Innovation Status in Palestine Dr. Adnan Judeh, Executive Director of the Higher Council for Innovation and Excellence, adnan_jj@yahoo.com KEY WORDS: Palestine, Innovation, Excellence, Entrepreneurship, Economy, Higher Council. Corresponding author: Dr. Adnan Judeh, Higher Council for Innovation and Excellence, Al-Reehan Neighborhood Building No. 5, Ramallah, Palestine. Tel: +970 2 2820018 Fax: +970 2 2820015 Mobile: + 970 599398500 Email: adnan_jj@yahoo.com, ajudeh@hcie.ps ABSTRACT Palestinians in the past decades have invested remarkably in human capital through education and career professionalism. Innovation has been implicitly considered in the Palestinian culture. However, in its explicit form, innovation just started to formulate lately by initiatives from the private sector, higher education institutes and civil society. Currently there are about twenty institutions such as incubators, accelerators and centers of excellence in Palestine. The main focus of these institutions is mainly on information technology, and this is attributed to the growing need to this sector and the relatively law investment it requires. Acknowledging and responding to the growing confidence in the potential impact of innovation on economy, the Palestinian leadership wisely considered to establish the first governmental institution for the propose of establishing an entrepreneurial ecosystem and acting as an umbrella, a regulator and a facilitator for innovation-related initiatives and institutions in Palestine. Having a vision of a Palestinian society rich in innovation, distinguished in performance, in all aspects of life, and believing in the potential innovative energies of the Palestinian people, and acknowledging the vital role of innovation in the establishment of the State of Palestine, his Excellency the Palestinian President Mahmoud Abbas has established the Higher Council for Innovation and Excellence (HCIE) two years ago. The HCIE pursues to play a leadership role in consolidating a culture of innovation and excellence within the Palestinian society, empowering innovators and strengthening a national innovation system as the main pillar of the knowledge economy that we seek. The HCIE has strategic goals of disseminating and entrenching a culture of innovation and excellence among the Palestinian people, strengthening the governance of national innovation system, effectively representing Palestine in regional and international organizations and institutions that work in innovation, building up effective communication channels with the Palestinian competencies in the Diaspora, and working with the relevant national institutions to identify the national priorities in the field of innovation and excellence. Palestinians aspects of life, including innovation, have been and still are hindered by challenges imposed by Israeli occupation. Palestinian economy is controlled by Israel and largely dependent on external donation. Moreover, our natural 1
resources, which are a main foundation for a strong economy, are also controlled by occupation. Investing in innovation is increasingly becoming an argent means in developing and enhancing the living conditions of our society, to overcome imposed challenges. This report discusses the current status of innovation in Palestine and the strategies adopted by the HCIE to have it boosted. The innovation priorities of our society, the ambitions and challenges will also be discussed. INTRODUCTION Rebuilding the Palestinian sustainable economy is critical to the establishment of an independent Palestinian state. Palestine is an isolated and geographically divided country. Its resources are controlled by and its economy is dependent on occupation. As a consequence, Palestinian economy is weak, unsustainable and mainly dependant on donations. However, Palestinians in the past decades have invested remarkably in human capital through education and career professionalism. Palestinians are a young nation, where large portion of the population is young and under eighteen years old. This portion is 46% in West Bank and 61% in Gaza (UNESCO, 2014). Palestinian businesses have a reputation for professionalism and product quality. Large Palestinian enterprises are internationally connected, with partnerships extending to Asia, Europe, the Gulf, and the Americas (U.S. Department of State, 2014). However, restrictions on the movement and access of goods and people between the West Bank, Gaza, and external markets imposed by occupation continue to have a deleterious effect on the private sector and limit economic growth. The challenge to occupation and the imposed hard living conditions have created a resilient, determined and innovative Palestinian community. Consequently, more and more well-educated and passionate young people are turning to entrepreneurship as a means to create their own job opportunities and improve their communities. Numerous organizations are emerging to support this trend, and many of these businesses address local gaps and needs within the community. Combined with exceptional technical talent, Palestinian entrepreneurs are the key to advancing economic development. INNOVATION INNITIATIVES IN PALESTINE Several initiatives on innovation and entrepreneurship have been started in Palestine in the past few years by the private sector, higher education institutes and civil society. These initiatives take the form of awards, incubators, accelerators and centers of excellence. These initiatives include: o Palestine Academy for Science and Technology (PALAST): An autonomous public, not-profit organization which aims at institutionalizing scientific and technological research in Palestine, promoting scientific discovery and innovative technological advances, in addition to fostering the use of science and technology in various domains. o Al Nayzak: A non-profit organization specializes in education, counseling and research in various fields of science, technology and engineering. o The Palestine Investment Fund (PIF): A public shareholding company, owned by the Palestinian people. Its main objective is to promote sustainable economic growth and private sector 2
