Monday, November 21, 2005

Global E-Commerce

Israel is currently instituting sweeping telecommunications reform, in hopes of reducing high costs for T-1 dedicated lines and regulatory obstacles to the supply of broadband services. Officials expect reform plans to be implemented this year.

Israel has induced U.S. companies such as Intel, Cisco, and Lucent to set up offices there. And the business relationship goes both ways: CheckPoint Software, which provides secure communications across the Internet, is one of Israel's most successful high-tech companies and has an office in Silicon Valley. "Israel is culturally very open to U.S. businesses," says Giga's Bartels.

The country's biggest drawbacks are its small market size and rocky geopolitical landscape. Its gross domestic product is a paltry $100 billion--a drop in the bucket compared to that of the U.S., which has a GDP of $8.5 trillion. And e-commerce transactions in Israel totaled only $17 million last year.

Israel's adverse relationship with neighboring Arab countries and internal political instability continue to plague international trade. The perception of danger in Israel sometimes colors the business decisions of foreign companies by making them wary of building relationships there. In an ironic twist, Israel's high-tech community has also produced infamous computer hackers, thus spawning concerns over e-commerce security.

Cultural Tip: It is customary to shake hands upon greeting someone, but most ultra-Orthodox and Hasidic men do not shake hands with women, for religious reasons.


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