Ing Business in Israel Entrepreneurship and Innovation: the Israeli Model Spring 2016

Doing Business in Israel Entrepreneurship and Innovation: The Israeli model Spring 2016

Doing Business in Israel Entrepreneurship and Innovation: The Israeli model Spring 2016 Academic director Udi Aharoni Tel: 00972-3-6407314 e-mail: [email protected] Course coordinator Idit Admon Tel: 00972-54-2222636 e-mail: [email protected] Hila Rachmani Tel: 00972-50-2230961 e-mail : [email protected] Teaching Assistant Shimrit Samuel e-mail: [email protected] Dates Wednesday, May 18th - Thursday, May 26th, 2016  Program structure: The program consists classes and workshops, company visits, a tour of Tel Aviv -Jaffa, and Jerusalem.  Credits: 3 credit units  Language of instruction: English Background The dramatic shift to an innovative and entrepreneurial high-tech orientation that the Israeli economy has undergone in recent decades has not only been acknowledged globally. It has also contributed to the prosperity of associated areas such as agriculture, pharmaceuticals and the ecology. Many factors can be said to have led to Israel's high-tech success, some of which have to do with the hostility of the external environment, the lack of natural resources, and the so-called collective Israeli personality – ingenious, tough and adaptive. Be that as it may, entrepreneurship and innovation have come to be regarded as integral parts of the Israeli economic mindset, and the many successful IPOs and M&As of Israeli start-up companies have turned our small country into a world leader in certain high-tech areas. Indeed, many of today's global players started their operations in the local Israeli economy. As with leaders, a predisposition is needed, but there is certainly room for born entrepreneurs to be nurtured. It is with this in mind that we propose the present program of studies, which, amongst other things, is designed to provide participants with exposure to the models, theories and practical approaches to entrepreneurship and innovation that Israeli professionals and academics have developed over the years.

Program description The program will frame the central aspects of doing business in Israel within the context of the country's booming high-tech economy and the emerging of global Israeli companies. It will offer a unique synthesis between state of the art academic studies and practical, hands-on experience with the Israeli high-tech industry and its leaders. Academically, the connecting thread of the DBI program will be TAU’s School of Management case studies as well as HBS case studies on strategy issues of Israeli companies. The cases reflect the Israeli economy, concentrating on companies different in size, from different industries, and at different lifecycle stages. The students will be accommodated at the Art Plus Hotel located at the center of Tel Aviv. Program objectives The emphasis in the program will be on understanding the dynamics of the Israeli entrepreneurial environment and on analyzing Israeli innovative companies at different lifecycle stages. Students will be expected to develop a top management perspective of a high-tech company and focus on formulating a competitive business-level strategy for it. Course materials  Dan Senor and Saul Singer Start-up Nation: The Story of Israel's Economic Miracle, Twelve (2009)  Case studies  Articles Students are required to read all the materials prior their arrival

The cases  Applied Cognitive Engineering (ACE) a small Israeli company specializing in computer-based cognitive simulation training based on a special training method developed for Israeli combat pilots, was established in the summer of 2003 (TAU School of Management Case) https://en-recanati.tau.ac.il/past-cases  Given Imaging is a world leader in developing and marketing patient-friendly solutions for visualizing and detecting disorders of the gastrointestinal tract (Recanati Business School Case) https://en-recanati.tau.ac.il/past-cases  Rafael Advanced Defense Systems designs, develops, manufactures and supplies a wide range of high-tech defense systems for air, land, sea and space applications. Rafael developed a special "incubator" for internal innovation (Harvard Business School Case) Case No. 9-602-011  TaKaDu - TaKaDu is a leading software provider of Integrated Event Management solutions for the water sector, empowering utilities to manage their networks efficiently. TaKaDu’s patented technology uses raw data from multiple sources, analyzing the data to detect and manage the full 3

life-cycle of network events, including leaks, bursts, and faulty assets. Based on big data analytics and sophisticated algorithms, TaKaDu's IoT cloud-based solution helps water utilities to detect problems early, reduce water loss, shorten repair cycles, improve customer service, and more. (Harvard Business School Case) Case No. 514011  HBS cases are copyright protected therefore students are requested to purchase a copy of the case at HBS site. http://www.hbsp.harvard.edu/b01/en/academic/edu_home.jhtml Articles Dr. David Katz  What’s next for drip irrigation? http://www.israel21c.org/whats-next-for-drip-irrigation/  Israeli firms offer technology to slake the world’s thirst , May 12th 2011 http://www.economist.com/node/18682280

