The Scarlett Johansson Sodastream controversy was only the beginning. This mini-crisis shed a new light on some of the potential political challenges facing Israeli businesses. In the case of Sodastream, the problem is particularly pronounced due to the presence of a factory in the West Bank. However, Sodastream is far from the first Israeli company to face the ire of Israel’s political opponents around the world.
The BDS movement has been active for nearly a decade and promotes a complete boycott of Israeli business, academia, and cultural institutions. While the BDS movement has been largely ineffectual due to its radical political agenda that sees a boycott not as a tool to achieve peace, but rather as way to bring about the eventual dissolution of the Israeli state; its existence and potential for economic disruption have taken on a more visible role in the debate surrounding Israeli-Palestinian negotiations.
Over the last few months there have been nearly a dozen op-eds and other stories in The New York Times that mention the potential ramifications of BDS. This has mostly been framed in the context of the challenge BDS will pose to Israel if there isn’t progress in the peace negotiations. What has rarely been discussed, are the actual challenges the BDS movement faces in exerting pressure on the Israeli economy. This is a critical component of the discussion and one that is generally ignored. Why is this the case? It stems from the fact that a cursory examination of the Israeli economy demonstrates that a serious economic boycott of Israel is very difficult to achieve at this stage.
Israel is already deeply integrated into the global economy, especially in the technology sector. The story of the “Startup Nation” is well known and Israeli tech companies are deeply connected with their counterparts in Silicon Valley and around the world. The BDS movement is certainly aware of Israel’s technological success. Yet what isn’t mentioned in this context is the nature and structure of that success, and how these factors play an important role in hindering the efforts of the boycotters.
The BDS movement has attempted to appeal directly to consumers, encouraging them to actively avoid Israeli products. There are a few examples of where they have been successful. But the greatest challenge facing the boycotters is the lack of identifiably “Israeli” products. It’s actually quite unfortunate, but Israel has yet to develop leading and recognizable international brands. Apart from a few bright examples, Sodastream being the most relevant, there are very few Israeli companies that have to rely on mass market appeal to average consumers.
Israel’s specialty has always been tech innovation, not managing consumer facing brands. This is the reason that Google, Microsoft, Facebook, Apple, and countless other tech-giants have set up R&D, manufacturing, or other operations here. Beyond that, some of Israel’s most successful tech companies, such as Amdocs or CheckPoint, operate on a B2B basis, where purchasing decisions are made on purely economic grounds. In-fact, Israel’s single largest publicly traded company, Teva, has based its business on the production of generic drugs – the exact opposite of clear and identifiable branding.
This doesn’t give boycotters many Israeli products to actually boycott. On the other hand, some of the most significant “Israeli” products are nearly impossible to avoid. For example, the single largest employer in Israel’s tech space is Intel. Can you imagine how anyone would would even begin to approach a boycott of a company responsible for 80% percent of all CPUs in computers today?
That doesn’t mean Israel can ignore the boycotters. They represent a serious challenge to Israel simply because they are a dedicated group which has committed to take action to weaken, undermine, and delegitimize Israel. More over, their end goal is terrifying in its rejection of the internationally agreed-upon vision of peace between Israel and its Arab neighbors. But no discussion of the BDS movement can be complete without a thorough and thoughtful analysis of the huge challenges facing the boycotters.
While videos that show boycotters protesting markets that sell Israeli fruits, Israeli owned restaurants chains, or other consumer products may lead to YouTube views, they don’t even begin to scratch the surface of Israel’s economic engine. Israel faces very real challenges, but an economic boycott led by the BDS movement is not one of them.