How is it that Israel—a country of 7.1 million people, only sixty years old, surrounded by enemies, in a constant state of war since its founding, with no natural resources—produces more start-up companies than large, peaceful, and stable nations like Japan, China, India, Korea, Canada, and the United Kingdom?
- The “Economist” notes that Israel now has more high-tech start-ups and a larger venture capital industry per capita than any other country in the world. The success of Israel’s high-tech sector over the past two decades has attracted recent attention from business journalists and The Economist describes Start-up Nation as the most notable of a “growing pile” of books on the subject.
In their attempt to explain Israel’s success in this area, Senor and Singer discard “the argument from ethnic or religious exceptionalism, dismissing ‘unitary Jewishness’ or even individual talent as major reasons for Israel’s high-tech success” and analyze two major factors that, in the authors’ opinion, contribute most to Israel’s economic growth. Those factors are mandatory military service and immigration.
The authors argue that a major factor for Israel’s economic growth can be found in the culture of the Israel Defense Forces, in which service is mandatory for most young Israelis. The authors believe that IDF service provides potential entrepreneurs with the opportunities to develop a wide array of skills and contacts. They also believe that IDF service provides experience exerting responsibility in a relatively un-hierarchical environment where creativity and intelligence are highly valued. IDF soldiers “have minimal guidance from the top, and are expected to improvise, even if this means breaking some rules. If you’re a junior officer, you call your higher-ups by their first names, and if you see them doing something wrong, you say so.” Neither ranks nor ages matter much “when taxi drivers can command millionaires and 23-year-olds can train their uncles,” and “Israeli forces regularly vote to oust their unit leaders.”
The book also dwells at length on immigration and its role in Israel’s economic growth: “Immigrants are not averse to start from scratch. They are by definition risk-takers. A nation of immigrants is a nation of entrepreneurs. From survivors of the Holocaust to Soviet refuseniks through the Ethiopian Jews, the State of Israel never ceased to be a land of immigration: 9 out of 10 Jewish Israelis today are immigrants or descendants of immigrants the first or second generation. This specific demographic, causing fragmentation of community that still continues in the country, is nevertheless a great incentive to try their luck, to take risks because immigrants have nothing to lose 
- 1. “Saul Singer interview on Startup Camel Podcast about the challenges Israel is facing as a global innovation leader.”. Startup Camel. Retrieved 28 February 2015.
2. Glassman, James K. (November 23, 2009). “Where Tech Keeps Booming In Israel, a clustering of talent, research universities and venture capital..”. Wall Street Journal. Retrieved April 4, 2011.
5.”Start-up Nation: The Story of Israel’s Economic Miracle“. Council on Foreign Relations. Retrieved April 22, 2011.
6. Schumpeter (December 29, 2010). “Beyond the start-up nation: Israel has become a high-tech superpower over the past two decades. Can the good news last?“. The Economist. Retrieved April 22, 2011.
8. Maureen Farrell (November 10, 2009). “Israel As Incubatorr”. Forbes. Archived from the original on January 23, 2013. Retrieved April 4, 2011.
9. Steve Nadjari (April 11, 2009). “Israël, une nation d’entrepreneurs” (in French). inaglobal. Retrieved April 22, 2011.
Read more: “Start-up Nation“. Retrieved June14,2015
Israel Has Emerged as an R&D Alternative to Silicon Valley Entrepreneur. October 02, 2014
From Startup Nation To Scale-Up Nation, Israel Reached New Heights In 2014
- Economy of Israel
- Israeli inventions and discoveries
- Science and technology in Israel
- Silicon Wadi
- List of Israeli companies quoted on the Nasdaq
- List of multinationals with research and development centres in Israel
- Venture capital in Israel