Business Synergies between
By Yohan Albo
Amidst a raging pandemic and precipitating global economic crisis, the State of Israel and the United Arab Emirates agreed to normalize their diplomatic and economic relations. The deal, formerly known as the Abraham Accord, will set the stage for a new era of cooperation between two of the largest economic players in the Middle East.
For Israel, the agreement could not have come at a better time. Driven primarily by the Covid-19 pandemic, the Central Bureau of Statistics reported that, in the second quarter of 2020, Israel’s GDP shrank by nearly 30%, marking its worst contraction in decades.
As Israeli businesses attempt to climb their way out of the current economic downturn, collaboration with the UAE will be paramount. In fact, businesses–small and large–now face a seed of blossoming opportunity. With proper care, they can soon pick its fruit.
Upon normalization, the two countries moved swiftly to formalize areas of cooperation. For example, the Israeli and UAE governments signed a spate of banking and finance memorandums, establishing a framework for cooperation in joint ventures and signaling the broader opening of markets to trade and investment. For instance, back in mid-September 2020, the chairman of Bank Leumi (one of Israel’s two largest banks), Samer Haj Yehia, and Leumi’s CEO Hanan Friedman, who were visiting the UAE with a delegation of Israeli business leaders, signed accords with First Abu Dhabi Bank (FAB) and the Emirates NBD of Dubai.
Companies in the private sector quickly followed suit. One of the first Israeli firms to capitalize on the geopolitical advancements was OurCrowd, an active venture capital fund based in Jerusalem that partnered with a Dubai-based business development incubator, Phoenix Capital LLC, to jumpstart business and technology collaboration. Israeli fintech firms Fintica AI Ltd. and Salaryo also moved promptly, receiving investment from UAE-based funds.
These private-sector-led deals are ripe with potential. On the one hand, the UAE offers an overflowing pool of capital and hungry investors looking for ventures, particularly in the tech sector. Israel, on the other hand, brings to the table an expansive ecosystem of budding startups and world-class technology. Coupled together, these forces could feed off of each other symbiotically.
Take agricultural technology
Israeli companies lead the world in producing farming products tailored for arid climates. Simultaneously, the UAE, a large importer of food, has shown a keen interest in following in Israel’s footsteps and kickstarting its own domestic agricultural industry. Israeli AgriTech companies, such as Agritask (one of our client in this space), could therefore be the target of new investment and joint venture initiatives. Moreover, businesses could also sell food directly to Dubai, and even leverage the UAE’s strategic location and sophisticated logistics network to access distant markets in the Middle East and Asia that were previously out of reach.
Artificial intelligence could be another hotbed for collaboration.
Artificial intelligence could be another hotbed for collaboration. The UAE government has ambitiously set out to integrate AI into different segments of its economy and more broadly, become a global leader in the field. Israeli firms (e.g. DataLoop, Gong.io, Aidoc, and more.) and research institutions (such as the Bar Ilan Computer Science department and its dedicated artificial intelligence group), currently at the cutting edge of AI, could work with the UAE to promote knowledge sharing and accelerate the pace of development in both countries. This could materialize, for instance, in Israeli companies testing their products in UAE cities, which are among the most demographically diverse in the world. A similar UAE partnership with India deemed the “India-UAE Artificial Intelligence Bridge” has been in action since 2018.
There is also room for cooperation in the energy domain
Striving to diversify its petroleum-reliant economy, the UAE has worked to adopt alternative energy sources. In the wake of recent global oil-price volatility, the need for such an energy transformation is intensifying. Unsurprisingly, the Israeli government, too, has embraced the deployment of renewable energy technology to curb the country’s reliance on natural gas and other fossil fuels. Put together, this shared vision could create a growing market for collaboration and investment. A regional market that could definitively interest leading Israeli energy investors and operational renewable energy firms such as the Noy Fund and Nofar Energy.
As these examples illustrate, synergies between the two markets are wide-ranging, transcending the limits of any one industry. In time, more will likely be uncovered and piece by piece the Israeli-UAE economic partnership could grow to new heights.
At DataToCapital, we recognize the opportunities at stake; but we also understand the countless obstacles inherent to entering a market like the UAE. One administrative misstep or market miscalculation could quickly devolve into costly delays, financial losses, or worse.
Yohan Albo – CEO Datatocapital
In conclusion, Our services are built to prevent that from happening. By leveraging our market expertise and web of connections spanning from Tel Aviv to Dubai, we are prepared to work with your business every step of the way to navigate through challenges and orchestrate effective strategies. So whether your goal is attracting investment from a new set of VC funds or setting up your venture in an Abu Dhabi free zone, our team will work by your side—delivering real results.
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DataToCapital is a boutique management consulting firm that supports global tier-1 firms and start-up companies operating in Israel in their route to excellence and market dominance. Our core services, designed for CEOs, Executives (VP-level and above) and Entrepreneurs, can be divided into three areas: Market Intelligence, Corporate and Product Strategy, and Execution Support on top-down strategic initiatives.
The quality of the work we deliver in the three areas mentioned above is equivalent to what your company may already get from the top-3 consulting firms that operate in the Israeli market, BUT here’s the twist and why our tier-1 clients think we are superior.
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