina Abdelmalak, who conducts Arabic outreach for the USHMM and was born and raised in Egypt. “It was never translated into the mainstream, people-to-people level. It was mostly government-to-government. So to be able to push this a little bit, that is significant.”

Abdelmalak and Tad Stahnke, the museum’s international outreach director, spoke at the event, as did Jonathan R. Cohen, the U.S. ambassador to Egypt, and Magda Haroun, the head of Egypt’s Jewish community. Satloff took questions from the audience following a screening of “Among the Righteous,” a documentary he produced about Arabs who helped protect and save Jews during the Holocaust. 

“If you would have told me a few years ago that such an event would take place in Cairo, I would laugh,” Abdelmalak told JI on Monday. “Until this morning, it wouldn’t have completely surprised me if the government of Egypt would say, ‘Due to security reasons, this is not going to happen.’” 

Some four dozen people attended the invitation-only event, including human rights activists, business people and former members of Egypt’s parliament. 

“This wasn’t hidden away in some obscure corner of some small, out-of-the-way building. This was right smack in the middle of Cairo. This was an event to which diplomats from around the world — Middle East diplomats, European diplomats and ambassadors — were there,” explained Satloff. 

From left: Mina Abdelmalak, Tad Stahnke, and Rob Satloff (U.S. Holocaust Memorial Museum)

The Abraham Accords “raised the bar for everyone,” Satloff said, including the “first-generation peacemakers” — Egypt and Jordan. But there were other factors at play, too: Egypt, like Israel, sees Iran as a foe. Last week, Egypt’s permanent representative to the United Nations gave a speech in Arabic on behalf of the Arab Group, condemning Holocaust denial as the United Nations General Assembly debated and then passed a resolution on the subject. The only country to vote against the resolution was Iran.

Satloff attributed the attitude change at least in part to Israel’s new leadership. With the “post-[Benjamin] Netanyahu enhancement of bilateral relations, it’s easier to be more public about it,” added Satloff. Domestically in Egypt, there is also “more consideration of the issues of religious minorities, countering extremism, interfaith relations. I think all these come together to make the environment more receptive and accessible to the type of event that we had today.”

The public event marked an important milestone for the USHMM, but came only after the USHMM’s efforts to build relationships in Arabic-speaking countries over many years. 

“We have for the past several years been working to cultivate partnerships across the Middle East and North Africa to develop educational programming to reach young adults and emerging leaders in those countries with accurate and relevant information about the Holocaust,” said Stahnke. Education efforts have begun to have an effect in Morocco and Tunisia, he added. But yesterday’s event in Egypt, the most populous Arab country with nearly 100 million people, marked the most visible success. 

Outright Holocaust denial is rarer than it used to be, Satloff said, explaining that it has been replaced by “relativism.” He defined the concept as “the idea that bad stuff happened, but bad stuff happens all the time, that sort of thing. Or: 600, 60,000, 600,000, 6 million, what’s the difference?”

Holocaust distortion has found a home in Egypt in the past because of the overall sentiment in the country regarding the Israeli-Palestinian conflict. Abdelmalak said the result is that “the Holocaust has been weaponized” in Egypt. 

“It takes a lot of work with civil society to ensure that we push back against years and years of Holocaust denial being established in that part of the world,” Abdelmalak added. Attendees at the event also reflected upon Egypt’s own treatment of its Jewish community, including in the 1940s, when some Arab leaders spread Nazi propaganda and pogroms racked Cairo. 

“I think everybody left with the sense that it was worthwhile and valuable,” said Satloff, “and perhaps just the first of many, which itself is a very important milestone.”

Less than a month after presenting his credentials to King Hamad bin Isa Al Khalifa, Israel’s ambassador to Bahrain, Eitan Na’eh, is still marveling at his new position. The longtime Israeli diplomat, who was famously expelled from Turkey in 2018, some days cannot believe that he represents his country in an Arab kingdom that less than two years ago had no formal ties with Israel.

“I sit here in Manama and look outside to a beautiful view of the [Persian] Gulf, and I am still pinching myself,” Na’eh told Jewish Insider in a recent interview. “I feel lucky to work in these countries.”

Na’eh arrived in Manama, Bahrain’s capital, last November, vacating his post in Abu Dhabi, where he spent nine months serving as the first diplomat to represent Israel in the United Arab Emirates. Israel signed normalization agreements with the UAE and Bahrain in September 2020, with Morocco and Sudan joining what is now known as the Abraham Accords a few months later.

