In downtown Ramallah, West Bank, five programmers at the Palestine Information and Communications Technology Incubator (PICTI) are forging a new future for the Palestinian IT industry through a unique collaboration with US-based tech giant Microsoft. The partnership between Microsoft’s Innovation Labs (or iLabs) in Tel Aviv, Israel, and USAID’s Enterprise Development and Investment Promotion project (managed by CARANA) led to a one-year outsourcing pilot, new iLabs products and the evolution of a long-term relationship—as well as a model for private sector alliances between Israeli and Palestinian firms.

Since 2009, the PICTI-based team has developed three new products for iLabs to be marketed globally: Mixer, which links users’ online profiles (e.g., Facebook) with their registered Bluetooth devices to recognize them when they enter a room; Ark, which gathers online information about movies and television shows to make personalized recommendations, including an active learning component that adapts to user likes and dislikes; and HomeVideoX, which applies face-recognition capability to videos.

Microsoft recently spoke with PICTI about creating another five-person team in Ramallah to work on Bing Mobile applications. Ultimately, the PICTI team hopes to form an independent Microsoft research center in Palestine. The collaboration has exposed Palestinian IT professionals to new technologies, helping the industry developing a more qualified labor force and demonstrating Palestinians’ ability to work with leading global technology firms. Team members have also become an in-house resource for PICTI, helping the incubator evaluate new projects and coach future entrepreneurs.

The collaboration leverages the unique situation in the West Bank—including proximity to Israel’s leading IT industry and the willingness of both parties to set aside political differences for business success. The Microsoft initiative and similar projects with other leading IT innovators such as Cisco and Salesforce.com are fostering an important new Palestinian industry.

“I see the future of the IT sector in this vital project with Microsoft which proves that Palestinians have huge talent, skill and expertise not only in the deployment of IT services but also in the research and Development field,” said PICTI’s chairman, Hassan Kassem. “This is the real path for development in Palestine.”

This post was originally published in July 2011 by Carana Corporation.