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  • Lasse Staahlnacke

The unifying force of Palestine’s innovation ecosystem

Updated: Mar 24, 2021

Successful innovation and entrepreneurship imply complex interactions between multiple stakeholders. The unique regional situation of Palestine and Israel, or the Occupied Palestinian Territories, conditions the binational relationship beyond question, but it also conditions the cultural dynamics within each mono-ethnic group. These dynamics influence the capacity to learn, absorb and ultimately perform innovation within the Palestinian entrepreneurship ecosystem.

The rise of the Palestinian knowledge-economy

In the last decade, local innovation and entrepreneurship have been promoted as means to generate economic growth. Due to Israeli restrictions on mobility, digital technologies and their ability to foster stable workflows through remote work are inherently attractive for realizing increased welfare for Palestinians. Accordingly, in June 2020 the World Bank launched a $15 million campaign to help the Palestinian IT sector upgrade the capabilities of tech-based companies and create more advanced jobs for the country’s youth. To direct investments, an impressive social network analysis was conducted. However, this analysis does not include the 2,4 million Palestinians that live in East Jerusalem and the Occupied Palestinian Territories and therefore draws an incomplete picture of reality. If such policy recommendations are not bolstered with contextualized, qualitative data, interventions risk fuelling existing gaps rather than unifying the ecosystem.

Palestine's knowledge-economy is emerging and is centered in and around Ramallah in the West Bank. Here, however, the public regulatory and private administrative environments display overall weak propensities for systemic collaboration. With the lack of private equity finance in Palestine, the Palestinian support structure for innovation and entrepreneurship is largely comprised of donors’ implementing arms, i.e. grant-based organizations. According to our data, NGOs generally display arms-length competitive behavior in their pursuit of funding instead of aiding entrepreneurship and innovation by developing cohesive and collaborative support structures. Furthermore, due to convenience and fear of facing patriotic accusation, leaders of the Palestinian outsourcing sector on software development are engaging very little in entrepreneurial ventures and interactive learning. One example of this was when Birzeit University dismissed the outsourcing company ASAL Technologies from a job fair at their premises, deeming them traitors for collaborating with Israeli tech industries. Essentially, such dynamics have left innovative and entrepreneurial activities in the hands of individual Palestinians, many of whom operate in confined social silos with no broader systemic network structure to rely on. However, emerging collaborations between new and innovative incubator NGOs and Palestine’s largest corporation, PALTEL, show that united efforts in the West Bank are improving.

The paradox of political sensitivity

The status quo of Israeli occupation has physically segregated Palestinians for more than sixty years. This made us wonder whether Palestinians are experiencing cognitive segregation too? What effect would such perspective have on supporting a productive pipeline of Palestinian entrepreneurship? With these questions in mind, we set out to explore how the cultural dynamics among Palestinians across the areas of the West Bank, East Jerusalem and the Occupied Palestinian Territories (Israel) dictates entrepreneurial processes of collaboration and learning.

Dubbing the case of the Trans-Palestinian innovation networks, we went to East Jerusalem to conduct more than 20 in-depth interviews with Palestinian professionals across the public, civil and private sector. Accessing each of the geographies under investigation, we gathered some really interesting data on the matter. The data revealed that most respondents were puzzled by the complexity associated with Israeli-Palestinian collaborative ties. What should be considered legitimate collaborations and what ties should be considered acts of normalizing the Israeli occupation?

Interpretative gaps do exist at an individual level within each area, but when comparing responses from across the geographies, the interpretative gaps increase. Interpretive gaps were furthest apart between West Bankers and 48’ers (Palestinians living inside the Occupied Palestinian Territories). Furthermore, an intergenerational interpretive gap revealed itself, which adds further complexity to the equation.

Younger generations tend to behave opportunistically and individualistically, moving away from traditional dogmas of political resistance. In the current state of the ecosystem, this tilts both entre- and intrapreneurs towards opportunities within the more developed Israeli infrastructure. For example, a managing staff member of a Palestinian organization that supports innovation stated that entrepreneurs enrolled in their program are often referred to opportunities within the Israeli infrastructure. This is despite the organizations’ official resistance to any such collaboration. In this way, the organization exploits opportunities that are at its disposal, while still dodging patriotical accusations from fellow Palestinians. As a consequence, it is challenging for Palestinian actor A to assess whether Palestinian actor B engages in activities with Israeli actors, which is or should be considered illegitimate. This type of behavior is a key driver in injecting mistrust into the ecosystem, distorting the potential of reaping the fruits of Trans-Palestinian collaborations and relationships.

