Expotech2009 Conference Closing Summary

Session I
Impact of Multinational Presence on the Development of the ICT Sector
This session was moderator by Dr. Sabri Saidam, President Advisor for Telecom, IT and Tech Education and featured Dr. Mashhour Abu Dakka, Minister of Telecommunication and IT. The session highlighted a presentation from the multinational company CISCO presented by Mr. Anthony Vonsee, General Manager for Cisco North Africa & the Levant. Other main speakers included Mr. Ibrahim Barham, CEO Safad, Mr. Maher Hamdan, CEO Paltrade and Ms. Gisel Hiscock, New Business Development team for Google Europe, Middle East and Africa.

The Speakers have made it a point that realistically, Palestine being under the Israeli occupation it will hamper the development of the economy. However, attracting multinational companies such as Microsoft and CISCO to invest in Palestine is a business and an economic decision where Palestine’s government and private sector have to develop its business case.

We heard a formula from the distinguished Speakers that the recipe for developing the business case starts internally. A holistic approach towards developing government regulation such as an independent telecommunication regulator, digital signature, catering for venture capital industry as part of the company registration and investment laws, also regulation for free zone culminating in Technoparks projects should drive an enabling and friendly environment as a first measurement for multinationals to consider investing in Palestine. As a first step to globalizing the ICT sector, the government has to invest in developing the infrastructure such as telecommunication, regulations, physical premises, human capital and in promoting innovation as well as entrepreneurship.

Furthermore, the industry has to improve its record on delivering quality services at competitive costing rates across the board such as telecommunication services, outsourcing services, and other information technology and business process outsourcing services. This means that skills capacity for Palestinian human capital is key. A multinational speaker advised that they follow where engineers want to be and for that the educational institution is a supply for quality engineers and developers.

Developing a cluster for technology is not a one person or one organization act. It is a collective effort and a partnership between the private and public sector. The private sector made a breakthrough in developing a direct relationship with the multinationals. Its role now is to leverage this relationship to grow the investment impact of multinational in Palestine where the government role is in complementing an enabling and friendly environment. Perhaps the biggest opportunity is where to position Palestine as a platform for the multinationals for providing various solutions to the Arabic speaking markets where the audience learnt that there is a market for the mobile applications. The modality of engagement is to provide the multinationals with required human talent to support their growing business operations in the emerging markets in the region.

In essence, Palestine needs to internationalize and globalize its information technology market. It has to improve it track on credibility and perception to develop the business case. The speakers made the final point that beyond the business case, there are unique non-economic but rather social factors to Palestine that are just as important why the ICT sector deserves the attention of the multinationals mainly to provide knowledge based job opportunities in the private sector and release the pressure on public employment.

Session II
Competing in Global IT Outsourcing - Palestine’s Advantages & Challenges
The moderator for the session was Mr. Omar Al-Sahili, Business Development Director, DAI and the distinguished speakers included Mr. Ghassan Anabtawi, CEO Reach, Mr. Ihab Jabari, ICT Consultant CARANA, Mr. Murad Tahboub, CEO Asaltech, Mr. Tarek Esleem, Member of the Board of Director PITA and CEO Al-Tariq Systems and Mr. Tareq Maayah, CEO Exalt.

This session has shed lights on the current seed efforts to create an information technology outsourcing industry in Palestine. The session has demonstrated current success stories in existing businesses in the West Bank and Gaza in providing outsourcing services regionally. In comparison to Jordan, Palestine is nowhere close to the Tier 4 of countries targeted for the outsourcing as a destination. Nevertheless, the session highlighted the competitive advantages and value proposition for conducting outsourcing in Palestine as an offshore software development destination, software offshoring, business process outsourcing and call centers operations.

