Start-Up Nation

Start-Up Nation: The Story of Israel’s Economic Miracle by Dan Senor and Saul Singer, Twelve, 2009. 

Technology

In recent years, the state of Israel has produced a large number of technology companies, way out of proportion the small size of its population. 

The authors have identified a number of traits that may be responsible for Israel’s phenomenal success: (a) Informality, (b) Chutzpah, (ccc) It is okay to fail, (d) Everyone knows everyone

Military

Israel depends on a reserve system, rather than a large standing army. Everyone is required to serve in the military. The IDF hierarchy is very flat. The senior officers make up a smaller percentage of the soldiers than in the U.S. military. Soldiers are given large responsibilities at a young age and lower rank. The IDF is more consensual than U.S. military. The culture is informal, with an absence of saluting, and a willingness to challenge superiors. In the IDF, performance is more important than rank. Promotion is based not just on what your superiors think of you, but also the opinions of those under your command. The authors believe that serving in the IDF gives young people real-world experience in problem-solving and responsibility, which are needed for building a business. Many of Israel’s entrepreneurs have served in elite units of the IDF, such as: (a) Unit 8200 (signal intelligence, whose alumni started Check Point and Fraud Sciences), (b) Mamram (Center of Computing and Information Systems), (c) Talpiot program

Talpiot

The Talpiot program was founded by Felix Dothan and Shaul Yatziv of the Hebrew University of Jerusalem, with the approval of Raful Eitan, IDF chief of staff. It was founded in the wake of the Yom Kippur War, which Israel almost lost, due to over-confidence, complacency,  and not being prepared. Talpiot combines a military boot camp similar to the training IDF paratroopers receive, with accelerated technical studies (mechanical engineering, physics, math). Admission into Talpiot is very competitive. Talpiot alumni helped found NICE Systems (call-monitoring) and Compugen (bioinformatics and drug discovery). 

Jews Who Left Russia

During the 1990s, Israel absorbed eight hundred thousand Russian Jewish immigrants from the former Soviet Union, many of them with strong technical skills. In Russia, they were a market-dominant ethnic minority, but suffered from bigotry. In Israel they live in several large Russian-speaking communities. 

Intel

The subsidiary of Intel in Israel was founded in 1974 by Dov Frohman. In 1980 it designed the Intel 8088 microprocessor for the first IBM PC. In 2003 it designed the low-power Banias microprocessor, also called Pentium M. In 2006 it designed the Intel Dual Core microprocessor. It has large chip plants in Jerusalem and Qiryat Gat. As of the writing of this book, it is the largest private-sector employer in Israel 

Moving Away from Socialism

Since its founding in 1948, the economy of Israel has had strong governmental involvement. Past government policies have favored labor unions, and much of the financial sector had been nationalized. Starting about 1990, Bibi Netanyahu, Ariel Sharon, and the Likud Party removed many restrictions inhibiting business in Israel. 

Water

The only nation whose desert is receding is Israel. Israel is the world leader in recycling waste water. National Water Carrier pipes and canals move water from the Sea of Galilee in the north to the Negev Desert in the south. The system was built by Mekorot, Israel’s national water company. The Natafim company was founded in 1965 by Simcha Blass and Kibbutz Hatzerim. The company specializes in drip irrigation, which is an effective means of reducing the salinity of soil. Netafim has expanded way beyond Israel, to Asia, Australia and South America.