development in Palestine, through originating and investing in strategic projects, creating new job engines to reduce poverty and unemployment. o The Palestinian Investment Promotion Agency (PIPA): An autonomous agency of the State of Palestine that provides constantly improved customer service to foreign and domestic investors, by utilizing an effective One-Stop-Shop, special investment incentives and state of the art technology to attract investment. It also facilitates cooperation between the private sector and the government, thereby creating and maintaining a more competitive investment environment. o Arabreneur: A not for profit entrepreneurship initiative which provides young entrepreneurs with the necessary environment, expertise and finance. o Palestine Award for Excellence and Creativity: An annual award on institutional excellence, exceptional project and exceptional individual with a special need. o Palestine Information and Communication Technology Incubator (PICTI): A non-profit organization built to revitalize and sustainably grow the ICT sector in Palestine. o Leaders Organization: A non-profit organization dedicated to the development of Palestine, through two initiatives; the digital entrepreneurship program and the socioeconomic program. o FastForward: A start-up accelerator, where selected start-ups are given a seed investment, working environment and mentorship. Through its 120-day program, FastForward helps entrepreneurs transform their ideas into competitive business. o Partners for Sustainable Development: A non-profit organization which prepares students to acquire analytical and entrepreneurial skills, by promoting creative thinking and innovation through information and communication technology. o Innovation: A non-profit micro-finance company which provides financial services to small businesses. o Gaza Sky Geeks (GSG): A start-up accelerator which identifies the top startups in Gaza, provides them with seed investment, and connects them to mentors, trainers, investors, and other resources to help them achieve global growth. We typically work with startups that have already begun developing or testing a concept. o Palestinian Information Technology Association of Companies (PITA): An association that represents more than 150 major ICT companies in Palestine. The objectives of PITA include enhancing the ICT business environment and strengthening the competitiveness of Palestinian ICT enterprises. o Sharek Youth Forum: A youth initiative which helps Palestinian youth develop their distinctive ideas, display their creativity, implement their projects and strengthen their personal and practical skills. 3
o Young Entrepreneurs Palestine (YEP): A non-profit organization which aims to assist young Palestinian entrepreneurs to succeed in all their endeavors and contribute actively to the socioeconomic development of Palestine. o Palestinian Education for Employment Program (PEFE): A non-governmental organization which provides skills-training for youth with limited opportunity and also provides start-up support. o Expotech: An annual technology week where ICT companies present their products and an opportunity for networking with investors, entrepreneurs, and governmental, business and academic leaders. o INJAZ Palestine: A national member of the global organization Junior Achievement Worldwide, which provides programs for Palestinian schools and universities that focus on several key content areas: business, economics, entrepreneurship, ethics/character, financial literacy and career development. o Palestine for Credit and Development (FATEN): A non-profit organization in the field of microcredit. Its objective is providing diversified, sustainable and high-quality financial services for entrepreneurs of small and micro enterprises, pioneers and economically active low-income individuals especially women, through empowered human resources and advanced technical capabilities to contribute to the empowerment of the Palestinian family in particular and the development of the Palestinian society in general. o Juhoud for Community and Rural Development: A non-governmental organization that productively engages youth and women, both economically and civically, in their communities. Besides the mentioned initiatives, almost every higher education institution has its own center of excellence. These centers share the objective of providing the students and recent graduates with the necessary skills, training and guidance to start their own business or find the right career. These centers also maintain strong linkage and interaction with industry and focus on research of interest to this sector. It should be noted that some of the above mentioned initiatives and institutions are mainly established to support innovation and entrepreneurships, whereas the rest are established for different purposes and still support innovation in an implicit way. Moreover, most innovation initiatives specialize in information and telecommunication technology (ICT). This sector, ranging from software development to ICT outsourcing and telecommunications, has registered impressive growth over the past few years. In the year 2010 it accounted for about 5 % of the State of Palestine s gross domestic product (GDP). The total sector revenue is estimated to be somewhere between US $ 350 million and US $ 1 billion (The State of Palestine, 2014). In terms of human resources, it is estimated that there are over 15,000 ICT professionals working in the different sectors; public, private, NGOs, education, etc (Imad A. Khatib, 2013). The fact that the majority of the innovation initiatives are in the ICT sector is attributed to the relatively low investment it requires, the high portion of young in the Palestinian population, the growing need to this sector, the independence on conventional infrastructure and the fact that it is not 4
