Whilst we were doing regional and country selections for the Connectivity Scorecard, it was hard to ignore the economic leadership that Israel commands in the Middle East. I also realise that to talk about this country and this region in the same sentence can lead to many other discussions scaling on the upper end of kelvin. I read START-UP NATION a while ago, but when I decided to include leadership in my blog, I felt compelled to write about it.
Here is the primary statement;
START-UP NATION addresses the trillion dollar question: How is it that Israel– a country of 7.1 million, only 60 years old, surrounded by enemies, in a constant state of war since its founding, with no natural resources– produces more start-up companies than large, peaceful, and stable nations like Japan, China, India, Korea, Canada and the UK?
There are many reasons highlighted in the book, but I would just like to highlight two, the role of the military and secondly immigration.
Among the questions posed to Dan Senor (co-author) by Dwyer Gunn of Freakonomics the following extract cover these two points well.
The military as a breeding ground for innovation. As an ex-soldier myself I found this resonate with me.
Q.At the age of 18, almost all non-Arab Israeli citizens must serve in the Israel Defense Forces (IDF) for at least two years. How does the IDF service experience shape the future of young Israelis and contribute to the country’s economic success?
A.”Certain units have become technology boot camps, where 18- to 22-year-olds get thrown projects and missions that would make the heads spin of their counterparts in universities or the private sector anywhere else in the world. The Israelis come out of the military not just with hands-on exposure to next-gen technology, but with training in teamwork, mission orientation, leadership, and a desire to continue serving their country by contributing to its tech sector — a source of pride for just about every Israeli.
Beyond the elite tech units, the military has a much broader cultural impact. The compulsory service produces a maturity not seen in Israelis’ foreign peers who spend that time in university. “They’ve got more life experience,” British Telecom executive Gary Shainberg told us, which “is critical, since innovation is all about finding ideas, and finding new ideas is often about having perspective.” And perspective typically comes with age. But in Israel you get perspective at a young age because so many transformational experiences are jammed into Israelis — including military service — in their late teens and early 20′s.
Perhaps even more surprisingly, Israel’s resource-stretched and constantly tested military teaches improvisation and flattens hierarchies. Soldiers learn “the value of five minutes” as one general told us. They are taught to get the job done and figure out how. And especially in the reserves, barriers are broken; young people command their teachers or bosses, no one salutes, and privates address generals by their nicknames. All this contributes to an informal and anti-hierarchical culture outside the military, which is critical for an experiment-focused, probing, and innovating economy.” (end)
An interesting point also mentioned is the ability for the Israeli civilian employers to read military CV’s. When I entered “civvi street”, I too was faced with the common phrase “but have you done a real job?” After countless iterations of the same speak, I ended up having to retrain as an engineer so that I had “the paper” to show. I think the armies and recruitment agencies have a lot to learn from this country.
Q.Tell us about Israel’s immigration policy and why it’s different from policies in other countries. Have Israel’s recent immigrants helped or hurt its economy?
A. A key lesson from Israel is that innovation is not just something that goes on inside companies; it comes from a wider culture that fosters both innovation and entrepreneurship. Israel is a country of immigrants — there are over 70 nationalities represented in this tiny country. Two out of every three Israelis are newcomers, or the children or grandchildren of newcomers. The Israeli battery-operated car grid company Better Place was founded by the son of an Iraqi immigrant. The Israeli company Koolanoo — the third-largest social networking site in China — was founded by the child of an Iranian immigrant. The Internet music start-up FoxyTunes — which was recently sold to Yahoo for tens of millions of dollars — was founded by a young Ukrainian immigrant. Walk around Israeli neighborhoods, and you’ll find yourself dealing with Israelis from Ethiopia, Poland, Yemen, Russia, and Australia, to name a few.
Immigrants are natural risk takers since they were willing to uproot themselves and start over. In particular, the great wave of immigrants from the former Soviet Union in 1990 to 2000 brought to Israel a tremendous boost in engineering talent just as the tech sector began to take off. Israel is also the most pro-immigration country; politicians there actually compete with each other with campaign promises to bring in more immigrants, not fewer.” (end)
I do find it telling that Sergey Brin comes from the same stock.