“From the first day I landed here, I found myself sitting in homes and living rooms with people from all over the region – Iraqis, Saudis, Kuwaitis, Lebanese and Palestinians – and they all told me, ‘Enough, let’s put our political disagreements aside and do business; that in its place will calm things down,’” Na’eh told JI over Zoom from Manama.  

While Na’eh is focused on developing economic and trade ties between the two countries, he is also well aware of the kingdom’s regional and geographic value as a country that sits in the Persian Gulf just off the coast of Saudi Arabia.

“We are looking at Bahrain as a gateway to the region, to the East, and from the East to Israel,” he said.

Aside from the lucrative financial opportunities, including in tourism — Na’eh said direct flights from Tel Aviv to Manama will begin in a few months once the Omicron strain of COVID-19 subsides — Israel is long believed to have its sights set on drawing Saudi Arabia, the most powerful country in the region, into a closer alliance.  

“What I’ve learned since coming here is that Bahrain and Saudi enjoy a very close and amicable relationship, and I hope we will find an opportunity to cooperate with them,” Na’eh said. “Israel is obviously open to such cooperation — economic, financial, trade and investment.”

“Coming now from the first two countries – the UAE and Bahrain – that signed the Abraham Accords,” he added, “I would say that the idea is to build a model, a model of coexistence and a model of cooperation, where other countries in the region will begin to say, ‘Why not us?’”

Na’eh told JI that he hears more and more people in the region asking when such relations will be formed between their countries and Israel. It is “bound to happen” eventually, he said of Saudi Arabia.

“The Gulf countries, certainly Bahrain, the UAE and Saudi Arabia, are very advanced and I think together with Israel, we can do wonders,” Na’eh stated, adding that it was important not to ignore the Arab states who first signed peace deals with Israel: Egypt and Jordan.

“There is a real curiosity here about Israel, about the religion, the culture, the food, the holy sites, and the people,” he said of Bahrain, though he cautioned that there remained some contentious issues, such as the ongoing Israeli-Palestinian conflict.

“We don’t expect countries to simply become all lovey-dovey in a day,” said Na’eh, adding, however, that the Abraham Accords had “reversed a trend.” 

“In contrast to the past, when countries raced to show who boycotts more, who incites more, or who shows more animosity towards Israel, there are now countries in the region that are racing to invite Israeli companies to work there,” he said.

In terms of the economic opportunities between Israel and Bahrain, Na’eh observes that the scale of economic cooperation is quite different to the UAE. According to figures compiled by the Abraham Accords Peace Institute, trade between Israel and Bahrain stands at around $6.5 million, compared to $1.15 billion between Israel and the UAE.

However, he noted, the desire in Bahrain to build upon and strengthen growing cooperation with Israel is equally vibrant as in the UAE.

“I have found a real will among people here to live in peace and coexistence,” Na’eh noted.  “There is an indigenous Jewish community here that has lived here for many years, and the only synagogue in the Gulf was in Bahrain.”Na’eh said he is working with counterparts in the Gulf state to create more avenues of cooperation. “I think that there is plenty in the economic sphere and of course, in people-to-people relations, politics and security,” he said. “It is time to move on and time to explore, and the best way forward to live together is to trade together. That’s what the Abraham Accords is all about.”

There aren’t too many people who would characterize 2021 as a “bumper” year for their field, but that is exactly the word that Dror Bin, CEO of the Israel Innovation Authority, uses to describe the country’s high-tech sector during the second year of a global pandemic that brought additional lockdowns, border closures and successive waves of virus variants.

“I don’t think anyone would have expected Israeli high-tech to peak in such a way,” Bin, who was appointed CEO of the authority a year ago, told The Circuit in a recent interview. “It was possibly the best year ever for Israeli high-tech.”

Bin’s decisive statement is backed up by staggering data collected by the authority, an independent public entity that works to bolster Israel’s innovation ecosystem and serves as a bridge to the government.

During 2021, Israeli companies raised more than $22 billion in capital; exits, mergers and acquisitions, and initial public offerings totaled $80 billion; the accumulated market capital of Israeli companies trading on Wall Street was $300 billion; and there was a record 79 unicorns, companies valued at $1 billion and up.

