Israel’s Evolution: Value Creation in Statecraft

In the enterprise of statecraft, Israel’s journey from scrappiness to success tells a tale of triumph through value creation. Faced with ongoing threats, Israel has not only survived but thrived by embracing the principles of enterprise, marked by adaptability, innovation, and strategic execution. The historical trajectory of the Arab-Israeli conflict showcases how Israel’s application of business fundamentals facilitated its remarkable evolution.

The business ethos is simple: demonstrate profitability, expand market share, and maintain relevance. Oversight mechanisms such as boards, courts, and antitrust laws regulate the playing field, ensuring fair competition and peaceful coexistence among competing entities. While competition may lead to occasional skirmishes, businesses generally find ways to coexist. Consider Microsoft and Apple, Google and Bing, Uber and Lyft, or DoorDash and Grubhub–each striving for market dominance, yet acknowledging the value of mutual acceptance and thriving through customer loyalty and brand traction. 

This very paradigm was proposed by the UN in 1947 with the Partition Plan, envisioning the peaceful coexistence of two distinct peoples. The plan recognized the distinctiveness of Jewish and Arab populations, dividing the land accordingly—a compromise. The Jews accepted their market share, leading to the birth of the State of Israel. The Arabs, however, sought monopolization, desiring control over the entire market. Underestimating the Jews’ fierce, deep-rooted connection to the land—a loyalty brand spanning 3500 years—the Arabs attempted a hostile invasion. In this zero-sum game, they lost their stake, and Israel executed a massive takeover. The Arabs had gambled their share and lost the bet, a tragic lesson in the business of war. Despite their dramatic defeat, the region offered up possibilities for Palestinian redirection. Choosing not to pivot or craft a Plan B, the Palestinians resisted opportunities for Israeli citizenship, property ownership, healthcare and education. Instead, they clung to a distant vision, a hope for another takeover! Opting for refugee status in neighboring Arab countries, Palestinians consigned future generations to lives of squalor based on a little more than a dream. For decades, Palestinians languished, squandering opportunities and resources, waiting for a vision to materialize.

In contrast, Israel had an execution plan, demonstrating value, expanding influence, and maintaining relevance. The monumental 1967 war served as a turning point, transforming Israel from a “start-up nation” to a global powerhouse. In just six days, Israel defeated a unified Arab coalition, expanding its borders and asserting sovereignty over its biblical homeland. But this was not happenstance nor luck. During the previous two decades, while Arab partners poured resources into failing Palestinian ventures, Israel continued with the business of statehood, establishing democratic governance, and a formidable military. When opportunity arose, Israel executed a flawless operation. Solidifying its dominance in the region, Israel expanded into Judah, Samaria, Gaza, East Jerusalem, the Sinai Peninsula, and the Golan Heights. Driven to maximize opportunities Israel entered into high operational mode. Agriculture flourished, cities expanded and archaeological excavations unearthed its ancestral heritage.  

The Yom Kippur War of 1973 tested Israel’s market dominance once again, but Arab efforts failed, highlighting Israel’s control and ability to create barriers to entry. Egypt recognized market realities, maximized its leverage and negotiated for peace, leading to the 1977 Land for Peace agreement. Subsequent events, including the failed Oslo Accords, revealed Palestinian continued reluctance to renew its vision. Ultimately, the Palestinian enterprise stands as a cautionary tale of failed strategy and missed opportunities, while Israel’s strategic evolution exemplifies successful business principles applied to statecraft.

In the world of commerce, value creation reaps vast rewards. The ethos of Wall Street epitomizes this, and while often resulting in glaring wealth disparity, it persists as the core tenet of capitalism. The recent Tesla board/shareholder/court battle surrounding Elon Musk’s excessive payout contract underscores this philosophy. Similarly, Israel—who, after the US, Canada and China, has the most companies listed on Nasdaq —is a creator of value. Companies like Waze, Mobileye, and Wix have positioned Israel as a global leader in innovation. The failure of BDS movements to significantly impact Israel’s standing underscores the world’s recognition of the benefits derived from supporting successful enterprises. Despite controversies, Israel’s contributions to technology, innovation, and agriculture have garnered global recognition and ensured its continued support and isolation of its adversaries. Moreover, despite the current volatile public opinion against Israel no Arab country has cut relations with Israel and despite present-day tensions, the Saudi leadership have affirmed a continued interest in moving forward with the Abraham Accords.

Israel’s journey underscores the imperative of value creation in statecraft. Looking forward, Israel’s commitment to value creation is not just strategic but existential. As it navigates a tense geopolitical landscape, Israel’s resilience hinges on this. By fostering economic growth, technological advancement, and a military advantage, Israel safeguards its security and prosperity while contributing to global progress.