Over the past 60+ years, Israel has emerged as an economic powerhouse despite all odds. With only 7.1 million people, no natural resources, and surrounded by enemies and constant threats, it has somehow managed to attract nearly $2 billion in venture capital. It produces more start-up companies than large countries like Japan, India, Korea, and the United Kingdom, and has more companies on the NASDAQ than any country other the United States. Given its range of challenges, how can this be?
In their book, Start-up Nation: The Story of Israel’s Economic Miracle, Dan Senor and Saul Singer set out to explore the question. Indeed, as countries across the world struggle to develop the human, cultural, and institutional capital necessary for a thriving economy, Israeli society appears to cultivate these features with ease.
What might the rest of us learn from such an example? “The West needs innovation,” the authors write. “Israel’s got it. Understanding where this entrepreneurial energy comes from, where it’s going, how to sustain it, and how other countries can learn from the quintessential start-up nation is a critical task for our times.”
The lessons are many, and throughout their book, Senor and Singer outline a host of competing theories and hypotheses. But of all the potential drivers, I was struck most by the role the nation’s military plays in cultivating Israeli culture and bolstering its unique ethos of innovation and entrepreneurship. As peace and prosperity have largely prevailed throughout much of the West (compared to most of human history), what “built-in” lessons of human existence might now need more of our attention? (more…)