Course assignments All students are required to read the course textbook (Start-up Nation) the relevant articles& cases prior to the first class meeting. Each student will submit by e-mail a short case analysis during the course, and a final case analysis to the course's teaching assistant according to the course schedule. Course grade Case analysis (should not exceed three pages) 30% Final case analysis (should not exceed six pages) 70% The DBI team wishes you a pleasant stay in Israel and an enjoyable program!

Tentative Agenda

Day Hours Topic Lecturer / Comments Room

Breakfast At the hotel Pick up from the hotel and drive Meeting Idit at the hotel 09:20-10:00 to the University lobby Prof Shai Danziger, Assistant Dean of Recanati 10:00-10:30 Program inauguration International Affairs Building Udi Aharoni, DBI Room 253 Director Recanati 10:30-12:00 Israel at a glance Prof. Uriya Shavit Building Wednesday Room 253 th Orientation tour at the University Meeting Idit at the May 18 12:00-13:30 and Lunch on Campus classroom Recanati 13:30-15:00 The Israeli-Arab conflict Prof. Uzi Rabi Building Room 253 Beit Hatfutsot, the Museum of 15:00-16:30 the Jewish People 16:30 Drive back to the hotel

19:30 Meeting at the hotel lobby Opening dinner 19:45-21:15 Eatwith

Dress code for the day: Casual

Breakfast At the hotel Pick up from the hotel and drive 08:20-09:00 Outside the hotel to the University Recanati Fueling the Economy – The Israeli 09:00-11:00 Dr. David Zvilichovsky Building High Tech Industry Thursday Room 253 May 19th 11:00-11:15 Break

Recanati 11:15-12:45 The Israeli VC industry Dr. Barak Ben-Avinoam Building Room 253 12:45-14:00 Lunch On campus Recanati Meeting with an Israeli Moti Radomski 14:00-15:30 Building entrepreneur Room 253 15:30-16:00 Drive to Tel-Aviv

16:00-18:00 Sightseeing tour in Tel-Aviv-Jaffa Puaa 18:30-20:00 Dinner with TAU Israeli students Restaurant

20:00 Drive back to the hotel

Friday & Saturday Free weekend May 20th & 21st Breakfast At the hotel Pick up from the hotel and drive 08:20-09:00 Outside the hotel to the University Recanati 09:00-10:30 Case study analysis - Ace Dani Dankner Building Room 304 10:30-10:45 Break Recanati Case analysis: Rafael& Given Dr. Nir Brueller 10:45-12:15 Imaging Building

Growing a technology company Sunday Room 304 May 22nd 12:15-13:45 Lunch On campus

13:45-14:15 Drive to Tel Aviv

14:15-15:30 Visit to The Library

16:00-17:00 visit to Soluto

17:30-18:00 Driving to the Restaurant

18:00-20:15 Dinner at the BlackOut restaurant Dinner in the Dark

20:15-20:30 Drive back to the hotel

Dress code for the day: Casual

Breakfast At the hotel Pick up from the hotel and drive 8:20-09:00 Outside the hotel to the University The Israeli and the Global macro Prof. Leonardo Recanati

09:00-10:30 environment Leiderman Building Monday Room 304 May 23rd 10:30-10:45 Break

"Intrapreneurship" – Instilling Recanati 10:45-12:15 Mechanisms Inducing Corporate Noam Tamari-Vexer Building Entrepreneurship Room 304

12:00-13:30 Lunch On campus

13:30-14:45 Drive to Military base

14:45-16:15 Visit a Military base

16:15-17:15 Drive back to the hotel

Free night

Dress code for the day: Casual

Breakfast At the hotel Pick up from the hotel and drive to 08:30-09:30 the Kibbutz 09:30-11:00 Visit to Netafim company Agricultural Company 11:00-12:00 Tour to Kibbutz Magal Cultural tour 12:00-13:00 Israeli Lunch At the Kibbutz

