"We have a fairly simply selection process. Everyone working with me worked with me for years in the government in one way or another. I think that I was known among my supporters, and also among my opponents, as someone with a clear agenda and a defined set of political values, for better or for worse. The simple test we use in everything we do is whether it's a type of business that I would have been involved in as prime minister, and that I would have been willing to make an official announcement about, that I would have wanted to be associated with, and that I would have wanted to see happen. If it's not one of those, regardless of whether it's bad or illegal or whatever, it's not the kind of business we're looking for."
That is how former Canadian prime minister Stephen Harper, 60, sets his moral bounds in doing business, among other things with Chinese concerns, he told "Globes" on his most recent visit to Israel, shortly after being appointed president of the advisory committee of Awz Ventures. The venture capital fund, founded by managing partner Yaron Ashkenazi, specializes in investments in Israeli security and intelligence startups, and manages $100 million in assets. The fund has invested in 12 companies to date.
Harper, a rightwing conservative, served three consecutive terms as prime minister from 2006 until 2015, when he was defeated in the elections by Justin Trudeau. He is an evangelist Christian and an enthusiastic supporter of Israel, which he has visited many times. He was hosted by Prime Minister Benjamin Netanyahu and his wife, and spoke in the Knesset plenum, where he said, "It is, thus, a Canadian tradition to stand for what is principled and just, regardless of whether it is convenient or popular. But, I would argue, support today for the Jewish state of Israel is more than a moral imperative it is also of strategic importance, also a matter of our own, long-term interests… For too many nations, it is still easier to scapegoat Israel than to emulate your success."
Harper, who holds no official position in Canadian politics, is now working on his own behalf. He founded Harper & Associates, a consultant company, which puts Harper's network of connection at the disposal of its clients. The company assists corporations operating in an environment involving political or geopolitical risk with access to markets and development of government connections. At the same time, like other former prime ministers and presidents with whom we are familiar, he is still involved in politics. He heads an organization, "International Democratic Union," an alliance of center-right parties - a rightwing conservative version of the Socialist International, and helps fellow conservative parties get elected in their countries. The Likud has been a member of this organization for the past year. He told "Globes," however, that he was unwilling to talk about politics.
Although Harper is engaged in private business, about which he spoke during an interview in Ramat Hahayal in Tel Aviv, his spirit still haunts Canadian politics. A little less than a year ago, when rumors were circulating about his return to politics, Harper was quoted as saying, "I can no longer stand by when this child is wrecking the country," referring to Trudeau, who was 44 when he became prime minister, but who looks much younger.
This slight bitterness also appeared in the interview when he spoke about the need of young entrepreneurs for a guiding hand. "This isn't the only thing that we at Harper & Associates do, but many of our clients are investment funds, some of them in technology, and the story here in Israel is different. Without meaning to insult anyone, most of the time when you meet smart 20-30 year-olds, you know that they have a lot to learn in life. This is part of the reason that they hire us. They need the broad perspective. In our case, however, when we deal with experienced Israelis who are veterans of the security forces, they are mature and professional, and we work with them in order to produce business opportunities, so this is definitely an exciting sector."
"I want to continue what I did in government"
The interest that Harper continues to show in global politics after his retirement was also shown by the book he wrote, entitled, "Right Here, Right Now: Politics and Leadership in the Age of Disruption" - a pun on the word "right." The book analyzes the reasons for the rise of populism, headed by the election of Donald Trump as US president and the UK referendum vote in favor of Brexit. The book, which Harper himself describes as " a manual for conservative statecraft in a populist age," is described by Canadian weekly "Maclean's" as a "prescription to US Republicans for renovating the Republican Party’s policy book to address the forces - economic dislocation, fears about illegal immigration - that gave rise to Donald Trump. Harper proposes giving a response to the forces that put Trump in power - employment insecurity and fear of immigration… Harper is urging the Republican leadership to find ways to hold onto those swing voters that don’t depend on having a megalomaniac TV star as the party’s presidential nominee."
"Globes": How do you analyze today the array of forces operating in the general geopolitical arena, and in the technology sector?
Harper: "The book I recently wrote does just that. We live at a time that is called an age of disruption, whether it's technological disruption, like we're doing here in the AWZ fund, broader political disruption, or a change in social values. There's a lot to be worried about, but I really believe that we're living in the best time in history, and we're living in Canada and Israel, which are two of the best places to live in. I still think that there's every reason to believe that despite the pressure, risks, and dangers to our children, they have a lot more opportunities and a much better life than ours - that they're already living pretty well.