Roughly put, the way that Palestinian political sensitivity affects local collaboration for entrepreneurship and innovation is two-fold and paradoxical. Palestinian ‘victimhood’, as many locals refer to it, forms, on the one hand, the very premise that inspires a strong collective social order. The virtue of resistance inevitably finds its way into the core of Palestinian identity. As a shared virtue, such ‘commonness’ is fundamental to enable good and dynamic processes of interacting, learning and collaborating. On the other hand, the political sensitivity hinders the development of a crucial social cohesion in the Palestinian innovation system due to the mistrust that it generates among Palestinian innovators. Without a cohesive support structure that rests on a unanimous Palestinian trajectory, reaping the potential of existing entrepreneurial and innovative capacities across all Palestinian communities are taking devastating blows.

Station J: a hub that changes perspectives

Innovation, as implied by leading research, is stimulated by sharing and circulating knowledge within a network. Innovation performance emerges out of systemic network cohesion, or embeddedness, of networks that include organizations that generate and diffuse knowledge and organizations that exploit and apply knowledge. Processes of interactive learning between these actors are therefore critical to ‘perform’ innovation locally. The local culture works as glue, which either enables or disables network embeddedness. In other words, networks are instrumental in tying local talent and knowledge to the supply of innovative products and services to the market.

With the help of DanishChurchAid’s innovation fund, Station J, a new Palestinian entrepreneurship and innovation hub was established in early 2020. Station J is located in East Jerusalem and is strategically well-placed to tap into Palestinian networks that operate both the Occupied Palestinian Territories and the West Bank. Leading scholars within trans-national entrepreneurship indicate that entrepreneurs with the ability to focus and understand more than one place provide a comparative advantage to innovate over locally based entrepreneurs.

When contextualizing this argument, Palestinian 48’ers, as well as East Jerusalemites, possess significant value for promoting a positive trajectory of the Palestinian knowledge-economy as they have greater access to highly developed Israeli universities and industries. In order to mobilize Palestinian diverse and experienced talents, it therefore becomes relevant to build a cohesive Trans-Palestinian network structure spanning both sides. At present, these collaborative ties are close to non-existent, which should receive attention in relation to building a pipeline of Palestinian entrepreneurship and innovation.

As the management at Station J discusses, real entrepreneurial traction is activated at the grassroots level: from the bottom up. It is important to exploit available capacities in a systemic fashion to reach a point, where Palestinian entrepreneurship becomes a reliable and trusted work track, both locally and in the international society. As part of supporting Station J’s agenda for generating local entrepreneurship among aspiring Palestinian Jerusalemites, the management therefore uses the hub’s position to connect across physically (and to an extend cognitively) segregated Palestinian innovation networks. But such achievement does not come easy with the underlying issues of mistrust spurring in the Palestinian scene of innovation and entrepreneurship.

Reinforcing Palestinian diplomacy through embedded innovation networks

The study’s findings on Palestine’s situation shed an evolutionary light onto a regional phenomenon, which inevitably is under constant change. Using the scene - and culture - of innovation and entrepreneurship as a platform to bridge the Palestinians in the segregated sub-regions could possibly move Palestinians closer together socio-culturally.

In 2013 Cisco’s former CEO, John Chambers, went on the front page of Forbes magazine and asserted the possibility of achieving ‘Peace through profits’. If profits, as such, should have a chance to achieve any meaningful impact on regional peace, the focus ought to be directed to the right place. A place of great sensitivity, as it has been outlined.

It is complex for Station J and, really, any mediating actor that seeks to embed Trans-Palestinian innovation networks in order to mobilize and exploit existing talent. The job is simply too complex for singular units to organize, rather such work is conditional to broader systemic change. At present, there is no overarching playbook to guide this development.

Behind the economic trajectory of entrepreneurship and innovation lies the social fabric that supports it. Economic and social dynamics are mutually interdependent forces within an innovation and entrepreneurship ecosystem. When combined they contribute equally to the evolvement of a collaborative and prosperous trajectory of Palestinian entrepreneurship and innovation. In the face of a possibly growing cognitive divide between segregated Palestinians, would embedded Trans-Palestinian innovation networks provide a novel platform through which Palestinians can innovate and reform their very resilience against the Israeli occupation?

Undoubtedly, such transformation necessitates delicate acts of balancing economic opportunity with traditional dogmas of socio-political resistance. Should the inclusion and systemic mobilisation of Palestinian talent within the region lead to more tangible commercial successes, then the embeddedness of Trans-Palestinian innovation communities may indeed represent an opportunity for reforming Palestinian resistance through commercial diplomacy.

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