We had the opportunity to meet Ron Waldman, professor at Tel Aviv University specializing in High Tech. He is from the USA and lives in Israel since 30 years. This first macroeconomic insight into Israel is a good introduction: Ron Waldman has introduced well-known companies representing the success of innovation in Israel, such as Given Imaging or Better Place (we will visit it in the coming days).
According to Prof. Waldman, Israel is “a small country but a vibrant economy”. Just a few figures:
- unemployment rate = 5.6%
- GDP growth = 3%
- 34% of the population holds a university degree
- there are 8 universities in the country
- Israel has the highest number of engineers per capita (more than in the USA or than in Japan)
So why is Israel so different?
First, what emerges are the economical and governmental logics which make Israel an innovative country. This translates into the ability to quickly introduce innovations to the market (role of Technology Transfer Offices to assist the commercialization of university research results), the ability to finance and sell innovative companies to reinvest, the diversity of innovative sectors (IT , Web 2.0, Health, Mobile, Games), incubators (the state is funding 85% of the initial startups capital), tax benefits, public support for R & D and the existence of a developed market for private funding (investment funds, business angels).
But what is striking in our meetings during this day is that, beyond the rational aspects, which can be found in other innovative regions in the world, culture, history and Jewish religion make Israel very special. These unquantifiable and elusive ingredients really make a difference.
First, the phenomenon “Jewish mothers”: every mother wants for her son, in exchange for the effort for his education, a career as a doctor or engineer. This gives a spirit of winning and a lot of confidence to young people. The fact that this is a multicultural immigrant society (multiple socio-economic backgrounds, and pioneering spirit “from scratch”), with no hierarchical relationship in business, promoting spontaneous critics regardless of the rank and where everyone is called by first name rather than using the usual marks of respect (sir).
Moreover, the role of the army, including compulsory military service for young people (3 years for men and 2 for women), is important. The idea is that if the student is bright, he will integrate a technology or intelligence center, allowing him to get a great network in high tech. Generally the army builds trust between the young soldiers who will be able to advise and maintain a network of strong relationships for future business. The army can quickly give high managerial positions to young people, so they gain confidence. Moreover, according to the speakers, the army learns to never give up and relativize during hard times. The army also teach to be constantly on alert so that Israeli people are eager to live, are not afraid and do not hesitate to try.
Finally, the role of the diaspora and the idea that every Jew in the world feels like being Israeli are important. Economic zionism stimulates innovation through numerous funding of universities, startups … Thus, the R & D centers of major companies have settled in Israel soon. This is the case of Google for example, whose founders are Jewish.