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The Anti-Israel BDS Movement Will Fail

The BDS movement is immoral and ineffective. It’s immoral because if BDS succeeds, it will hurt billions of people globally who use Israeli technology, including in many cases to save lives. It is ineffective because it cannot achieve its goals, given the reach of Israeli tech. BDS has succeeded in hurting Israel’s reputation, but it has so far failed in its core goal, economic damage. 

The BDS movement (Boycott, Divestment and Sanctions movement) is a global attempt to persuade people not to do business with Israel or businesses that do business with Israel. The movement was born at the 2001 World Racism Conference at Durban as an attempt to pressure Israel, despite the ongoing support of Israel’s government and citizens for a two-state solution. 

Boycotts can be effective when buyers have an alternative. The Brookings Institute highlights: “banning Israeli goods would affect consumers in countries that currently import those goods, and it would be too complicated even for activists of the boycott movement themselves. View a video of a BDS rally, and there’s a fair chance the footage was taken on a device that utilizes Israeli technology. The boycott is broken before it begins.” Even some pro-BDS websites have been built on Wix, an Israeli website development company with over 150 million users in 190 countries.

Household names like traffic app Waze (150 million users, acquired by Google for over $1 billion), Shopping.com (acquired by eBay for $634 million), and Viber (over 650 million users) are all Israeli companies. Amazon’s Kindle e-reader (estimated 90 million units sold) was developed in the Herzliya Industrial Zone. Consumer carbonation product SodaStream sells an average of over 3 million soda makers each year. Plarium, one of the top online gaming websites in the world, now has 250 million registered players worldwide. Virtual family tree site MyHeritage has more than 15 million unique visitors a month and is the third most visited genealogy website in the world.

Israel’s economic influence moves far beyond information technology and into healthcare. Teva Pharmaceuticals, the largest generic drugs company in the world, is headquartered in Petah Tikva, a city just east of Tel Aviv. With a portfolio of over 1,000 generic molecules and over 4 million prescriptions filled with Teva medications in the EU and US daily, it is more than likely that Teva has manufactured some of the medicines your family has used.  People with multiple sclerosis rely on Copaxone or Laquinimod; people with Parkinson’s can use Levodopa, which reduces motor disturbances.

However, Adam Reuter, chairman of the Reuter Meydan Investment House, points out that “Israeli exports are almost never sold to the end consumer. In fact, this is the case for about 95% of Israel’s exports, almost all of which are involved in business-to-business (B2B) trade with the large international corporations who are only interested in the best product or service at the most competitive price.” Many Israeli products are part of the current backbone of modern fundamental technologies like anti-virus software, firewalls, satellite navigation, USB flash drives, voicemail, and 4G Chipsets. All these technologies were developed primarily or entirely in Israel. 

Pampers, Victoria’s Secret, and many other leading brands rely on Israeli companies for critical inputs to their products. 40% of Intel’s sales are from chips developed in Israel. Microsoft, Google, and Apple maintain active and large R&D centers in Israel. Taboola reaches 1.4bn unique users per month, 44.5% of the world’s internet population. Jerusalem-based Mobileye is literally driving us into the future: the company is developing collision warning software that is key for driverless cars. Microsoft recently acquired CyberX (ffVC portfolio company), an Israeli startup which developed a platform to protect industrial control, for close to $165 million.

Israel has also adjusted to the new reality of battling COVID-19 with the same gusto its entrepreneurs have used in tackling other problems. Since the pandemic began, over 200 startups have sprung up with solutions ranging from PPE (the effective SonoMasks to guard healthcare workers) to Sight Diagnostics (an AI based device which offers lab quality results of blood samples from the prick of a finger). Israel’s Institute for Biological Research is a leader in the race for a cure.

To the extent that BDS succeeds, it will inevitably take jobs away from Palestinians, whose economy is inextricably intertwined with their neighbor. That’s why prominent Palestinians such as Bassan Eid, Director of the Palestinian Human Rights Monitoring Group, have called for an end to BDS. In the 19 years since the 2001 decision by NGOs to ostracize Israel with BDS, Israel’s per capita GDP has grown from $19,000 to $36,200. The energy focused on BDS might be better spent promoting Palestinian infrastructure, entrepreneurship, and education (especially women’s education).

Politically, BDS can have a short-term negative impact on the tech sector, but in the medium-term Israel’s tech solutions are just too valuable to the world. We have listed a handful of Israeli companies here which collectively are used by roughly 3 billion people. This crude estimate implies that at least 1/3 of the world’s population are users of Israeli technologies.

Regardless of politics, the BDS movement’s activities are immoral today, and destined to fail.

Disclosure: ff Venture Capital, where David Teten was previously a Partner, was an investor in CyberX.

Originally posted in Geektime: Can the BDS movement hinder Israeli Innovation? These two CEOs don’t think so.

I co-wrote this with Yoni Frenkel, CEO of YKC Media.

 

 

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