Tuesday 13:00-14:00 Drive to the company May 24th Social entrepreneurship in Israel Dr. Gil Winch 14:00-15:15 Visit to Call Yachol 15:15-16:00 Drive back to Tel-Aviv Pick up from the hotel and walk to 19:00 the restaurant 19:15-21:00 Dinner Hamitbahon

21:00-21:15 walk back to the hotel

Dress code for the day: Casual

Breakfast At the hotel Pick up from the hotel and drive to 08:20-09:00 Outside the hotel the University Creativity and Ideation – Omer Pomerantz Recanati 09:00-10:30 Interactive workshop Building Room 304 Wednesday 10:30-10:45 Break May 25th Creativity and Ideation – Omer Pomerantz Recanati 10:45-12:15 Interactive workshop Building Room 304 12:15-13:15 Lunch On campus Recanati 13:15-14:45 Case study analysis- TaKaDu Amir Peleg ,C.E.O Building Room 304 7

14:45-15:00 Break Recanati Cleantech in Israel: From scarcity to 15:00-16:30 Dr. David Katz Building entrepreneurship Room 406

16:30-20:00 SICC case competition Optional

16:30 Drive back to the hotel Dress code for the day: Casual

Breakfast At the hotel

08:00 Pick up from the hotel Outside the hotel Touring Jerusalem including lunch  Kotel – Western Wall – the holiest site in the world for Jews.  Roof top view of the Dome of the Rock and El Aqsa Mosque, the third 09:30-17:30 holiest site in the world for Moslems. Thursday  Church of the Holy Sepulcher, place of the crucifixion, death and burial of Jesus according to Christian tradition. May 26th  And more 17:30 Farewell Dinner Roza Restaurant

20:00 Drive back to the hotel Dress code for the day: Casual, Comfortable.  Walking shoes (several hours of walking during the day), hat, rain coat/umbrella Requirements for entrance to the holy sites: covered shoulders & long pants for men and long pants/skirt for women Friday Flying back home May 27th

Doing Business in Israel- Assignments Case study preparation Each student will submit (by email) a short case analysis according to the course schedule and a final case analysis to the course's teaching assistant. Given Imaging’s case analyses should be submitted by mail to the course teaching assistant - [email protected] by Sunday, May 22nd 09:00. The personal case analyses should be submitted by mail to the course teaching assistant - [email protected] by June 15th. Course grade  Given Imaging case analysis (should not exceed four pages, 1.5 space, font 12)  Final case analysis (no more than six pages1.5 space, font 12)  Papers must be submitted in WORD format only  Questions for Given Imaging:  How attractive is the industry in which Given Imaging operates? What are the key success factors (KSF) in this industry? How do they affect a small firm like Given Imaging compared to a large firm like Olympus ?  Analyze Given Imaging’s value chain and discuss its primary and support activities separately. Does the firm lack some core activities ? If yes, which ones ? Provide quantitave support to your answer.  Analyze Given Imaging’s competitive advantage. Is it sustainable? If not, what can the firm do to increase its sustainability? Final Assignment questions 1. What are the strengths and weaknesses of Israel? 2. What is the competitive advantage of Israel and is it sustainable for the next ten years? 3. What are the pros and cons to develop Israeli giants companies like Teva vs. developing small start-ups companies like ACE or other start-up companies you visited from two perspectives: entrepreneurs' perspective, Israeli macroeconomic perspective?

Appendix A- short bios DBI director Udi Aharoni Udi Aharoni is the CEO & Academic Director of Lahav Executive Education at the School of Management and a lecturer of the School's MBA and EMBA strategy, global strategy and innovation strategy courses. In addition, he is the director of Eli Hurvitz Institute of Strategic Management at the School.

Course coordinators Idit Admon Idit Admon is the operational coordinator of all international activities at the Tel Aviv University's School of Management. She holds an undergraduate degree in political science from the Hebrew University of Jerusalem. Hila Rachmani Hila Rachmani is the Director of International Cooperation at Tel Aviv University's School of Management. She holds a graduate degree in Diplomacy from Tel Aviv University and a bachelor of arts degree from the Hebrew University of Jerusalem.