In addition, the IIA noted that Israel’s high-tech sector now accounts for some 50% of Israel’s total exports and for 15% of the country’s GDP. Ten percent of Israelis work in high-tech, paying some 25% of the country’s total income tax. National expenditure on civilian R&D stands at 4.9% of GDP, second only to Korea and ahead of the Organisation for Economic Co-operation and Development average of 2.47%. It also places third, after the U.S. and China, in the number of companies (116) listed on NASDAQ.

The normalization agreements between Israel and four Arab states in 2020 has also boosted the sector. The newly established UAE-Israel Business Council, which has united more than 6,000 Emirati and Israel businesspeople, is predicting that bilateral trade could reach $2 billion in 2022, an increase of over 50% from 2021 and many of the newly formed ties are in the tech sector.

“I’ve been working in Israeli high-tech for 25 years and two decades ago would never have dreamt that we would reach where we are today,” said Bin, former president and CEO of RAD Communications, a Tel Aviv-based company that manufactures networking equipment.

The COVID-19 pandemic, which forced many businesses and services into the virtual space, actually “stimulated the demand for high-tech,” Bin explained, adding that Israeli companies were quick to adapt to the new environment and the government stepped in to keep investment flowing into the startup sphere.

“There was a digital transformation, and many things that once took place in the physical world had to move to the virtual world, which increased demand,” he told JI. “The Israeli DNA has the ability to be flexible and to adapt quickly to changing circumstances, also there is a long history of entrepreneurs, investors and government policies that benefit the sector.”

“When [COVID] started, the market went into shock; many investors were reluctant to invest because the uncertainty was high,” Bin explained. “We got money from the government and, for a short while, invested in different types of startups until investors were ready to return — this was one of the main reasons we did not see a fall in the number of startups in the country.”

Established in 2016, the Israel Innovation Authority has three main functions — investing in research and development of innovative and ground-breaking products with an annual investment budget of NIS 2 billion ($640,000); preparing for future technology trends; and enabling regulation, including removing obstacles and finding ways to expand human capital for the high-tech sector.

After the “bumper” year, Bin said he expects the industry to keep growing and expanding, with an emphasis on maintaining Israel’s high-tech inside the country, in contrast to the past, and diversifying into new areas of innovation.

“There has been a paradigm shift that will change many things going forward,” he said. “Traditionally, Israel’s start-up ecosystem was based on the establishment of small companies whose goal was to find a multinational or American company to buy it out.”

Now, Bin said, there are around 10-15 companies that have become giants in their space and are choosing to remain in Israel. He estimates that a further 100 Israeli companies have the potential to become leaders in one of the global markets.

Bin also said that Israel’s high-tech market was beginning to branch out in new directions.

“If Israel was strong in cyber and fintech or the enterprise software market in the past, we have seen a shift into new markets like food-tech, specifically alternative proteins, agritech, and Bio-Convergence (developing new medicine and medical devices),” he said. “The imagination can keep on working here full-time to find many more exciting new things.”

In order to further facilitate the growth, IIA has been working to ease Israeli bureaucracy, loosening regulations in order to allow Israeli companies to flourish. Bin gives the example of the drone market, a focus in recent years for the authority. Bringing together Israeli regulators, the Israeli Aviation Authority and industry innovators, he said, was already “defining the playground so that all parties could benefit from it.”

He also said IIA has invested in one of Israeli high-tech’s biggest challenges — the shortage of manpower. “We intervened in this about two years ago and started implementing new models of recruiting manpower to enter the industry,” said Bin, describing a program for re-training for those with academic qualifications and another to bring in underrepresented populations such as women (who make up roughly 30% of the sector’s employees), Arabs and the ultra-Orthodox.

Bin said there was no single element to Israel’s success in creating a booming global innovation hub. “What you need to create this magic is for it all to happen in the right place at the right time,” he told JI.

Citing a combination of Israel’s risk-taking culture, the country’s necessity to develop defense systems and a very smart government policy, Bin added: “There is also the fact that Israel is so small, and being small is an advantage when it comes to innovation, which often evolves in dense places where everyone knows everyone,” he said. “All these things have blended together well to create wave after wave of innovation.”

“No matter how you want to look at the Israeli ecosystem, whether its capital raised, quality of capital, unicorns, IPOs, whatever metric you want to look at, the Israeli tech ecosystem grew exponentially in 2021, it was our best year yet by far,” concurred Hillel Fuld a tech columnist and startup advisor.

Explaining the growth, Fuld referred to last week’s Torah portion, where it talks about the Jews in Egypt and how the more they were oppressed, the more they multiplied.

