Kibbutzim are moving away from their origins as socialist agricultural collectives by joining Israel’s entrepreneurial high-tech world, The Wall Street Journal reported (Google link) Tuesday.
Kibbutz Sasa, near the border with Lebanon, was originally known for its orchards and dairy cows, but now its most successful endeavor is the cyber-security startup Sasa Software, which has grown to having 90 customers since its founding in 2012.
Sasa started an armored vehicle business in the 1980’s at a time when many kibbutzim were expanding into industrial operations. The kibbutz overextended itself as it sought to expand, causing it to go into heavy debt. The kibbutz’s fortunes changed in the early 2000’s when it got increased orders from the United States government to provide armor for vehicles deployed in Iraq. (See this video narrated by U.S. Ambassador to Israel Dan Shapiro.) The cyber-security business evolved from the software it developed to protect its sensitive orders.
Sasa’s business successes are allowing it to build 42 new apartments and send its members on annual foreign vacations. Its successful entrepreneurial focus is part of a larger trend.
Up until the 1990s, kibbutzim were true economic collectives where members lived in identical apartments or dormitories. Those who earned money outside of the kibbutz gave it to the group’s treasury for equal redistribution.
Those days are over. About 75% of the communities have abandoned economic collectivism in varying degrees. Those that remain collectives, including Sasa, are more flexible. Many have cut out expensive costs like the community dining room, and sought out new funding streams, like renting real estate and running hotels.
According to the Kibbutz Industries Association, the average Israeli kibbutz has between $2.7 million to $5.4 million to spend, and many are investing this money in high tech enterprises.
Other kibbutzim that were profiled in the article include Kibbutz Megiddo in northern Israel, which houses Agam Advanced Agronomy, an agricultural data analysis firm that receives data from satellites and drones. Three nearby kibbutzim have invested in Agam in the past year.
Kibbutz Revivim in the south is converting a chicken hatchery into a high-tech incubator. The plan is to host startups in exchange for a stake in those businesses. As kibbutz business manager David Ben Lulu told the Journal, “Now, instead of eggs it will be businesses that are hatched.”
[Photo: israeltourism / Flickr ]