Faculty (in alphabetical order) Dr. Barak Ben-Avinoam Dr. Barak Ben-Avinoam is a managing Director at Fastlane Ventures, responsible for expanding the company’s investor profile in international markets and for raising financing for further business development and expansion. Barak is a recognized international expert who has a very strong entrepreneurial background in establishing and managing technological start-ups and has worked at several leading investment companies. He has co-founded a number of successful businesses and have raised more than $80 ml of investments. Previously, Barak was CEO and COO of leading international investment firms, including Lab-One, Iris Ventures and Nielsen Innovative. Dr. Nir Brueller Nir Brueller joined the Recanati School, after serving as Affiliated Senior Research Fellow and Adjunct Professor of Strategy at INSEAD, Fontainebleau and Singapore. He holds a Ph.D. in Management (Strategy) from Tel Aviv University, an MBA with Distinction from INSEAD, and an M.Sc. and B.Sc. (Cum Laude) in Electrical Engineering from the Technion – Israel Institute of Technology. Dr. Brueller’s research interests revolve around corporate strategy, with a special focus on high-tech industries, mergers and acquisitions, and technology entrepreneurship and strategy. His Ph.D.

dissertation on value creation and capture in technology-grafting acquisitions won the Yoram Rosenfeld Best Doctoral Dissertation Prize (2006). In addition to his academic research and teaching, Dr. Brueller has worked with top management teams of international high-tech firms on corporate development, M&A strategy and implementation.

Dani Dankner In 2001, Dankner established Ace - Applied Cognitive Engineering - a start-up company that developed a computerized system that trains and improves the cognitive skills needed for executing a specific task or performing in a given job, through the use of a video game designed to improve decision making under stressful conditions. Dani Dankner holds an LL.B. from Tel Aviv University and an MBA from the Faculty of management.

Dr. David Katz David Katz is a specialist in natural resource policy and economics, with a focus on water management. Currently Executive Director of the Akirov Institute for Business and Environment at Tel Aviv University, he also teaches courses in environmental economics and corporate environmental strategy at the Recanati School and the Porter School of Environmental Studies. He has worked as a consultant on projects dealing with environmental and resource management for a range of international organizations, including the US Agency for International Development (USAID), the United Nations Convention on Trade and Development (UNCTAD), the Association of Southeast Asian Nations (ASEAN), as well as for numerous environmental organizations. Dr. Katz has, in addition, lectured on the strategic value of water resources in the Middle East at the Israeli Defense Force's National Military College and has been interviewed and quoted by several national and international news organizations, including CNN, BBC, and Reuters.

Professor Leonardo Leiderman Leonardo Leiderman is the Jack and Lisa Yael Professor of Comparative Economics at the at the Eitan Berglas School of Economics, Tel Aviv University. Leiderman is also the Chief Economic Advisor of Bank Hapoalim, the largest commercial bank in Israel. Among previous senior positions held by Prof. Leiderman are: Managing Director and Head of Emerging Markets Economics at Deutsche Bank, based in New York and London, from 2000 to 2002. Before that, from 1996 to 2000, Leiderman was Senior Director, de-facto Deputy Governor, and Head of the Research Department at the Bank of Israel. Leiderman (who was born in Argentina, and is a citizen of Israel) joined Tel Aviv University in 1979, after completing his Ph.D. at the University of Chicago under the supervision of Nobel Laureate Professor Robert E. Lucas, Jr. From 1988 to 1991 Prof. Leiderman was Chairman of the Economics Department at Tel Aviv University, and from 1994 to 1996 as well as from 2008 to 2011 he headed the Pinhas Sapir Center for Development at Tel Aviv University. Over the years, Leiderman visited various entities especially in the US, such as the University of Chicago, Boston University, the International Monetary Fund, the World Bank, and the IADB. In various years Professor Leiderman received the Best Teacher Award in Social Sciences at Tel-Aviv University. Professor Leiderman has also advised several central banks and ministries of finance, including those of Brazil, Colombia, Costa Rica, Mexico, Peru, Czech Republic, Poland, Venezuela, Georgia and Turkey. Leonardo Leiderman's published work includes more than 70 articles in professional journals and books, and 7 written or edited books. His research has covered an ample list of topics within the areas of macroeconomic policy, monetary theory, and international finance. Most of his recent work deals with inflation targeting, exchange-rate regimes, and capital inflows to emerging market economies. At various times, Professor Leiderman was interviewed live at CNBC, Bloomberg, the BBC, and CNN on economic matters related to emerging market economies.