Furthermore, the Speakers believe that the quality of service outweighs cost structures in this business, but a niche market has to be developed. For example, Ireland is generating US$12 billion in annual revenues but their outsourcing cost structures are 7 times higher than those in India. So, the value proposition is not entirely based on cost structures. Speakers agreed that Palestinians have English and Arabic language skills, its geographical location and time zone would make outsourcing to serve the Arab speaking region as well as Europe and the USA feasible proposition. For sure, Palestinians can fit in a western corporate culture to align the outsourcing project with the strategic business interest of the international clients.

The main challenge is whether the outsourcing industry can meet a growing demand from the international business community. Is there really a local capacity of available human capital that are highly skilled in the various structures of this industry to support scaling the outsourcing operations.

All speakers agreed that Palestine does have ongoing and existing commercially viable outsourcing activities (not industry yet). Palestine companies have left positive impression on their international clients including CISCO. Some of the Palestinian companies have found niches in media and hardware design and some companies have established an international image that they’re starting to get new business by references from their loyal clients.
Special announcements by development agencies were presented at the Conference. Mr. Ghassan Al - Jamal, Development Specialist Private Enterprise Office briefed the audience on the USAID strategy to assist the growth of the ICT sector in order to build an e-economy. In the first instance, the USAID has highlighted its interest to have the IT sector interact more with the regional and global markets to create business opportunities. The USAID will also be working closely with the Palestine IT Association of companies (PITA) and the Palestine ICT Incubator (PICTI) towards accomplishing its strategies. This is demonstrated in the organization of participation in regional and international exhibitions as well as in the preparation of business delegations. The USAID will be investing in supporting an ICT policy program in cooperation with the Ministry of Telecommunications and IT, in branding and promoting the sector internationally including the outsourcing capabilities, in conducting market research in viable markets to promote the exports of Palestinian products and solutions. The USAID will be supporting an incubation program with PICTI in an attempt to further promote innovation and technology entrepreneurship. The USAID will be working towards the improvement of the workforce development and in promoting the ICT diffusion program.

Mr. Ziad Jacer from Mercy Corps presented how his organization is Contributing to the transformation and growth of the Palestinian economy through knowledge based interventions in market mapping, capacity building, networking, business creation such as supporting PICTI with the TeamStart program and the apprenticeship program.

The final presentation by a development agency at the Conference was presented by Mr. Laith Kassis the CEO of PITA and PICTI on behalf of the Mohammed bin Rashid Al - Maktoum Foundation. Mr. Kassis announced The Sawaed Programme, which seeks to support and develop the capabilities of talented Arab entrepreneurs by awarding non-refundable grants to regional projects that make a positive contribution to Arab World development. The Sawaed Programme is a new and innovative opportunity for businesses to develop commercially sustainable enterprises, whilst addressing development challenges in the Arab World. The current two challenges are Development of Online Arabic Content and Child Education. The Mohammed bin Rashid Al Maktoum Foundation invited the private sector to develop innovative products and ideas that help in the development of the Arab World through Information and Communication Technology (ICT) by creating and providing access to high quality online Arabic content and ICT resources that support education and learning and which promote Arab culture. The Sawaed Programme offers grants to eligible applicants ranging from AED 100,000 to AED 1,000,000.

Session III
Building a Knowledge-Based Economy
This session was Moderator: Ms. Sarah Beran, Economic Officer US Consulate General and the Speakers included Dr. Yahya Salqan, CEO Jaffa Net, Mr. Ahmad Al-Farra, Member of the Board of Director PITA and CEO PALINVEST, Mr. Bernard O’Sullivan, FNMD Project, DAI, Mr. Mustafa Hasan, CEO Hulul Business Solutions, Mr. Naseem Tuffaha, Regional Director of Microsoft’s Developer and Platform Group for Middle East & Africa

In her opening remarks, Ms. Beran emphasized the US government commitment towards the development of the Palestinian ICT sector and noted President Obama’s commitment in his Cairo speech to education, innovation, and development of the entrepreneurial spirit in this region. She added that US assistance in the Palestinian Territories helps to integrate technology into elementary and higher education, funds feasibility studies for ICT projects, provides technical assistance to fledgling Palestinian companies, and sends businessmen to the US and international trade shows for B2B meetings.
Speakers stressed the importance of high quality education, job opportunities, and the participation of multinational companies to the development of a solid foundation for a knowledge-based economy. Many speakers noted that technology is just a tool - not the goal - of a knowledge-based economy, but that it can assist in producing economic benefits where capital, labor and markets work together. The speakers also agreed that a knowledge-based economy is about solving problems, business, economic and social ones alike by exploiting technologies. In this process of providing solutions there has to be a marriage between talent and technology in a social communicative interaction.

