Palestine ICT Sector
The Palestinian ICT sector currently employs 6000 people and makes up almost 7% of its GDP. Therefore, Palestine can be commercially attractive for international IT companies, which are looking to develop, invest or award general IT contracts, since it can offer a low cost highly skilled labour, especially in Gaza, if compared to the average cost in UK or other Arab neighbouring countries. The time difference is only two hours between UK and Palestine. Data connections are very reliable. IT capabilities exist across a range of skills, from lower skilled call centres and data entry work, to higher skilled software development in a number of languages, including Arabic. Finally, skilled personnel requires no movement when it comes to delivery commitments and deadlines, therefore, it is risk free, if the political situation is taken into consideration.
Contracting Palestinian companies is also an opportunity to contribute to peace and help Palestine to reduce unemployment and curb poverty, as a matter of fact, the British Government pledged to increase ICT contracts in Palestine by 1% in order to assist in state building and to ensure that peace is not negotiated politically only but through business to business relations as well. Therefore, international companies can build their confidence by starting with low-risk and small contracts (products) that require short delivery time. Some of them are already developing software in Palestine today.
Doing business in Palestine makes good sense and is evident by the repeated contracts placed over a number of years by some major international IT companies.
1. Salaries are around 30 - 35% lower than Western or Eastern European levels. (Gaza salaries are lower than West Bank).
2. The employment base is very stable and staff turnover is very low.
3. Palestinian Universities produce approximately 2,500 new IT graduates each year.
4. Most new graduates have excellent competencies in software testing, quality assurance and mobile applications.
5. Palestine has two major call-centres and data entry companies that have over a 1000 multilingual employees. (For example, one data entry company in Gaza is ready to provide jobs for more than 150 Gazan women, if they can secure contracts).
6. English language skills are good and the Arabic accent is clear and easy to understand across the Arab world.
7. The time difference is only two hours if compared with Far Eastern countries, where English is a second language.
IT Services in Palestine
Most Palestinian IT companies are in software development. They have experience and competencies in developing mobile applications, in Arabic and other languages. There technical skills are good, and international IT companies such as, HP, Intel and Cisco are already contracting work in Palestine.
Examples of such companies:
• ASAL Technologies, one of the largest IT companies in the West Bank with 130 employees (www.asaltech.com);
• Exalt Technologies, of similar size, also with a range of international clients (www.exalt-tech.com);
• iConnect, a software development company specialising in Microsoft technology (www.iconnecttec.com);
• Al Tareq Systems in Gaza, software developers for local and international companies (www.altariq.ps).
• ProGineer Technologies in the West Bank has 45 engineers (www.progineer.net).
1. Reach (www.reach.ps), has built a successful call centre with around 900 employees in Ramallah and Bethlehem. This can be expanded easily to include Gaza and other major West Bank Cities.
Competing with 1200 centres worldwide, Reach was awarded in 2011 a Gold Medal for Best Outsourcing Partnership Category.
2. Transcend Support (www.transcendsupport.com), employs 50 people and has the capacity for expansion.
Palestinian companies such as Unit One in Gaza and Reach in the West Bank are experienced in data entry and have been contracted by local and international clients from USA and Netherland.
IT and Applications Support
Palestinian companies are able to take on IT and applications support, and can offer low-cost support centres with English and Arabic language skills.
Some questions and answers?
1. Are these services reliable?
Palestinian IT companies have been delivering services reliably to international clients for a number of years with many winning repeated contracts. Some companies offshored their contracts to Palestine to benefit from the competence and the competitive cost. These companies include Axsos from Germany, Harri (harri.com) and iConnect from USA.
2. How reliable is the data link?
Palestine has a high speed fixed line broadband network that is accessible to almost all businesses. Moreover, all Palestinian IT Companies, Support Centres and Call Centres have reliable Wi-Fi networks.
3. What about power (electricity)?
Power supply is continuous and reliable in the West Bank. Some businesses in Palestine already have reliable backup diesel generators. In Gaza, businesses depend mainly on diesel power generators or solar systems to overcome shortages in electricity supply. They are also enabling working from home using high capacity UPS’s to enable reliable supply of electricity.
4. What happens when there’s another conflict in Gaza?
One important safeguard will be to work with companies that can surge capacity between Gaza and the West Bank. Many companies now have branches in Gaza and West Bank especially after the Gaza conflict in the summer of 2014, where businesses in Gaza were forced to put in place plans precisely these sorts of arrangements.
5. How do I contract with a Palestinian IT company?
British companies could work with Palestinian IT providers directly or indirectly or through their sub- contractors. The Commercial Trade Representative at Palestine Mission to UK and the British Consulate in Jerusalem will help identify suitable Palestinian providers.
6. What is the legal basis for contracts with Palestinian IT providers?
We would expect contracts to be under British Law.
7. What happens if the contract goes wrong?
With a contract under British law, an action could be taken in British courts. Enforcement of foreign judgements by the Palestinian Authority is legally binding and can be provided, but there has not been any significant precedent in the past.
8. What is the British Government doing to help?
The UK’s Department for International Development (DFID) is implementing a £19.3m ‘Palestinian Market Development Program’ (PMDP) to improve the competitiveness of the Palestinian private sector. Of interest to the IT sector, the PMDP has (i) conducted an in-depth analysis of the IT sector; (ii) facilitated the launch of a working group to develop the capacity of IT engineers and increase their access to markets and (iii) worked with the companies that are members to Palestinian Information Technology Association (PITA) to improve their access to investment opportunities and information. In Gaza, PMDP promotes IT start-ups, supports entrepreneurs’ participation at local/international trade fairs and provides grants to businesses that experienced damage following the conflict in summer 2014.
9. Are there other governments supporting business development in Palestine? Can I benefit?
Most diplomatic missions in Palestine and Israel work on economic development in the West Bank and Gaza and in particular, the IT sector. The US, German, Dutch, Estonian and French governments are very active in this sector. For example USAID works in a similar manner as the UK’s DFID on matchmaking between Palestinian and foreign companies, and providing technical and financial support.
10. Are there other British companies or international companies working in Palestine?
There are a number of companies, which have been working in Palestine for many years. These companies include HSBC, British Gas, Cisco, HP, Intel and Ericsson.
If you require any further details please contact Majdi Haj Khalil, Commercial Trade Representative to Palestine in UK on Majdi.email@example.com Palestine Mission, 5 Galena Road, Hammersmith W6 0LT, Tel (+44) 20-8563 0008 Fax (+44) 20 8563 0058