75217 January 2013 . Number 80 THE PALESTINIAN INFORMATION TECHNOLOGY ASSOCIATION OF COMPANIES (PITA): MOVING FORWARD ON ICT AND INNOVATION Ali H. Abukumail1 Introduction: The economy of the Palestinian territories, hampered by years of conflict, occupation, and insecurity remains dependent on foreign aid and the public sector remains the largest employer. Jobs are too few and manufacturing, agriculture, services, including tourism are in decline. As a recent Bank report noted “While the Palestinian Authority (PA) has had considerable success in building the institutions of a future state, it has made less relatively small as a sector, an increasing progress in developing a sustainable economic number of Palestinian firms are moving into base…the recent growth has largely been information and communications technology driven by donor aid. This situation is (ICT) sector. With a few incubators and firms unsustainable and aid levels have already that would not be out of place in Silicon Valley, begun to fall. Fora future Palestinian state to be the sector is “building a reputation for viable, it is necessary that a private sector led inexpensive, high-quality tech expertise�3. economy is able to generate the jobs needed by a rapidly growing population and the resources The IT Sector in the Palestinian Territories : A required by the government to provide white paper commissioned by the US services�2. multinational Cisco and published in July 20124, noted that the Palestinian IT sector grew In the midst of this bleak picture, however, from 0.8% of GDP in 2008 to 5% in 2010 and there are some brighter spots. Though still continues to grow. The Palestinian Information Technology Association of Companies (PITA) estimates that the sector has approximately 5000 employees with another additional 15,000 1 employed indirectly5. The sector has also seen This Quick Note was redacted by Ali H. Abukumail, Private Sector Development Specialist, The Middle East and North Africa Region, the World Bank, with inputs from the 3 PITA presentation at the World bank on January 24, 2013 Palestinian Information Technology Association of – quoting from the UK’s Guardian article by Phoebe Companies (PITA) team which visited the World Bank on Greenwood, “Palestinian tech startups offer hope to January 24, 2013. This Quick Note was cleared by Randa struggling economy� July 31, 2012. Akeel, Acting Sector Manager, Finance and Private Sector Development, Middle East and North Africa, The World 4 Bank. For more see http://csr.cisco.com/casestudy/commitment-for-palestine 5 For more see http://www.pita.ps/content/ict-sector- 2World Bank, 2012. Towards The Economic Sustainability of a Future Palestinian State: Promoting Private Sector Led Growth. profile, Washington DC, World Bank. a 64% increase in foreign business since 2009. founded in 1999 by a group of Palestinian Cisco itself has invested $15 Million in the entrepreneurs with the vision of creating a non- sector of which $5 million is for one of the first profit organization to advance the interests and venture Capital firms in the territory. The total positive societal impact of Palestine’s invested in the sector by outside parties is $78 Information and Communication Technology million over the past four years. (ICT) sector. As a study commissioned by the Palestinian The Palestinian Information Technology Information Technology Association of Association of Companies represents more than Companies (PITA) noted: “The IT industry is 100 major ICT companies in Palestine’s capable of sustaining multiple concurrent IT emerging technology and startup ecosystem. development projects at levels of quality, PITA is a driving force in advancing the ICT timeline and customer satisfaction as buyers sector’s interests, and a leading information would expect from a global IT outsourcing source about this sector in Palestine. services provider�6. PITA Mission, Vision and Strategic Role : There are some 400 IT companies in the PITA sees its mission as leading the ICT sector Palestinian territories and 50% of these towards an innovation-based economy. Its companies have partnerships outside Palestine. vision is that of a Palestinian nation nurturing Approximately 120 of them are exporting innovation and contributing to world services and products. Some of the major joint knowledge. Its strategic goals is the “emergence R&D projects with global players include of an open, secure cloud, the consumerization CISCO, IBM, Intel, HP & Microsoft, and Oracle. of IT, and ability to do business in a global, The sector exports globally, including to borderless environment, makes Palestine an Canada, Europe, the Arab countries, including ideal place to discover, innovate and disrupt the GCC, and the United States. Also of note is traditional thinking�. that there are growing linkages with ICT firms in Israel. PITA’s Strategic Pillars: The strategic Pillars focus on Policy, sector branding, company and The IT sector’s growth rate was estimated at 8% start-ups development, and Human capital and in 2009 and grew to 10% in 2010. That same partnerships: year it was estimated to have a generated $530 million in economic value added. It is expected • Policy: PITA drives policy issues on the that the sector will account for 10% of GDP in development and growth of the country’s the next few years, rising from the 5% of GDP ICT sector. Working in cooperation with in 2010. the region’s technology ecosystems including academia, research institutions, ICT Education in the Palestinian Territories: startups, businesses and angel and VC PITA estimates that there are some 8000 investors, PITA’s policy initiatives aim at students studying in the ICT sector in the serving their membership and the growing Palestinian territories. Thirteen universities Diaspora who are looking to connect and annually graduate some 2500 students of do business with the Palestinian hi-tech which, on average, 40% are women. However, sector. given the ongoing difficulties, only some 30- 40% of these graduates are able to find a job in • Sector Branding: PITA is the voice of the their field. ICT sector in the Palestinian territories and sees ICT is not just a sector but with the The Role of PITA in the ICT Sector and potential to be the driving force behind all Innovation: Based in Ramallah, PITA was parts of the economy, a movement for positive social change, a contributor to 6For more see http://www.pita.ps/content/ict-sector- education, and a means of placing Palestine profile, on the global economic stage. January 2013 · Number 80· 2 • Company and start-ups development : • Be part of Palestine’s IT industry PITA is part of the growing global startup branding initiative. movement and sees this as a community that has no boundaries, or language and • Assisting entrepreneurs to build cultural barriers. To this end, PITA has successful start-ups. programs in place to support the growth of the ICT economy and foster an open and • Mentoring and coaching of Palestinian participatory process to move the sector IT businesses and entrepreneurs forward. Conclusion: Despite multiple challenges in the • Human Capital and building on Business- investment climate, the Palestinian ICT sector Academic partnerships. PITA sees has managed to grow and integrate with Palestine’s greatest asset as its people and regional and international businesses. It is a fast strives to better align the country’s leading growing start-up sector, which heavily universities and technical schools with the contributes to the development of a knowledge growing ICT industry. It has programs in based economy in Palestine. The place aimed at aligning the world of entrepreneurship cycle of the sector is maturing academia with the current and future needs with the existence of excellence centers, of regional employers who are scaling-up incubators, VCs and equity funds. However, their businesses as new opportunities arise angel funding remains very scarce. in our region. PITA has developed a well-focused strategy The Palestinian Global IT Network: PITA has built on pillars of policy, branding, startups and been working to create a global support human development. The association managed network for the Palestinian IT industry. The over its thirteen years of operation to build a network will provide linkages and successful portfolio of initiative as well as a opportunities for Palestinian companies, solid network of public and private sector entrepreneurs, and IT professionals to develop stakeholders. PITA is building a global network and link with opportunities outside the to help place Palestine on the global IT map. boundaries of Palestine and the region. The Palestinian Global IT Network concept is built around engaging members of the Palestinian Diaspora and others and tapping into their resources, knowledge, and networks. The goal is to place Palestine on the global ICT map. The network’s aim is to provide professional and technical inputs to the implementation of the 3-year strategic plan for the development of the IT Industry in Palestine. This will cover the following areas: • Professional guidance and advice on programs drafted under the strategy. • Act as ambassadors and representatives of the Palestinian IT industry • Establish linkages between Palestinian IT businesses and professionals and the rest of the world. January 2013 · Number 80· 3