Speakers also suggested formally tapping into the Palestinian Diaspora to help the Palestinian economy connect with what is broadly happening in the global industry. Speakers agreed that both the government and the private sector must play a role in promoting the development of a knowledge-based economy - the government can do so by providing incentives to start-ups and improving education, and the private sector by focusing on encouraging innovation and training young graduates, among other things.

The session also highlighted how Microsoft is helping entrepreneurs in jumpstarting their innovation and other regional programs assisting the development and growth of successful international research and technology cluster as a platform to launch new projects. Furthermore, for the first time last year, there was a Palestinian team participating in the Microsoft ImagineCup program. This program often acts as a launching pad for start-ups and entrepreneurs.

The session highlighted how PITA and PICTI are promoting Technoparks, outsourcing, innovation and technology entrepreneurship with international partners to develop a technology cluster towards supporting knowledge based eco-system.

Session IV
Entrepreneurial Venture Capital
Starting and Growing Your Technology Business through Venture Capital Financing
This session was moderator: Mr. Laith Kassis, CEO Palestine IT Association and Palestine ICT Incubator. The distinguished speakers included Dr. Mohammed Mustafa, Chairman and CEO of the Palestine Investment Fund, Mr. Debu Purkayastha, Principal - Corporate Development, Google, Mr. Samir Hulileh, CEO PADICO, and Mr. Victor Hwang, Co-founder and Managing Director, T2 Venture Capital, Kauffman Fellows Venture Corps.

Dr. Mustafa has taken the opportunity to announce a new equity-based investment vehicle capitalized at US$50Million where the Palestine Investment Fund will be committing US$10Million. Dr. Mustafa also announced that this Fund will be investing in the information technology sector.

The session focused on the role of venture capital financial instruments in growing the information and communications technology industry in Palestine. As we have seen in advanced economies, successful startup companies are the bedrock of economic growth and job creation.

Speakers have shared their experiences in growing new businesses with Seed and Venture Capital as a national strategy for expanding the knowledge of seed and venture investing; promote the visibility of entrepreneurs to investors and of investors to entrepreneurs; create investment capital to fill a gap or grow a sector; and create investment capital to build a seed and venture capital industry. Entrepreneurial growth comes from a complex venture ecosystem that Palestine has to complete its own by establishing a venture capital fund.

The Speakers advised that the best venture capital programs recognize that the challenge of capital formation is not so much about money as it is about the business and social transformational impact on the knowledge - how the business community understands seed and venture capital, what steps are involved, what are the do’s and don’ts, tolerance for failure and what it looks and feels like to build a world-class company. Its value goes beyond a simple dollar figure. Venture capital spurs growth at the critical early stages of growing companies’ development. Moreover, venture capitalists become involved as board members and management advisors, suggesting strategic partnerships, access to markets and helping to refine business strategies.

Developing a venture capital industry is a long term in perspective; nevertheless, the Speakers agreed that venture capital is critical to growing the new businesses that will drive the “new economy.” Speakers also agreed that supporting the venture capital industry would entail finding ways to nurture the culture of entrepreneurs, involve more of the Palestinian Diaspora and develop the capital that feeds them, and to provide for exit strategies on the capital market through merger and acquisitions.

Google has shared it corporate strategies in technologies related to communication platforms and content creation, geo-business and navigation and the telephony areas

Closing Session

Documented by Mr. Laith Kassis, CEO PITA and PICTI