“We have this tendency as Jews to thrive under pressure,” he said. “There is an inverse correlation between terror and innovation, meaning you would think that if there is more terror there would be less innovation but that is not the case at all, so in 2021, the year of a pandemic, you would think it would be slow or there would be a decrease in innovation but in reality, that was not the case.”

“To say I was surprised, I was not surprised because all indications showed that we were going to keep growing but the rate of growth did surprise me because it was just so explosive this year,” said Fuld.

Video game company Take-Two Interactive has reached a $12.7 billion deal to acquire rival company Zynga, catapulting the “Grand Theft Auto” creator into one of the industry’s most formidable game publishers.

The deal, one of the largest in video game history, was announced on Monday by Take-Two CEO Strauss Zelnick and Zynga CEO Frank Gibeau. Expected to be finalized later this year, the merger will unite Take-Two, which specializes in PC and console gaming, with Zynga, a free-to-play mobile-game behemoth.

The two executives, which described the purchase as a “hand-in-glove fit” in a Monday morning conference call, anticipate the merger will result in an annual cost savings of $100 million and an additional $500 million from improved collaboration between the two firms.

Under the terms of the deal, Take-Two will buy all outstanding shares of Zynga’s stock for $9.86 a share, a 64% premium on the company’s share price as of Friday afternoon. The acquisition will be paid in both cash and Take-Two’s stock, granting Zynga’s shareholders one-third ownership of Take-Two.

Zynga was founded by Mark Pincus in 2007 when it piloted an online poker game played on Facebook. Since then, Zynga has grown into a large company with $2.3 billion in sales in FY2020. 

In a Medium post discussing the deal, Pincus described the “bittersweet moment” and thanked his colleagues over the years for his business’s success. “We’re seeing games expand in every direction from hyper casual to entire persistent worlds,” wrote Pincus. “I believe the company will have the franchises and scale to lead in every category.”

The different specializations of the two firms will complement each other as they now work together. Take-Two, which boasts hits including “Grand Theft Auto,” “NBA2K” and “Borderlands” produces games designed for PCs and consoles, but does not have free mobile versions. Zynga’s business model, which offers free mobile entertainment with in-app premium purchase options, has pioneered successes including “FarmVille” and “Words With Friends.”

With mobile gaming ascendant, Take-Two will benefit from Zynga’s mobile development team, which is expected to develop mobile options for Take-Two’s offerings. Under the planned acquisition, more than half of Take-Two’s projected bookings in Fiscal Year 2023 will come from mobile, diversifying Take-Two’s offerings and making it competitive with other developers as mobile gaming gains traction.

Zelnick called rolling out mobile options for Take-Two games a “high-priority initiative,” saying, “We see tremendous untapped potential to bring Take-Two’s renowned console and PC properties to mobile.”

Take-Two will also benefit from Zynga’s in-house advertising team, removing the added costs of outsourcing advertising operations.

The deal comes after the gaming industry enjoyed a boom during the pandemic, as social distancing interventions and lockdown restrictions pushed consumers to spend more time gaming, a trend that translated to large share price increases for both Take-Two and Zynga over the past two years. Yet Zynga’s stock tumbled last summer amidst societal reopening following COVID-19 shutdowns and after Apple instituted privacy reforms restricting how advertisers can track consumers on its devices, which made gaming less profitable.

Zynga has consistently maintained that its stock downturn from reopenings and Apple’s new privacy policy are transitory, and has remained optimistic about a stock rebound. On the Monday call, Zynga’s Gibeau said that these factors will not contribute to long-term drags on gaming, and explained that Zynga accepted a deal despite a feeling that its stock is undervalued because of the growth opportunities afforded in the new partnership.

“We saw incredible strengths available to us with regards to scale, data, audience expansion into new categories and product capabilities that would help us aggressively pursue cross platform. So from our perspective, we would be able to grow faster together. And the deal that was constructed in the framework with a 64% premium really put us into a position where we felt that this was the right course of action for our shareholders,” explained Gibeau.

The mammoth merger was evaluated by a strategic committee of independent directors from Zynga’s board and decided with unanimous approval from Zynga’s board of directors. Combined, the two companies reach over one billion users and employ 8,000 developers.

Zelnick will continue serving as Take-Two’s CEO, with the rest of Take-Two’s management remaining intact, while Zynga’s leadership team will assume responsibility for Take-Two’s mobile operations. Take-Two will also expand its board to accept two new directors from Zynga’s board.