Modern Day Miracles
We recently discussed Israel’s rising real estate market and the government’s efforts to prevent a housing bubble. One reason for Israel’s resiliency is that, unlike most other countries, its unemployment numbers did not spike during the global recession. A reader asked me how Israel has been able to maintain its relatively high level of employment. I am going to focus on his seemingly non-real estate question for two reasons: (1) the strength of the overall economy greatly impacts on the real estate market; and (2) to demonstrate that hidden miracles are occurring daily in Israel.
After the United States, Israel has more companies listed on the NASDAQ than any other country in the world. In fact, more Israeli companies are listed on the NASDAQ than all European companies combined! Why is this phenomenon occurring in tiny Israel, population 7,000,000 or only 1/1,000 of the world’s population, and not elsewhere?
“Start-Up Nation,” an exceptional book written by Dan Senor and Saul Singer, argues that many of Israel’s challenges are actually, from a business perspective, a positive. For example, the IDF requires young, low-ranking soldiers to take individual initiative, putting them in management positions where people’s lives literally hang on their decisions. These experiences translate well to the world of business and innovation.
Better Place, a recent start-up, is an extraordinary example of Israel’s innovative prominence. In 2005, Shai Agassi was at a forum of young global leaders, when they were challenged: how would you make the world a better place by 2030? His response was to end the world’s dependence on oil and, consequently, cut off the rogue regimes’ funding of international terrorism. As 50% of all oil is used for transportation, the obvious place to begin was the automobile industry.
Agassi, Founder and CEO of Better Place, created a revolutionary business model to make electric cars that are less expensive to buy and run, boast quicker acceleration and no noise, and release no emissions, thereby significantly lowering the world’s air pollution. Israel’s national grid of charging stations and battery switching stations will be fully operational by January 2012 when they roll out the new electric cars.
Better Place provides a snapshot of Israeli entrepreneurial energy that has ironically been nurtured to combat the adversity created by neighboring countries. This national ethos of creativity and persistence (yes, and chutzpah) has helped transform Israel into the world’s innovative leader.
Due to Israel’s miraculous economy, housing prices have remained strong. Although overseas buyers would prefer lower prices, the good news is that Israel’s commanding role in the world economy bodes well for the long-term viability of its real estate industry.
Gedaliah Borvick is the founder of My Israel Home (www.myisraelhome.com), a real estate agency focused on helping people from abroad buy and sell homes in Israel. To sign up for his monthly market updates, contact him at gborvick@gmail.com.