Palestinian High-Tech Sector Is Bright Spot in Otherwise Ailing Economy
With an acute labor shortage in the high-tech field, Israeli companies are looking to the Palestinian market for needed skill sets
Dozens of Palestinian high-tech startups are popping up and growing throughout the Palestinian territories.
Ibrahim Barham is the founder of SAFAD, a three-decade-old information technology company based in the West Bank city of Ramallah, which employs 160 people.
A pioneer in the field of high-tech, Barham told The Media Line that IT is one of the main sectors which the Palestinian economy can depend on.
Barham says the growth in high-tech companies can be attributed to two reasons: One, the Palestinian nation is made up of many people from the young generation who want to be involved in the sector; and two, there are many new graduates in the field.
The Palestinian economy is largely dependent on foreign aid, and almost a quarter of the workforce is employed by the Palestinian Authority, making high-tech, and start-ups, the backbone of the Palestinian economy.
Majdi Mafarja, who holds a doctorate in computer science and teaches at Birzeit University, opened his own startup, LogesTechs, in 2018.
“We are talking about a system that competes globally and was created with Palestinian brains,” he told The Media Line.
The company is located in the heart of Ramallah’s startup central and is one of a number of fast-growing startups in the Palestinian territories. Since its inception three years ago, LogesTechs has mushroomed from having just two part-time employees, to 15 full-time, highly skilled workers.
LogesTechs is a logistics management system used by customers in the Palestinian territories, Jordan, Iraq and Bahrain. Mafarja told The Media Line that he hopes to soon expand his business into more Gulf states like Saudi Arabia, as well as to North America.
With 14 Palestinian universities producing thousands of engineers and software developers each year, the Palestinian IT sector startups enjoy access to a rare talent pool.
Some 3,000 Palestinian information and communication technology graduates enter the market each year.
The startup scene in Palestine is giving hope to the younger generation who are always full of ideas, and they are so excited, and they haven’t the actual reality and restrictions in Palestine and the Arab world.
With an acute labor shortage in the high-tech field, Israeli companies are looking to the Palestinian market for needed skill sets.
Last year, Israel’s government approved granting entry permits to Palestinian workers in the tech sector.
“It will definitely affect us. Because this will raise the pay and pension ceiling, and we cannot compete because our financial capabilities are limited,” Mafarja said.
“I didn’t understand it. From a political point of view, they [Israel] think it’s positive to help the Palestinian economy. I don’t see it as a positive from my side as a Palestinian. If they want to help let them ease the barriers,” Barham said.
The field of high-tech and start-ups for Palestinians is not restricted to men only, as Palestinian women are leaving their marks in this male-dominated and competitive sector. Many women are leading the way with unprecedented force.
“I believe when you are combining two sectors together, business and technology, women mostly excel more than men because the way women think is more distributed, but men focus on certain channels. So, mixing two industries together comes more naturally to women than men,” said Laila Akel, COO at LogesTechs, who once had her own successful startup.
“The startup scene in Palestine is giving hope to the younger generation who are always full of ideas, and they are so excited, and they haven’t the actual reality and restrictions in Palestine and the Arab world,” she said.
But Akel says there are limited resources in the Palestinian territories that hinder the continued growth of the “vibrant” sector.
“In every ecosystem, a startup needs money and network; for investors in Palestine, as I mentioned, it is a smaller ecosystem, and the amount of funding that is coming to Palestinians is limited,” she explained.
Omar Al-Sahili, who founded a management company more than a decade ago, told The Media Line that despite being a relatively young field, the Palestinian startup ecosystem has proven itself, and is rapidly growing, but that “business experience” is needed.
Al-Sahili, 30, of Nablus in the West Bank, is the owner of Business Alliances, a management consultant firm that provide services for the IT sector in the Palestinian territories. He says that the high-tech sector has come a long way in the last two-and-a-half decades. “I think today we have a mature, growing sector,” he said.
Another startup, Hakini, provides mental health services online in Arabic to users in the West Bank, as well as to the wider Middle East and North Africa (MENA) area, seeking to help those who are nervous about doing so in-person.
Hakini, which means “tell me” in Arabic, is the brainchild of Sondos Mleitat, an architectural engineering graduate from Birzeit University, and it was based on her own personal experience.
“The idea of Hakini was based on a personal story that I went through a few years ago, I was depressed and anxious and I had to deal with many complications and challenges. So I needed someone who is professional who can help me overcome these situations,” she said.
Mleitat quickly realized that mental health services aren’t widely and readily available to Palestinians.
“It was very challenging for me to overcome the stigma and talk about it or to tell someone that I need help in this field. The second thing is that it was not easy for me to know what is the right service for me, who is the right therapist for me that I can go and talk to,” she said.
Hakini is the first platform in the MENA region that provides this kind of support.
The company was able to become a reality with financing from an angel investor from Dubai, United Arab Emirates. It was co-founded in 2020 with Majd Manadre.
Manadre and Mleitat are partners in business and in life: They got engaged last year. Manadre quit his job at the PricewaterhouseCoopers LLP international financial consulting firm to build Hakini with his fiancée.
“We had zero resources at the beginning. We decided to start with content, we have a main issue about content in the Arab world, there is a lack of content available in the Arabic language and most of the available content is translated from Western countries. We wanted to start with content, to provide content adapted to Arab culture,” Mleitat said.
She says that there’s a need is to “promote” the mindset of investment among female entrepreneurs in the MENA region.
“I think if we want to empower female entrepreneurs, if we want to help them utilize their skills, if we want to help them to be able to build sustainable solutions and to take part in the decision-making process and to make the change they are looking for in their societies, we need to invest in them,” Mleitat said.
Barham says there are several things that are preventing the IT sector in the Palestinian territories from growing.
“The telecom barriers the Israelis are putting on Palestine made severe damage to the IT sector in Palestine. We are using 3G in a very low capacity,” he said.
Israel allowed Palestinians in the West Bank to receive 3G mobile in 2018, and 4G service is expected within a year.
Barham says this is good news, but not enough.
“Another barrier is what we call the non-tariff barriers from the Israeli authorities on moving the goods. If we want to import the advanced high-tech product it’s not easy for us. They are putting many regulations on us under security reasons,” he said.
Barham says in order for the high-tech field to expand, he wants American high-tech companies to link directly with Palestinian firms. He calls on the American companies to open offices in the West Bank and to deal directly with the Palestinian companies.
“What’s missing with Americans? More communication. Part of their business plan (should be) to have a linkage with Palestinians. If they work with Israelis why not work with the Palestinians directly? We don’t need to work with any mediators,” he said.
Barham says that over the past two and a half decades, the relationship with US administrations and American IT businesses has been positive, with local businesses meeting regularly with USAID and US consulate officials.
That changed under the White House of former US President Donald Trump.
“We noticed good understanding and good listening until, unfortunately, the Trump administration. We as an IT sector have suffered heavily in that period,” Barham said.
However, he says that under the new administration of President Joe Biden, the relationship is looking up.
“It started again, and we noticed good messages and signals from USAID, and the commercial attaché. There are some projects that they said are ready to be helping the Palestinian economy at large, and partly for the IT,” said Barham.