Turning Startup Nation into Impact Nation 

Speech by Sir Ronald Cohen to the World Zionist Organization Herzl Social Entrepreneurship Summit. Basel, September 2022. 

TRANSCRIPT:

You must all be exhausted! You've heard so much!

I want to start by saluting each and every one of you who has come here to celebrate not just the 125th anniversary of Israel but (also) its future over the next 125 years. 

I have to congratulate every speaker starting with Marie and Levi and going through every single speaker who has contributed to our discussions today —on the very deep understanding which has been achieved about what impact holds for the future of Israel.

I've read Altneuland. And I've read The Jewish State. In fact before I came here I was holding on the terrace of our home in Tel Aviv a copy of the first Hebrew edition Hebrew edition of 'The Jewish State' which appeared in 1896 a year before it was discussed in this very city 

The huge progress that we have made as many speakers have said is nothing short of miraculous. 

I used to say that venture capital and entrepreneurship - particularly tech entrepreneurship - is the art of the impossible. 

Well, Israel has cultivated this art unbelievably well.

51 years after the Congress, as we've heard, the State of Israel was created.

And today, it's only 3 years younger than I am!

And how much has been achieved in my lifetime 

It was unthinkable that Israel by now could be among the top 20 countries in the world in terms of GDP per capita

One of the top countries in the world in terms of its representation  on American stock exchanges: 90 Israeli companies versus 110 for Canada and 261 for China 

And we see the creation of billionaires - Israel has the second highest rate, per capita, of billionaires of every economy in the world. 

And yet we see these advancements in our economic position creating huge challenges for the future of the country. 

Because the unevenness of the prosperity that has been created divides our different tribes 

Our secular tribe is divided within itself between the periphery and the center of the country 

Ultra Orthodox citizens are living in poverty. 21% of Israelis live under the poverty line.

And our Arab citizens are similarly left behind.

The prosperity has created divisions in the country in terms of wellbeing whether it be in the area of employment or in the area of health or in the area of education. 

Differences that create anger and frustration - and a sense of injustice that threaten the cohesion of our society. And question the effectiveness of its political system. 

And so when we look at Herzl's vision. Ae see that we have achieved the first part of Herzl's vision by creating a country capable of defending itself (against all odds).

And an industry capable of sustaining rising prosperity 

The second part of his vision - the societal part - is still to be achieved

And I want to draw a parallel between Herzl's time and today 

Why did Herzl emphasize technology?

Because he lived at a time when within a period of 25 years you had the invention of electricity, of the telephone, of the radar, of the automobile, and of the airplane.   

And today, the changes that are occurring in the world have played to Israel's strengths.

When I was involved, in 1993, in creating the first institutional fund in Israel - Apex Leumi (Bank Leumi interestingly was the bank that Herzl founded!) ... It was hard to believe that technology could really be as big as it has become. 

Can you believe that we needed a guarantee from the US government that investors wouldn't lose their money? In order to bring big pension funds and insurance companies to invest in Israel?

And where are we today only 30 years' later?

More than $10BN per year is being invested in Israel. Two-thirds of which comes from international investors. 

And so what's happening with technology happened in Herzl's day. And he had the foresight to see that the brainpower in Israel, the entrepreneurship, the innovation, the chutzpah. Perhaps the chutzpah wasn't so visible at the time when Jews were powerless and living in ghettos with no rights, no justice, and no honor. But the chutzpah can be seen today! There's no doubt about that. 

And that combination today is what gives Israel the opportunity to achieve much of what we have heard today.

Because if we look ahead and we say 'how are we going to judge Israel's success over the next 125 years?’

The answer has to be that we have to build on what we have already achieved in industry and on the military front.  But we have to close the gaps in economic well being. We have to unite our different tribes with a sense of shared values which were so crucial in creating the State. 

Which motivated people to sacrifice themselves in order to set it up. And today, Israel is losing that sense of cohesion

The inequalities are pitting our different tribes one against the other making them feel unfairly treated or even exploited by the other tribes. 

So we have to reduce the gaps in economic position.We have to unite the tribes 

And we have to find a solution to our conflict with our Palestinian neighbors

I have devoted 20 years now to working on the Israeli-Palestinian conflict. I have an office in Ramallah to which I go very frequently. I speak with Palestinian business people and political figures. This conflict can and must be solved 

People said that the Irish conflict could never be solved 

Well, we see that huge progress has been made in doing so.

