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Last Updated: Monday, 27 March 2006, 12:16 GMT 13:16 UK
Entrepreneurs at home in Israel
By Jackson Hewett
BBC World, Middle East Business Report, in Israel

Eli Reifman, Israeli entrepreneur and DJ
Eli Reifman says young Israelis are becoming more entrepreneurial

Everyone's heard of mega-rich DJ's.

But most patrons at Tel Aviv's Abraxas nightclub would be unaware that the DJ spinning funk and soul classics is one of the country's richest men.

Eli Reifman may not look any different from the hip young things at the bar but by just 35 he's created and floated eight hi-tech companies worth a combined $500m.

He sleeps only three hours a night.

To wind down from his 80 hour week, he plays until six in the morning every Friday at Abraxas.

Not that he needs the money, especially now Israel's tech sector is rebounding from the slump caused by the crash of the Nasdaq in 2002.

After coming out of the military, setting up a 'start-up' was the easiest, most normal thing for me to do
Eli Reifman, businessman and DJ

"2005 was a kind of bottom-out year," he says.

"Now turnover is growing back, companies are re-hiring, announcing growth all over the place.

"It very much feels like we're on our way back".

Hi-tech phenomenon

Hi-tech in Israel is something of a phenomenon.

The country is the second highest recipient of venture capital funding after the US, and ranks second in the world for new company start-ups.

Rabbi Yehuda Azrad, who runs soup kitchens in Jerusalem
Rabbi Azrad says governments have got their priorities wrong

Reifman says that Israel's highly organised military service, with its strong focus on research and development, helps incubate entrepreneurs at a young age.

"I was 18 running a team of 60 developers doing complex real-time simulators for weaponry. After coming out of the military, setting up a 'start-up' was the easiest most normal thing for me to do"

Reifman now sees three to four other Israeli companies every day keen to emulate his success in listing his companies on London stock market.

Israel's Silicon Valley may just be 50 kilometres from Jerusalem, but the shiny glass offices are a world away from the capital's impoverished neighbourhoods.

Soup kitchens

At the Carme Ha'ir soup kitchen, 500 patrons a day take advantage of the free meals provided by Rabbi Yehuda Azrad.

He's seeing more and more people looking for charity after the previous government slashed welfare payments, in a bid to reduce state debt and create a more "business friendly" environment.

"In the last few years the situation in this country has become worse and worse," he says.

A woman having a meal in a Jerusalem soup kitchen
Life is tough for many people living in Jerusalem

"The government focused on the economy - it's not thinking about these people here. But the government is supposed to think about these people. If you ignore them you cannot have a successful economy."

Jerusalem's economy stagnated during the wave of bombing attacks during the second Palestinian intifada that began in 2000.

Many businesses which relied on foreign tourists collapsed. Confidence was low particularly amongst small and medium sized business - the main engine of job creation in Israel.

But a visit to the busy offices of the Jerusalem Business Development Centre suggest things are starting to pick up.

It receives 250 applications a month from entrepreneurs looking for help to start a business or expand existing ones.

Fear receding

During the worst years of the intifada, they received less than half that.

"The city was oppressed." says director Uri Scharf.

Uri Scharf, director of the Jerusalem Business Development Centre
This is a time to open and develop business, a time for growth
Uri Scharf, Jerusalem Business Development Centre

"People were afraid. They thought it was a dangerous thing to start a business when the economy was collapsing and people were afraid to go to the centre of town.

"Now this is over - and we hope that it will continue - and this is a time to open and develop business, a time for growth".

There is an air of confidence amongst Israel's business community again. Firms are hiring again, the economy is getting stronger and tourists are coming back.

Companies feel they can start planning for the future now that the economy is on firmer ground.

But as they head to the polls, corporate Israel knows that politics is one variable that's always difficult to predict.

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