Prof. Uzi Rabi UZI RABI is Director of the Dayan Center of Middle Eastern and African History at Tel Aviv University. He previously served as Vice-Director of the S. Daniel Abraham Center for Regional and International Studies and as a senior researcher at the Center for Iranian Studies at Tel Aviv University. His academic interests include states and societies on both sides of the Persian Gulf, state-building in the Middle East and oil, politics and the regional geopolitical context. Prof. Rabi’s forthcoming books include Yemen: The Anatomy of a Failed State and Iran, Israel and the Arabs: The Changing Face of 12

the 21st Century in the Middle East. He holds a B.A., M.A. and Ph.D. in Middle Eastern and African History from Tel Aviv University.

Moti Radomski Moti Radomski, Co-Founder & CEO, Mamaya Inc - the world's first automated social media agency for online merchants. Moti has over 20 years of experience with products that make a change. In 2005, co-founded YaData, a marketing data-mining company, which was acquired by Microsoft three years later. Prior to that, Moti played key roles in Product Management, Sales and R&D for various technological companies.

Prof. Yesha Sivan Prof. Yesha Sivan is the Executive Director of The Coller Institute of Venture at Tel Aviv University faculty of management; a professor of Management Information Systems (MIS) at the School of Management and Economy at the Tel-Aviv-Yaffo academic college (until Sep-2015); and the Director of the Executive Master of Meaningful Innovation (EMMI) at the Hong Kong Polytechnic Design School. He is also the founder of Metaverse Labs (MVL) - a leading think tank focusing on innovation via virtual and real worlds. Sivan's professional experience includes developing and deploying innovative solutions for corporate, hi-tech, government, and defense environments (see for example: the Harvard 9-Keys for Knowledge Infrastructure). He published numerous papers in the areas of strategy and IT, innovation and venture, knowledge, 3D3C virtual worlds, and standards. Sivan received his doctorate from Harvard University. He has taught EMBA, MBA, engineering and design courses in his areas of expertise. His blog is http://www.dryesha.com.

Prof. Uriya Shavit Senior lecturer at the Department for Arabic and Islamic Studies and the Program for Religious Studies. Specializes in the study of Muslim minorities and democratization processes. Author of five books and 20 articles in these fields.

Noam Wekser Noam Wekser is a born Corporate Entrepreneurship Leader (Intrapreneur) with nineteen years of professional experience, working in diversified managerial atmospheres, where he managed national and international teams. He has worked in national, large international companies & organizations, understanding customers’ needs, generating proposals, selling and managing services sales, coordinating processes redesign and software implementation projects. Noam has extensive 13

knowledge of international ERP/CRM/BI software implementation and Change Management methodologies, and as such, he is a subject matter advisor for many CEO’s. Parallel to his current position Oracle as a country leader, Noam serves as a lecturer and Key Note Speaker in leading universities and academic institutes. Noam developed a unique active workshop designed to encourage hired employees to evolve into internal entrepreneurers within their place of work and become INTRApreneurs. Noam graduated Recanati’s prestige Executive MBA Program at Tel-Aviv University and in Electronics Engineering at Tel-Aviv University. Dr. David Zvilichovsky Dr. Zvilichovsky is a senior faculty member at the Tel Aviv University - Recanati Graduate School of Business. He holds a Ph.D. in Economics as well as an MSc. in Computer Sciences from the Tel Aviv University. David has been involved with the Israeli High Tech industry for over 20 years. David worked with and consulted to some of Israel’s leading technology companies and has been active in numerous financing and M&A transactions pertaining to technology startups. Over the years David has been active as a board member and advisor in the areas of Venture Capital, Technology Innovation and Early Stage Ventures. Dr. Zvilichovsky also served as a special economic advisor to the national economic council at the Israeli prime minister’s office, during the 2008 market crisis. His current research interests include: Innovation Strategy, Networks, Externalities, Technology Change, Bubbles, Entrepreneurship, R&D and the Internet Economy.