affected by border restrictions imposed by occupation. Basically innovation in ICT can be achieved at home, using only a laptop and some programming, networking and marketing skills. The following is a summary of the existing strengths and weaknesses, and future opportunities and threats of the current innovation system in Palestine (SWOT analysis). Strengths: 1. The establishment of the Higher Council for Innovation and Excellence. 2. Abundance of highly educated, skilled and trained Palestinians. 3. High percentage of young in the population. 4. Resilient and determined society. Weaknesses: 1. Palestine is an occupied and isolated country. 2. It is geographically separated and politically divided. 3. The Palestinian economy is connected, dependent, weak & unsustainable. 4. The resources in Palestine are limited and controlled by occupation. 5. Weak institutional infrastructure. 6. The local market is small. 7. Shortage in entrepreneurship success stories. 8. Shortage in communication and coordination between the different innovation-related bodies. Opportunities: 1. Linkage with Palestinians in the Diaspora. 2. Increasing national interest in innovation and entrepreneurship as a tool for progress. Threats: 1. Fear of failure. 2. Weak interaction between academia and industry. 3. Unstable political, economical and security conditions. 4. Brain drain. 5. Lack of innovation supporting strategies. 6. Shortage in research and development. 5
THE HIGHER COUNCIL FOR INNOVATION AND EXCELLENCE (HCIE) The establishment of HCIE and its structure The HCIE was established in July, 2012 and is located in Jerusalem, but due to the current situation it is temporarily located in Ramallah city in West Bank. It belongs directly to the President s office who shows great interest and continuous follow up of the development and achievements of the council. The establishment of the council followed from the Presidents belief in the potential innovative energies of the Palestinian people, and his acknowledgement of the vital role of innovation in the establishment of a knowledge-based economy as a main pillar for the establishment of the State of Palestine. The general supervision on the council is assumed by a board of directors and a chairman of the board (council s chairman). For the purpose of facilitating the fulfillment of the council s strategic objectives, the thirty-member board of directors represents almost all innovation-related bodies and institutions present in West Bank, Gaza and the Diaspora. Palestinian universities, non-governmental organizations, innovation institutions, government ministries, research centers, the presidential office, banks association, businessmen association and industry association are all represented in the board. Those bodies are represented by high-level, decision-making representatives. The board members are subdivided into the following specialized permanent committees: o Policies committee o Stimulation, exploration, experimental development and incubation committee o Central evaluation committee o Funding, investment and production committee o Arab & international cooperation committee Each committee is assigned specific responsibilities, including formulating the necessary plans and special programs for the council. The committees also provide the guidance for the council and monitor its performance and achievements. The strategic objectives of the HCIE For the purpose of achieving the vision set for the HCIE, the following strategic objectives were adopted: 1) Dissemination and entrenchment of a culture of innovation and excellence among the Palestinian people, especially among youth through: a) Setting up a code of values, directives, and standards conducive and stimulating to innovation and excellence. b) Providing the necessary incubation and various kinds of support to innovators. 6
c) Working with the relevant ministries to develop policies, regulations and stimulating and supportive programs for innovation and excellence, especially at the level of primary education and higher education. 2) Strengthening the structure of innovation system in various sectors through: a) Supporting institutions that work in the field of innovation and excellence, strengthening their institutional capacities and stimulating the coordination and concerted efforts and the integration of their roles in order to maximize the collective impact, and putting an end to the duplication and fragmentation of efforts. b) Encouraging private sector in Palestine and in the Diaspora on increasing its investment in the field of innovation and creativity, stimulating the issue of establishing multi-party partnerships including the public and private sectors, civil society, universities and any other institutions concerned, so as to form an organizational structure or framework that stimulates and enhances innovation and facilitates the realization of economic and developmental outcomes. c) Building up information systems, knowledge resources, and providing information services that are supportive to the individuals and public corporations working in innovation field. d) Providing legal, stimulating and supportive environment for innovation and creativity. e) Cooperating with the concerned parties in preparing legislation projects related to innovation and excellence. 3) Adequate and effective representation of Palestine within the innovation and creativity system, regional and international; facilitating thereby the use of all available opportunities for networking, and the transfer and resettlement of adequate creativities and innovations of knowledge and technology necessary. 4) Building up effective communication channels with the Palestinian competencies in the Diaspora, creating innovative methods and programs to facilitate and stimulate the use of their various resources in the areas of excellence and innovation. 5) Working with related establishments in determining the national priorities in the field of innovation and excellence. For the purpose of progressing towards achieving the above mentioned objectives, an executive plan has been recently presented by the planning committee and adopted by the council s board. The achievements of the HCIE Even though the council has been recently established and most of the efforts in the previous period have been focused on organizational and foundational activities, yet there have been some achievements, which are: 7
