Despite — or possibly because of — its small size and geopolitical isolation, Israel has developed a global reputation for its cutting-edge high-tech industry. This special report explores the drivers behind Israel’s innovative impulse, drawing in part on a recent series of panel discussions sponsored by the U.S. Chamber of Commerce. The report also looks at the partnerships Israeli firms have forged with U.S. companies and the reasons why the Israeli venture capital business is undergoing a painful period of adjustment. An interview with Aaron Wolf, a professor of geography at Oregon State University and a trained mediator, looks at unconventional ways of solving deep-running conflicts, such as disputes over water. Also, an interview with Chaim Katzman, chairman and founder of Gazit Globe, explores the strategy behind one of the world’s top real estate investment multinationals.

From Haifa to Herzliya, the Fertile Ground of Israeli Innovation

Israel today has the second largest number of start-ups in the world, after the U.S., and the largest number of Nasdaq-listed companies outside North America. Panelists at a recent conference in Washington, D.C., titled, "The United States and Israel: Building Business Through Innovation," explored the factors that have contributed to innovation in Israel, while debating what has helped — and hindered — the small, Middle Eastern country’s bid to be a global hotbed of entrepreneurship.

Forging Deals with U.S. Partners: A Case of Mutual Benefit

Hundreds of U.S. and Israeli companies have formed partnerships in recent years, and many more alliances are in the works. The deals are beneficial to both sides on several fronts. The Israelis get funding, marketing expertise, job growth and better access to the North American market. The Americans also benefit on the job front and through increased market access. In addition, they reap savings in development and production and get a chance to tap into Israel’s talent for innovation. But marriages are not always smooth, experts warn, and the cultural differences in doing business sometimes get in the way.

Israeli Venture Capital: Between a Rock and a Hard Place

The VC industry, once lauded in Israel for its ability to launch a rich stream of high-tech start-ups, has been hurt on two fronts of late: Firms in the sector cannot raise money for new funds and they also can’t easily exit from existing investments via IPOs. The question is whether this painful squeeze is merely part of a cyclical slump or representative of something more far-reaching. The doomsday scenario, according to some industry experts, is that future high-tech start-ups will not need the VC industry as much as before.

Tapping Spirituality to Help Resolve Global Water Conflicts

Aaron Wolf is both a professor of geography at Oregon State University and a trained mediator in conflict resolution — two professions he has melded together when working on the Arab-Israeli conflict as well as numerous disputes in central and southeast Asia and Africa. Some consider Iranian-born Wolf’s use of spirituality in negotiations to be unconventional. Others disagree, noting that he is, in fact, drawing on ancient schools of thought. But either way, as he noted in this interview with Knowledge at Wharton, there are plenty of lessons provided for everyone on both sides of a negotiating table.

Gazit’s Chaim Katzman: ‘Our Strategy Is Long-term Ownership’

Gazit Globe (usually called Gazit) is among the world’s top real estate investment multinationals. Listed on the Tel Aviv stock exchange, the firm operates in some 20 countries and owns or operates 6.3 million square meters of space spread over more than 650 properties. In the U.S., Gazit’s investment vehicles include Equity one, a real estate investment trust that focuses on high quality retail properties. Gazit’s total asset value exceeds $15 billion. Chaim Katzman, Gazit’s chairman and founder, spoke recently with Wharton real estate professor Peter Linneman and Knowledge at Wharton about the company’s origins, strategy and his personal management philosophy.