Prof. Moshe Zviran Prof. Zviran serves as Dean of the Faculty of Management. His published works have appeared in MIS Quarterly, Journal of MIS, Communications of the ACM, Information and Management, Omega, Information Systems, The Computer Journal, Computers & Security, Health Care Management Review, Journal of Medical Systems and other journals. He is also the author of Information Systems - From Theory to Practice (co-authored with Seev Neumann, published by Dyonon, 2001). Prof. Zviran serves as a consultant in the areas of information systems for a number of organizations and as a board member of several private and public companies. He has also a number of years of experience in various positions in information systems in private and public organizations.

Israel General Information

Languages Hebrew and Arabic are the official languages of Israel and English is a compulsory subject in school. Most Israeli’s speak at least a little bit of English. All commercial and street signs are written in both Hebrew and English and often in Arabic as well. Currency The local currency in Israel is the New Israel Shekel (NIS), which can be obtained at almost all local exchanges. For more information about the NIS and the current exchange rate, visit the Bank of Israel’s website at http://www.bankofisrael.co.il Electricity Electrical current in Israel is 220 volts AC, single phase, 50 Hertz. Most Israeli sockets are of the three-pronged variety but many can also accept some European two- pronged plugs. Adapters are required for American plugs

Dress code during your cultural tours If touring please take into consideration that you may be visiting a variety of holy sites; the dress code at these sites is strict and modest: covered shoulders & long pants for men and long pants/skirt for women. We also recommend wearing comfortable shoes. Time zones Israel is two hours ahead of Greenwich Mean Time which puts it seven hours ahead of the Eastern United States. Weather Israel's climate is Mediterranean in the north and arid in the south. In summer, average temperatures range between 65°-90°F (18°–32° C) over most of the country. Winters are usually mild, with temperatures on the coastline averaging 57° F (14°C). Temperatures in Jerusalem and the north of Israel are about 6° C lower and in the south of Israel and at the Dead Sea 9°C higher (72°F). We strongly recommend that you check the weather forecast before packing at www.weather.com. Israel at a glance Israel is not only the name of the country, it is also a people. The history of the Jewish people and its roots in the Land of Israel span approximately 35 centuries. During this long history, the cultural, national and religious identities of this land were formed. The State of Israel was established in 1948 and Jewish independence was renewed 2,000 years after it was originally lost.

Some important facts: Full Country Name: The State of Israel Area: 22,000 sq. km; about the size of New Jersey Population: 8.5 (it has grown 11 times since the state was found in 1948) Capital City: Jerusalem Languages: Hebrew, Arabic are the official languages of Israel and English is widely spoken. Education: 11 years compulsory. Literacy rate: 95% (female 93%; male 97%). Religion(s): Judaism, Islam and Christianity, Druze Currency: New Israeli Shekel (NIS) Major political parties: Likud, Kulano, The Jewish Home, Agudat-Israel, Shas President: Rubi Rivlin Prime Minister: Binyamin Netanyahu Flag Description: White with a blue hexagram (six-pointed linear star) known as the Magen David (Shield of David) centered between two equal horizontal blue bands near the top and bottom edges of the flag, symbolic of a Jewish prayer shawl. Population Of the approximately 8.5 million Israelis, 77. % of the country’s population is counted as Jewish. Since 1989, nearly one million immigrants from the former Soviet Union have arrived in Israel, making this the largest wave of immigration since independence. In addition, almost 50,000 members of the Ethiopian Jewish community have immigrated to Israel. Thirty-six percent of Israelis were born outside Israel. Of the non-Jewish population, about 80% are Muslims, 10% are Christian, and about 10% are Druze. Cultural life With a population drawn from more than 100 countries on five continents, Israeli society is rich in cultural diversity and artistic creativity. Israel boasts more than 120 museums, including the Israel Museum in Jerusalem, which houses the Dead Sea Scrolls along with an extensive collection of regional archaeological artifacts, art, and Jewish religious and folk exhibits.