Stef Wertheimer's tech road to Mideast peace

TEL AVIV, Israel--He's the richest man in Israel. And at 82, Stef Wertheimer is far from calling it quits. Two years after selling 80 percent of his Iscar Metalworking to Warren Buffett for $4 billion, Wertheimer has an idea on how to bring peace to a region scarred by decades of strife.

His idea: jobs.

More than two decades ago, Wertheimer built Tefen, an industrial park in an undeveloped and low-income region of the Galilee, offering employment both to Arabs and Jews. It worked out so well that he subsequently built three more industrial parks in Israel, as well as one in Turkey. The parks serve as incubators for manufacturing and export companies, which over the years, have spawned about 250 companies--one third of them in the high-technology field, according to Wertheimer.

At one point, Wertheimer was even ready to finance the construction of similar industrial parks in Jordan and the Gaza Strip. But those plans were sidelined indefinitely by the outbreak of the second intifada and the chill in Arab-Israeli relations.

Still, the way Wertheimer sees the future, it's only a matter of time before economics and self-interest ultimately trump ideological and religious differences, paving the way toward a final resolution between Israel and the Arabs. After receiving an award Sunday for his entrepreneurial work at an investment summit sponsored by Silicom Ventures, Wertheimer spoke with me in more detail about his ideas.

When you talk about start-ups and new technologies in Israel, one area that's receiving a lot of attention, obviously, is clean technology. I believe that you built a windmill at Tefen.
Wertheimer: I did. You have a good memory. Yes, I built the windmill 30 years ago in Tefen and I think it was the right thing to build at that time and I don't think that we did much with the solar or with windmills. Not much was done. I think we were too busy. Every few years they have a war.

You've been pushing this concept of building industrial parks. The basic idea is that economic prosperity will lead to coexistence between Arab and Jew and that will help end the conflict. But terrorism's not always related to unemployment. Isn't it also about things, which have no connection to unemployment, like anger or ideology?
Wertheimer: The GDP of states in our area which have no oil is $2,000 per man. In Europe and Israel, it is $20,000; that's a 10 to 1 difference. This difference of income will always create problems in the area. Whether there are religious aspects or not--it's not important. The economic difference is too big. It can only be overcome by helping young people to have the right type of jobs where they can be satisfied. In the Galilee, where I live and which has 10 percent to 20 percent of Israel's population, we have very little friction because most of the people have jobs now. So in a way, we overcome the problem in a positive way because Arabs in our area, which are half the people in the area, have been trained and find good jobs. It doesn't solve everything, but that's the way to do it.

Have you had conversations with political leaders in Jordan or Egypt about expanding industrial parks to the other side of the border? You once had been plans to build an industrial park in Aqaba and Gaza. Do they still share your point of view?
Wertheimer: They share the point of view, but I don't think that any Israelis can do it. It must be done either by Europe or by America.

A few years ago, you testified before the U.S. Congress where you made the case for a new Marshall Plan. Maybe the timing wasn't good as it came just before the war in Iraq. Are you still optimistic about building industrial parks in other countries of the Middle East?
Wertheimer: I've built a park in Turkey, and it's been very successful. The Turkish government now would like to have more parks. I think this is the solution. It happens slowly, although, unfortunately, not so far with the Palestinians. But it happened with Turkey, which is nearby and also a Muslim country.

You've been a major proponent of investing in big joint regional projects to build political ties between the nations in the region. But in the Middle East, you're talking about nations with varying degrees of wealth. Some have oil, others don't.
Wertheimer: With the areas which have no oil, the idea is to create industry and jobs. The oil areas have a big problem digesting the oil. There's too much money and the people don't know what to do with it. I'm finding all the time that we have more industries and more success stories which are not involved with oil.

So which comes first? The political breakthrough or the economic revolution? Specifically what will it take for the private sector, let's say in Palestinian territories and Israel's other neighbors to join the ranks of high-tech based 21st century economies like Israel's?
Wertheimer: To go to vocational school, to have universities. I'm not speaking only about high-tech, but about anything you can sell, which brings in money and gives more pride to the people who make it.

Do you have a particular favorite in clean technology?
Wertheimer: Yes, I have. I would like today to see solar energy, which could change the southern of part of the Negev from Israel. It also would help Arab countries (that) have no oil. It's a better approach to better energy or--at least a cheaper approach.