1) Through the council s strategic partnerships with the Palestinian universities and research institutions, numerous joint initiatives have been started to boost research in areas of national priority, such as energy, nanotechnology, medicine, agriculture and entrepreneurship. Moreover, the council endeavors to build linkages between the academic, research sector and the industrial and business sectors. 2) The establishment of the Palestinian Incubator for Energy (PIE) five months ago, in partnership with Jerusalem District Electrical Company (www.pie.ps). PIE is registered as a non-profit company which specializes in energy and its applications. Its objectives include supporting entrepreneurs through the early stages of business development, stimulating innovation and new initiatives in energy technology, encouraging investment in the energy technology sector and the creation of new jobs. The incubators evaluation committee has recently selected three projects out of twenty applied projects. The selected projects will be provided with all the necessary financial, technical, administrative, logistic and business support throughout the whole incubation process, which is required to transform these projects into real investment. 3) The council is currently preparing to hold an innovators forum, where selected Palestinians and Palestinian friends entrepreneurs from Palestine, the Diaspora and all over the world, will be invited to present and show their success stories. This form will be held in Ramallah and its objectives are to motivate Palestinians especially youths by exposing them to these success stories and to encourage the participant entrepreneurs to invest in Palestine. The forum is expected to be held by mid 2015. 4) As an official body responsible for building, organizing and supporting the innovation ecosystem, a coordination workshop with the national institutions involved in innovation, such as, incubators, accelerators and centers of excellence for the purpose of organizing this sector, providing them with the needed support and creating the essential coordination among the different parties on one hand and among these parties and the council on the other hand. 5) Memberships, memorandums of understanding or coordination meetings with the following regional and international organizations: Arab Council for the Gifted & Talented (ACGT), International Movement for Leisure Activities in Science and Technology (Milest), Arab Robotics Association (ARA), World Council for Gifted and Talented Children (WCGTC), Arab Innovation Network (AIN), the United Nations Economic and Social Commission for Western Asia (ESCWA), World Bank, the Korean agency for international cooperation, Global Communities (formerly CHF International), the Indian and Chinese representatives in Palestine. 6) Funding and providing incubation for innovative projects: Dozens of projects have been received by the council. After appropriate evaluation by the evaluation committee, eleven successful projects were selected. Some of them were financed, others were accepted for incubation (energyrelated projects) and the rest were provided with the necessary networking and linkage with the relevant institutions. 7) The council has started coordinating with the concerned parties including governmental institutions, academia, private sector and innovation institutions for the purpose of formulating a 8
national innovation strategy. Moreover, the council has addressed the minister s council requesting the inclusion of innovation in the sectorial strategies of the individual ministries. SUMMARY AND RECOMMENDATIONS Despite the constrains imposed by occupation on all Palestinians aspects of life, including innovation, still several innovation initiatives have succeeded to find their way in the past few years. These efforts are spontaneous and scattered with limited impact on the national economy. However, the emerging of such innovation and entrepreneurship initiatives within the Palestinian culture and institutions is an encouraging and promising phenomenon, which has to be stimulated, organized and pushed forward. This great responsibility is assumed by Higher Council for Innovation and Excellence, in cooperation with all other relevant parties, such as governmental institutions, academia, research and development centers, existing innovation institutions and private sector. The young, resilient, determined, highly educated, highly skilled and well trained population, are existing and acknowledged strengths that will accelerate the establishment of a viable ecosystem for innovation in Palestine. The current priority of the Higher Council for Innovation and Excellence is to establish a national innovation strategy, which identifies the country s innovation priorities, promotes innovation culture, institutionalizes innovation and entrepreneurship at all relevant institutions including the education system, establishes linkages between academic, research institutions and the industrial sector and provides the necessary incubation and financing for innovative ideas and projects. To overcome the obstacles imposed by occupation, such as the isolation, the incomplete sovereignty over the resources and the weak institutional infrastructure, and to establish a viable innovation ecosystem, professional support and assistance is essential. In fact, an external incubation process for this ecosystem is required at this stage. This incubation comes in the form of investments in this sector, the signing of cooperation agreements with expert countries and organizing bilateral or multilateral workshops and conferences on innovation. REFERENCES 1. Imad A. Khatib, 2013. Role of Innovation in the Development of ICT Software Enterprises in Palestine. 2. The State of Palestine, 2014. ICT Sector Export Strategy for 2014 2018. 3. UNESCO, 2014. Country Programming Document for Palestine 2014 2017. 4. U.S. Department of State, 2014. Investment Climate Statement June 2014. 9