"How does this affect technology? Many people don't know it, but a very long time ago, I was a programmer. My formal education is as an economist, but I taught myself programming. One of the subjects that arises in conversation about technology is all of the forecasts of the terrible things liable to happen, including millions of people losing their jobs. I've spent a lot of time learning the history of economics and economic thought. From the dawn of the capitalist system in the late 18th century, in every generation, some of the best minds predicted that the next wave of technology would destroy humanity, and everyone would lose their jobs. Incidentally, one of these predictions was by John Maynard Keynes, who initially believed that the Great Depression was a result of technological change, and I can continue this list. Everyone made this claim at some point.
"My anecdotal proof for all of the people worried about the loss of jobs - look at all economic sectors, all the places in the world where technological innovation is in the vanguard - these are places where new jobs are being created, and almost inevitably, a huge shortage of workers is created in all of these places. Wherever there is no innovation, or there is resistance to innovation, there is enormous unemployment. All the options are available to us, in work, but also in quality of life. All of them are on the side of technological innovation. The future lies there, not only of trade, but also of the diplomatic and military forces.
"At the same time, is there a scenario in which technology can spread into undesirable areas? Definitely. But there's no reason why this has to happen. There's no reason not to believe that if we behave even half reasonably, the next wave of technology will not only make our lives better, but will also create millions of new jobs that didn't exist before. Incidentally, Warren Buffett said that just because technology is commercially successful didn't mean that somebody would make a lot of money from it. The reason that I combined with those smart people from AWZ is not just that we want to jump on the bandwagon, but so that investors can also put money in the bank."
"The world is likely to split into two"
Harper joined the fund last June, and is president of its advisory committee. He explains how this fits in with his other business: "After I left the Canadian parliament in 2016, I and a group of my staff tried to think what our next step should be, and what things we'd like to do. I was lucky that many of the most senior people who worked with me joined me in this venture. What we decided that we wanted to do was to combine our experience and global network of connections in order to assist our clients - not necessary Canadians - to find profitable ventures, to tell the truth, that would be consistent with some of the things that I tried to do in the government.
"From all of the clients and activity that I'm involved in, there may be nothing better than AWZ, because it combines several of my fields of interest. First of all, the closeness of our government to Israel during my term in office, secondly our interest in technology and innovation - we invested a lot of time in promoting Canadian programs, and in addition, in trade, part of my mission in the job was to expand the network of Canadian trade. When I became prime minister, Canada had only five trade agreements, one of them with Israel, and when I left the job, there were 51 agreements. The agreement with Israel, however, was out of date, and included only a narrow range of goods, so we updated this agreement.
"One of the things that disturbed me as prime minister was that the flow of trade, services, and investments between Canada and Israel was still small, despite the characteristics of the Israeli economy, especially its technological leadership, and despite the characteristics of the Canadian economy and the fact that both of them are advanced, there was a large Jewish community in both of them, and trade agreements. We therefore made the agreement more modern in order to redress the situation. But we were, of course, also looking for opportunities to really increase trade and business activity between us, and especially to take advantage of Israel's technological progress."
When was the connection between you made?
"We met a year ago. All of our friends knew that this was the type of work that we wanted to do. We also had a long list of mutual friends from Yaron's work at Yad Vashem (Ashkenazi was executive director of the Canadian Society for Yad Vashem, U.B.). It was (AWZ founding partner and chairman, U.B.) Edward Sonshine who introduced us, and we talked about how to work together. I want to see Israeli technology come to Canada, and I want to see Canadians taking advantage of the profit opportunities in this area. We also want to find opportunities in Israel to grow and enter new markets in North America. By the way, I have to say that during my term as prime minister, I encouraged greater military cooperation with Israel, probably for foreign policy reasons, but this built many of these bridges. Cooperative efforts were more on the intelligence side, and of course teams that exchanged information and best practice work methods."
Technological matters are now at the base and heart of the trade war between the US and China. What is your opinion about the global array of forces emerging before our eyes in general, and the relations between China and the West?
