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Gaza 2.0: Technology not Bombs

Despite regular electricity outages, Palestinian entrepreneurs have turned new technology into a big local success story

I’m drinking the juice of an unidentifiable fruit in a crowded office space, shared by several entrepreneurs. A rather earnest, bearded young man is telling me, “Business is business. There’s no room for emotion”.

This is not a hollow claim: we’re in the jumbled backstreets of Gaza City, where the destruction wrought by the latest Israeli bombardment, ‘Operation Pillar of Defence’, lays all around us. This street, like so many others, is pock-marked with holes and rubble.

In this room, at least, the big concern is not bombs, but technology. For these men - and they are all men; much like elsewhere in the world, the tech industry here is dominated by males - the future is something they have in their hands, at the click of a mouse and the swipe of a smartphone screen. They are Palestine 2.0 and, like their counterparts in London and Tel Aviv, they want to be part of a technological revolution that is changing the way the world does business.

Entrepreneurs in Gaza cannot separate their economic success from their unique form of resistance to the Israeli occupation. As Abdul Hamid, founder of smartphone app start-up Sanabel tells me, “The Israelis have their siege, but we have our minds. Knowledge is power. We are breaking the siege electronically, one Tweet at a time”. He decided to start his company after looking at the challenges of the conventional job market. “We don’t have a lot of choices. For every government job there are 900 applicants”. He decided to put his degree in computer engineering to better use by starting up his own company developing educational and entertainment software for smartphones.

Many of these men have similar stories, displaying a singular talent for overcoming adversity through enterprise. Mohammed Sheriff Yousef has developed an educational website aimed at children between four and nine years old, which also provides parents with regular reports of their children’s progress. Given the realities of life in Gaza he considers the difficulties parents face in trying to raise their children in a non-hating environment. “If your children see their friends die in war, and have their homes destroyed, they are going to see how other children live on TV and not understand why their lives are so different. In such circumstances it’s hard not to breed hate”.

If these young men are anything to go by, many Palestinian parents are doing a good job. Ahmad Abd El Rahman is a case in point. Passionate about computer games from a young age, he dreamed of becoming a successful games programmer. Now he has his own company, ‘Games Madness’. When the recent conflict broke out he was at a conference in Holland, exchanging gaming ideas with developers from across the globe.

After the conference ended he rushed back to Gaza. The Egyptian border police warned him against going back in. “They thought I was crazy. They said ‘Why don’t you stay in Egypt until it’s over’. And I said, ‘Miss the war? Never.’ I wanted to go back to Gaza to stand with my people”.

It is this determination that is making the Palestinian high-tech market a lure for investors. A white paper commissioned by the US multinational Cisco and published in July found that the Palestinian IT sector grew from 0.8 per cent of GDP in 2008 to 5 per cent in 2010 and is still growing. The industry has seen a 64% increase in foreign business since 2009 with the paper concluding, "Palestine is on the brink of becoming the next high-tech global hotspot".

Saed Nashef, founder of Veritas Venture Partners and Sadara Ventures estimates that there are more than 300 technology companies in the West Bank and Gaza Strip, with about 3,200 people working on mobile apps and web sites. It was the untapped potential of venture capital investment in Palestine that encouraged him to return from the US.

He does not look at the political instability of the region as a liability but as an asset, as he told the New York Times earlier this year: “Our investors often ask us about political sensitivities, but the truth is that Palestine is not new to instability. Palestinian people have been living under occupation for a long time and despite hardships, people still need to put food on the table. This has resulted in a lot of savvy entrepreneurs with resilient, adaptive business models."

His fund, Sadera, plans to invest exclusively in Palestinian technology start-ups and aims to take stakes in about 15 companies over 10 years. It has already raised $28.7 million in three years from Cisco Systems, Google, the European Investment Bank, and the George Soros Fund.

This does not mean that the Palestinian high-tech industry is without its problems.The industry is in its infancy, generating a combined profit of less than $6m annually compared to Israel's $1.3bn.

Palestinian universities offer technology courses that produce thousands of graduates a year, but the burgeoning market can only accommodate a fraction of them. The Palestinian IT Association (PITA) estimates that at least half of these graduates are unemployed and neither Hamas nor the Palestinian Authority can afford to offer the industry the financial support it urgently needs.

Palestinians might resist the occupation but they are also stunted by it. As well as regular electricity shortages, Israel's restriction on high-frequency mobile signals in the occupied territories means that Palestinian mobile companies cannot provide 3G, restricting software development.

That doesn’t deter the entrepreneurs I meet. When El Rahman was starting out in computer games he didn’t have anyone to help him so he had to do everything himself, from learning web design, to programming code, to teaching himself how to play guitar. He compares it to “cleaning a city with a toothbrush”. That seems to me an adept metaphor for what entrepreneurs in Gaza are trying to do every day.