Friday, June 27, 2014

Startup Nation: Story of Israel’s Entrepreneurial and Innovative Spirit

This post is contributed by Vivek Madathil

Startup Nation” by Dan Senor and Paul Singer is an incredible book. It is very well written and explains the story of Israel’s success as a very entrepreneurial and innovative nation. The author traces the key factors contributing to the success of Israel as a nation that embraces culture of innovation.

start-up nation lazyandsmart - Entrepreneurship innovation
It is very interesting to read that even in 2008, when the world was hit by global recession, Israel’s entrepreneurial economy was hardly hit. In 2006, when Israel entered into a war with Syria, investments to country’s start-up economy actual boomed!. More global companies of Israel are listed in NASDAQ than India or China. More global capital is going to Israel on a per capita basis than United States.

The author explains many factors that leads to this success. While all the factors are difficult to obtain mention in a short blog, certain factors definitely demands detailed mention.

As a national policy, Israel mandates military service to its citizens. Hence, very early in their age, the youngsters get leadership training the hard way – serving in the battlefields, fighting within constraints for survival. This builds risk taking, entrepreneurial skills required for survival as a small firm in a competing economy. Youngsters learn to innovate within the constraints for their survival. Rarely, other nations build such innovative and entrepreneurial spirit in their citizens. Israel’s industry absorbs citizens who finish the military training and revector them to leadership or managerial roles in entrepreneurial ventures.

The nation’s policy of immigration is poised towards attracting talent required to seed new entrepreneurial ventures.  

Israel’s culture and values breed innovation and entrepreneurial spirit. The kids are encouraged to question rather than oblige to everything. For an entrepreneur, this is a mandatory skill. People, who are restless and unsatisfied with the status-quo, leave their cushy jobs and start entrepreneurial ventures. Every technology is tinkered, played with and customized by the kids during their growing up years. This breeds the culture of innovation within the younger generation.

Another important aspect is the ability to take quick decision and plunge into the world of entrepreneurial journey overnight. This is a very important skill for entrepreneur. While many might find this skill as irrational, the ability to spot opportunities and quickly turn into action to convert an innovative idea to a viable business opportunity is very critical.
It is very interesting to notice that the Governmental policies were not suited to encourage innovation in Israel’s initial years. However, the rise of Netanyahu as the person in charge of Finance in early 2000s, significantly helped the nation to relook at its economic policies and help bring in pro market reforms that aids in innovation and entrepreneurship. The Government also has ensures that R&D funding is used very effectively to promote entrepreneurship.

Overall, the book is a good read, and would recommend it for readers who want to explore Israel’s journey as a start-up nation. 

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