At the end of the day, if we do not help our Palestinian neighbors to build proper lives for themselves. To have the motivation to work hard for their children's future. Then we will not shift them to looking to the future instead of dealing with the past.

And so if we think of these three objectives - of those that are going to spell the success of Israel over the next 125 years.

How does Israel, in the changing world we live in today, achieve that?

Well as I was saying the world is moving in the direction of Israel's strengths. Impact is really a change in our economic system - as Alene said and as others have said. Koby and Ernst said the same thing 

If we look at what's happening:  capitalism is creating the environmental challenges and the social challenges which we face 

For forty years governments have been talking to one another about solving our environmental challenges. And of course they haven't made any huge progress. Because it isn't governments that create environmental pollution It's companies!

And so what impact is doing now is to say 'look - a system - an economic system which is based only on the measurement of profit and risk cannot be sustained any longer'

We have to overthrow the tyranny of profit! And put impact by its side. To keep it firmly in its place 

We have to bring our economies to deliver solutions. Not to create and aggravate problems 

And the good news is that we're advancing fast in this direction.

The change in values which started with young people. 

And the big difference between this group and the group we saw at the first Congress is the average age of participants. I salute the younger generation of people who are here.

If we look at the ability today of a company to make money if it is creating negative impacts... it's virtually non-existent 

How many of us in this room would look at a deal where the entrepreneur says "I'm going to build a huge company but I'm going to pollute the hell out of the atmosphere and I'm going to be using child labor"?

Right!? It's over!

The change in values has lead investors to realize that this is full of implications for the profitability of their investments 

As we've heard $40TN of ESG money. And $2.5TN of impact investment.Are flowing now to achieve risk, return, and impact 

And this change is values is meeting with huge leaps in technology that are as significant as the invention of the microchip 

Artificial intelligence, machine learning, augmented reality. Huge computing power coming together with the genome and the life sciences generally. These transform our ability to deliver impact globally in ways humanity could never previously contemplate.

And Israel is a leader in doing that 

I see entrepreneurs - many of whom are represented in this room 

Some of whom I have backed. And I know so many of you in the audience.

Transforming through their entrepreneurship and innovation 

The worlds of education, of health, of FinTech, of clean energy, of water. 

Every area where negative impacts are being created becomes a target today for impact entrepreneurs.

And just as the Tech Revolution was led by the young generation so will the Impact Revolution be. 

And the third major force is the force of transparency on the impacts created by companies 

An effort I have been involved in at Harvard Business School for the past three years has published thousands of companies' environmental and social impacts in monetary terms.

And my belief is that within the next three to five years we are going to see companies in many parts of the world having to publish impact statements that show their revenues,  their costs, and their different impacts from their operations, from their products, from their employment, and from their supply chain. 

And if some of you are listening and feeling a bit skeptical, remember that the SEC has already put on the table mandatory publication of every environmental impact created by a company!

The organization responsible for financial accounting throughout the whole world (except for the United States) — the IFRS as it's called — has set up an International Sustainability Standards Board (ISSB) to standardize the measurement - to quantify measurement of both social and environmental impacts 

And the EU has already imposed impact transparency on investment vehicles forcing every investment manager that wants to sell its funds in this 500 million person market to comply with EU regulations on transparency.

And so the train has left the station! And this is the world that Israel is going to thrive in!

What Israel has achieved in technology in just 30 years it can do again but perhaps even faster in the world of impact.

And if we think about the Jewish people and their sense of mission. And what we have brought the world. 

Through the Bible. And the Ten Commandments. 

Once again we have the opportunity to do the same.

Israel cannot hope to become the most populous nation or the most powerful economy in the world 

But it can hope to be the country that makes the largest contribution in terms of its size to solving the vital problems the world faces today and which Israel faces together.

My daughter Tamara who is an impact entrepreneur is sitting here with her cofounder Yuval Samet. 

She was asked a year or two ago why she enjoys living in Israel having made aliyah. And she said: "Because it's a country that's writing its own history.”

And so let us write Israel's history as Impact Nation. We are the leaders of this Revolution!

And just as the 250 people who were in this city 125 years ago saw the achievement of their vision, I'm confident that we will once again turn Israel into Impact Nation.

Thank you!