Israel – a national hub of intense innovation
WHAT INSPIRED STARTUP NATION?
Israel has more startups than anywhere outside of Silicon Valley. It has two and a half times as much venture capital per capita as the US – 30 times as much as Europe. We realised it was a matter of culture and history, that there is a lesson about the nature of innovation.
Most people think of innovation as ideas – you can tell this because if you type the word innovation into Google you’ll get lots of pictures of light bulbs – but it’s really not the case. Other countries have the same patent density as Israel, but are not producing the same number of startups in comparison. Light bulbs are going off but they are not producing the startups.
Israel has two additional ingredients: a lot of drive and a willingness to take risks. If you don’t have these, your ideas won’t turn into startups.
HOW DID ISRAEL GET THESE INGREDIENTS?
Israel itself is a startup nation. It took a lot of drive, determination and willingness to take risks for Israel to exist. It is a country of immigrants. Immigrants are both driven to move from one country to another and risk takers. I don’t think it’s a coincidence that half the start-ups in Silicon Valley were started by immigrants.
You also get the multicultural element, which also leads to creativity. We also talk about the role of the military – which is not what you might think. It’s not about tech transfer. The main thing is cultural. Israelis get this third experience in life between school and work. You can’t fail, but you need to take risks to succeed.
THIS DOESN’T SOUND EASILY REPLICABLE?
Clearly there are different paths to innovation. Every country has their own path built on their own strengths. It’s not about copying Israel, but working with Israel. The who’s who of Silicon Valley tech are opening R&D centres there. Jeff Immelt, the CEO of General Motors, said on his last visit: “You guys are great at innovation, we are great at scaling up – bring us your innovations and we’ll help you scale them up.” Startups are great at innovation, on the other hand big companies have trouble with innovation.
But Israel is very US-centric, with roughly 80 per cent of foreign direct investment in these R&D centres American – where is Europe?
WHEN WILL ISRAEL GET A GOOGLE?
Israeli tech entrepreneurs are very self-critical. In researching the book they asked: “Where’s our Nokia?” Of course, now they don’t say that.
In Israel there was Nokia envy, while in Finland (home of Nokia) they had start-up envy. It’s ironic. Israel just needs to do more and better startups – that’s their competitive advantage. Along the way it will produce some big companies. After serial entrepreneurs have done a few startups some will have the knowledge and maturity to take it all the way.