"This is a political question, and I don't really want to delve into it, but let's put it this way: the best result that can come from all of these things is a global system of markets that are really integrated with each other, and reciprocal fertilization throughout the world. If we leave the special personalities, the policy, and governments off to one side, the reality is that this is an area in which it is likely that a process of splitting into two will take place on a certain level.
"We're talking about the security field, which is an interest of the Chinese sphere and the US sphere, but we're free and democratic societies, and we know how worried the public is about violations of privacy and misuse of data. Even in the context of the existing commercial technologies, China is a surveillance country, and it's not that it isn't offering commercial products - but every procurement measure by its technology sector is in the direction of surveillance in the context of the interest of state security.
"There are therefore in effect two models. We in the fund are learning from the army, from intelligence, and from national security, and are adapting things to corporate commercial purposes. These are purely defensive purposes, it must be emphasized, never aggressive, completely legal and part of what we regard as normal protection of privacy. These are two different models, and it's very hard to combine them. This is something that the fund is very aware of when it selects investors and partners. We want to make sure that everything developed through the fund is done within the framework of a free democratic society and in the framework of commercial use. This is the interest of free democratic societies like Canada and Israel.
"Today, my involvement in business is to look for profitable opportunities, but we're doing this in the context of promoting the same values that I had when I was prime minister. We're not interested in values of a surveillance state."
Leading figures in the Israeli technology industry are talking about the consequences of doing business with China. They usually say that the companies involved are private, and can do what they want with their money, and that only financial investments are involved, not strategic investments.
"Harper & Associates is a small company, but has global activity. We do business around the world, and we also do business with China, but we're doing this carefully. It's important to have economic and commercial ties with China; that's good for the world in the long term. So business connections are involved, but these are for purposes that are consistent with the broad national security interest.
There are therefore types of business that I'll do in China with certain players, and there are some players with which I won't do business. We don't do business involving cybersecurity with China. The only large opportunity of Harper & Associates outside Canada and the US is in Israel. There are also good opportunities in India. I don't think that Israel really knows the global potential of its technology sector, and this is one of our goals."
How do you see this full potential?
"I'm not here in order to give Israel advice, but there are very few important international Israeli technology companies. Through AWZ, we therefore want to build an important global Israeli technology fund that will in time lead to a wider range of commercial results for technology companies."
$100 million of Israeli security solutions: Introducing the fund that Harper will advise
Ashkenazi, a former Israel Security Agency security operative, founded Awz Ventures in Canada. The fund specializes in investments in Israeli security startups, and manages over $100 million through two funds that it has launched. Another founder is veteran Canadian businessperson and REIT funds pioneer Edward Sonshine, who head RioCan, a REIT fund whose activity is worth C$13 billion.
AWZ has invested in 12 Israeli companies, and reports that it is conducting due diligence for five more companies. Ashkenazi says that the company's spheres of interest are a homeland security triangle whose sides consist of cybersecurity, intelligence, and physical intelligence, with a focus on artificial intelligence technologies.
Among other things, the fund invested in Pcysys, an automated penetration testing platform, which has raised $11 million; MinerEye, whose $3 million seed fund was led by AWZ; NanoLock Security, in which AWZ invested $7.5 million; Octopus, in which AWZ invested over $5 million; Cervello, in which AWZ invested $4.5 million together with Israeli fund North First Ventures; and SIGA, in which AWZ invested $4.5 million. The fund also invested in several companies at the seed stage: $2 million in Assac, $2.5 million in Valire, and $2.5 million in EnsureDR.
AWZ says that leadership and advisors include "former homeland security ministers and former senior executives from Canadian and Israeli intelligence and security agencies, as well as global business and venture capital experts." Ashkenazi said that the fund's advisory team has actually convened twice to identify and define niches in which it will operate. He adds that the advisory has aggregate experience of over 100 security deals. "They know where the needs are, because they protected gaps in the level of national security, and it is known that the civil security sector follows the lead of the national security sector," Ashkenazi explains.
Residence: Calgary in the Canadian province of Alberta
Family status: Married with two children
Positions: CEO of the Harper & Associates consultancy company, president of the Awz Ventures advisory committee, chairman of the International Democratic Union," an alliance of center-right parties
Previous positions: Canadian prime minister (2006-2015) representing the Conservative Party
Education: MA in economics from the University of Calgary
Published by Globes, Israel business news - en.globes.co.il - on September 10, 2019
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