The Chazen Israel trip is off to a packed and fascinating start! In the first two days, we’ve participated in an event with the president of Israel, visited a pharmaceutical plant, solar power startup, energy company, bank, and venture capital firm, met local CBS alumni and admitted students, explored the nightlife, and of course eaten lots of local food.
At our first meeting at Hapoalim Bank, Chairman Yair Seroussi talked with us about the Israeli economy (GDP was 3.3% in 2012, with a budget deficit of 4.2%) and the banking climate. One of the significant challenges facing Israel, in his view, is that young people are highly leveraged and housing is very expensive – in fact, there were demonstrations last year around this issue. In terms of the banking industry, he mentioned that many of the larger banks are leaving some of the regions where they are operating and are focusing on their core markets; Hapoalim’s strategy in response is to try to be the market leader domestically and a niche player internationally, particularly where there are large Jewish diasporas. Ultimately, Seroussi feels that “the challenge of banks in the future is the balance…between the [traditional banking] structure and new technology.”
The next stop to Teva Pharmaceuticals, a 111-year old Israeli company focusing on generics and its flagship drug Copaxone with $20.3Bn in revenues, was a new kind of experience for most of us. Teva has 73 manufacturing sites in 60 countries and is experiencing significant growth globally (it currently produces 6 billion tablets and capsules annually). We had a conversation with one of the managers and then donned white lab coats and booties in order to enter the manufacturing facilities. It was fascinating to watch pills go through the various stages of the manufacturing process and to go into a fully automated warehouse where the packages were being moved around by various types of robots.
Getting an audience with Israeli President Shimon Peres that evening was a particular highlight – and we were lucky that he kept the appointment, given President Obama’s visit to Israel this week! Peres is an impressive speaker and consummate politician (particularly at almost 90 years old). One of his key takeaways was that the greatest challenges facing the country are “tradition on one hand, and innovation on the other” and he stressed the importance for Israel of “studying the unknown future” as opposed to just the past. Overall, I enjoyed the event and was happy to be interviewed about my impressions so far by a local organization that is working to bring more MBAs to experience Israel.
Tomer Goldberg introduces President Shimon Peres (photo credit: Anton Chtcherbakov)
Our second full day was devoted to visits to Pitango, a venture capital firm, Noble Energy, an American firm that recently made some huge natural gas finds off the shore of Israel, and Solar Edge, a late-stage startup that developed a DC power optimizer to make solar panels more efficient and “captures more data per second than the biggest bank in Israel.” Among other things, we learned that there are about 4,850 startups in Israel, and government initiatives help to promote high tech; Pitango co-founder Rami Kalish got his first chance through a government support program for high-tech in which they picked qualified managers and would invest 8M in the venture, provided the company got an additional 12M investment. The meeting with Noble Energy was fascinating as they’ve recently discovered large offshore natural gas reserves and gave us a detailed explanation of how they found and process these resources. It’s a rare for a country to suddenly find these resources in a company that already has a high-tech sector and now needs to integrate this into the economy, and it will be interesting to see if they or their competitors make additional large discoveries.
CEO and Chairman of SolarEdge Guy Sella shares his entrepreneurship story as well as a technical explanation of solar panels
Trip organizers Guy and Tomer credit our ability to obtain these meetings and experiences to the power of their Columbia Business School as well as their military networks. Military service is compulsory in Israel, and our speakers have frequently cited this as a formative experience for them personally and something that has made Israelis in general more informal with each other, willing to pitch ideas, and open to taking risks.
We’re now in Jerusalem for a tour of the city’s historical sites, which has been a profound and fascinating experience for much of the group. More to come in a couple of days!
Krista Sande-Kerback ’14