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Why Israel is called a start-up nation?

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Israel is the place in which more start-ups have been created in recent years than in all of Europe. With a population of around 8.5 million, there is one start-up per 1400 people, making Israel a leader in terms of the highest number of ventures per capita. Hence, it is not surprising that world giants such as Google, Intel, or Yahoo have opened their research centers in the Israeli Silicon Valley called Silicon Wadi. There are several interesting aspects behind Israel’s technological success, which I will try to describe down below.

At the end of the 1980s, when the country was slowly emerging from the economic crisis, there was a huge influx of Jewish immigrants from countries under the Soviet Union, the estimated number of coming people was 800,000. For comparison, it is as if 8 million new inhabitants have moved to Poland at this moment. The only way to generate jobs for that many people in such a depressed economy was to reinvent the country. The government created a venture capital program called Yozma, the main assumption was to attract foreign investors for the Israeli entrepreneurs. The premise of the program was that the government would carry the risk of investments giving the investors all the regards. The idea worked that well that between 1991 and 2000, venture capital investments increased from $58 million to $3.3 billion, making Yozma the backbone of the venture market.

Another main reason for Israel’s technological success is immigration. The whole country is based on people who came from different parts of the world and as we all know, every culture has its mentality even when it comes to topics related to business. The possibility of working in such a diverse environment makes Israel a perfect place for brainstorming debates where almost everybody has something completely new to add. Also, because of the multicultural population, lots of young people can communicate fluently in more than one or two languages.

Mandatory service in the military plays a very important role in the future thinking of young entrepreneurs. In Israel, even women are obligated to serve the country for at least two years. First of all, being a soldier at such a young age teaches making difficult and risky decisions that have a very big impact on the future professional life. Another advantage is surrounding with peers from different regions which gives a wide view of the needs of the country.

To summarizing, Israeli youth are aware of how their country was created, topics such as venture capital investments are nothing new for them. This also includes the ability to take risks and primarily, courage.





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