Israeli High-Tech Incubator Provides Platform For Arab Startups

When it was first established back in 2002, there were many doubters who said that an Israeli high-tech incubator founded by Jewish and Arab entrepreneurs to develop ideas by Arab-Israeli scientists would never work.

Almost 10 years later, the New Generation Technology (NGT) incubator in Nazareth is not only still on its feet, but is thriving, with 20 startup companies in various stages of development. “We’ve succeeded in providing Arab entrepreneurs with a platform to turn their ideas into businesses and it’s become known throughout the Israeli-Arab sector that such an opportunitity exists. I think that’s been our biggest accomplishment,” says Nizar Mishael, the chief financial officer of NGT since 2006.

Originally founded by five leading Israeli-Arab business people and Israeli-American investor Davidi Gilo, NGT under its longtime CEO Nasri Said continues to operate on a combination of private and government funding, receiving an annual budget from the Chief Scientist’s Office of the Industry, Trade & Labor Ministry. The only incubator of its kind in Israel in that it’s a joint Arab-Jewish venture, NGT is housed in a building on the edge of Nazareth’s industrial zone, a predominantly Arab city about an hour’s drive from Tel Aviv. Next door to NGT are two companies with like-minded agendas – MIT Soft, a high-tech manpower company set up to get around the obstacles facing Israeli Arabs, and Tsofen, a non-profit organization that prepares Arab science graduates for the job market.

“The founders realized that in the 1990s, there was great potential for the Arab sector in the way of entrepreneurship,” says Mishael. “But the problem was, until NGT, only one or two high-tech companies had been established by Arabs. They understood that there was a need for a company to nurture the Arab entrepreneur – and to also provide opportunities for Arab doctors, PhDs and lab workers.”

Davidi Gilo, a successful Israeli businessman who has initiated many projects aimed at coexistence between Jews and Arabs in Israel, says the idea behind NGT was one of full Jewish-Arab partnership.

“There are many Israeli initiatives that open factories and do different things with Arabs – but basically the Jews are the employers and the Arabs the employees,” says Gilo. “NGT is the only project in Israel that is a pure true partnership between Jewish and Arab businessmen in Israel. We’re all board members, and we’ve all invested the same amount of money.”

NGT’s location in the Galilee, where more than half the population is Arab, enables NGT to utilize the vast knowledge that the community has amassed in life sciences – a talent pool that includes approximately 700 PhDs, 3,000 MDs and about 700 Israeli Arabs working in the pharmacology and pharmaceutical fields.

“Most of our companies are based on medical devices and biomed products,” says Mishael. “And that’s not by coincidence. The Arab sector in Israel is known to have a huge potential in the fields of medicine and biomed. And even more, the companies that we’re founding are developing products and devices that are going to help that same population by stimulating the economy and creating jobs.”

After nearly 10 years in existence, NGT can boast some impressive numbers. Twenty-one companies have been established, with 10 of them graduating the incubator period to stand on their own, and five companies raising more than $8 million. Even more impressive is that eight of the companies have been established in the last 15 months, indicating that NGT is on the upswing. Amid a flurry of activity, Mishael still sees many challenges facing the incubator as it readies to enter its second decade.

“There are two ways to measure our success – one is if we’re bringing in money to the company and the second is if we’re succeeding in establishing Arab entrepreneurs and raising awareness of careers in the Arab sector,” he says.

“In the first goal, we haven’t succeeded yet but we’re optimistic. Most biomed and pharma sector companies take on the average of eight to 10 years to establish themselves. And because we didn’t often have the funds to support these companies, they had to raise the funds themselves, which caused further delays. Regarding the second vision, we’ve been a great success – establishing companies, developing entrepreneurs including women. Some of our companies have succeeded in raising money and in this way, we’ve become the leaders in the Arab high-tech sector.”

According to Mishael, NGT’s success has prompted many young Arabs to enter the scientific fields, and the company regularly takes part in the Young Entrepreneurs program, an Israeli version of Junior Achievement. “We’re helping to create the new generation of Arab entrepreneurs,” he says.

No less important, though, is NGT’s role in developing a model for coexistence and cooperation between Jews and Arabs in Israel. “I don’t want to say that we’re singlehandedly making peace, but at all of our companies, there are Arabs working next to Jews and it’s a very good atmosphere,” says Mishael. “I think that probably many of the Jews had never worked with Arabs before, but they all give 100 percent to each other and we’re managing to bridge the gap between Arabs and Jews in Israel.”

So what do the next 10 years look like? Mishael is intent on raising more funds, establishing more companies and building NGT to the level whereby it can support a wide portfolio of companies and give them the stepping stones to success. “And ultimately, we’d like to give the Arab entrepreneur in Israel a chance to see some money from his idea – and be able to reinvest it into the community. That’s our basic goal and hope for the future.”

Based on its track record so far, NGT is on the right path to achieve that vision.

Via MFA