Along with my partners, I have operated an international business development consulting firm here for 33 years. Our client base has primarily been composed of certain US states for whom, from our base in Jerusalem, we operate as official regional trade and investment representatives in the Middle East, While our major area of activity is helping US exporters identify potential importers, distributors, and agents here in Israel and the region, we also work with Israeli companies who may be thinking of opening facilities in the United States as their businesses expand in that market.
Over the last 33 years, we have assisted dozens of companies in setting up distribution or production facilities abroad, while continuing to grow their operations in Israel. Never had we had discussions with Israeli companies about their intention to close their local operations, move to the US, and reopen their businesses there, until these past three months. For me, this rings very loud alarm bells.
Clearly the ongoing war here, the fact that qualified people have been away from the workforce on military reserve duty for 250 days or more, and the uncertain future that we face, have all been contributing factors. However, the deciding issue in all the cases we have dealt with recently has been the reluctance of foreign investors to invest money in these Israeli companies right now, given the unclear future the country faces.
Expat communities abroad
We knew, of course, that there were significant Israeli expat communities developing in Cyprus, Athens, Rome, and Lisbon, to name a few. We also knew that the community in Cyprus had become large enough that a Jewish school was being built to service those now living there with their families. And we were aware that some people here were buying second homes in Europe “just in case.” (Who could have imagined that less than 80 years after the Holocaust, Jews would look to Europe – then the “oven” of European Jewry – as a place of refuge.)
But this week, when the third company told me it was planning to close up shop, move to the US, and open their business there while maintaining an R&D staff, not here, but in Cyprus... the sirens went off big time. Allowing this to continue will potentially cause irreparable damage to what has been built here over these last 76 years.
WHO ARE the people who are leaving? Exactly the ones we don’t want to leave. They are the people who can afford to make the move financially. They are the people who have been elemental to the successful development of the Start-Up Nation. They are the ones who were at the forefront of bringing this country to the level of economic success that became the envy of the world. They are the people we cannot afford to lose.
Some may suggest we look at how many people are considering moving to Israel. Apartments in major cities today are at a premium and prices are well over NIS 3 million for anything decent – with some going for three or four times that amount. That’s nice. However, those from abroad who can afford to pay those prices are generally older people who have made their money and will not be working as part of Israel’s productive workforce. It is wonderful that with the increase in antisemitism in the West they see Israel as a place of refuge and not Europe. We welcome them “home,” but this aliyah is not a replacement for those who leave.
While those who are leaving are not being replaced with those who will substitute them in productive value of the ones who left; it is an unbalanced equation.
One wonders if there is someone, anyone, at the senior levels of government sufficiently aware of this dynamic to think about addressing it.
Is there anyone at “the top” trying to determine where the tipping point is in this long war in which we are engaged with Hamas?
In other words, when do we get to the point where when the war ends, the damage to Israel physically, economically, and socially will be so great that we will not be able to return to where we were as a country on October 6? And if there are people thinking about it, is there a plan to make sure we don’t go over the precipice into the void below?
Ours is a small company with limited reach but we are certain that what we see is but a microcosm of the magnitude of the overall problem. A government, our government, that is fixated on routing our enemies without parallel concern for the “day after,” whether in Gaza or in Israel, will be judged derelict in its duty to govern for the common good.
Henry Clay, US Secretary of State from 1825-29, once said: “Government is a trust, and the officers of the government are trustees. And both the trust and the trustees are created for the benefit of the people.” Let’s hope that our government takes this charge seriously and examines our current challenges holistically.
The writer has lived in Israel for almost 41 years. He is founder and chair of Atid EDI Ltd., an international business development consultancy, founder and chair of the American State Offices Association, former national president of the Association of Americans and Canadians in Israel (AACI), and a past chairperson of the board of the Pardes Institute of Jewish Studies.