Idea Spies Edition - The Why behind Israel as the Startup Nation of the World with Jeremy Ungar, Israeli Editor of IdeaSpies

Welcome to the 6th episode of the IdeaSpies Editor Series in partnership with the A Spanner in the Works Disruption Podcast. I'm Lynn Wood, the Founder and Chief Idea Spy of IdeaSpies.

Jeremy Ungar, Senior Trade Officer of the Israel Trade and Economic Commission in Sydney, Australia, and Israeli Editor of IdeaSpies, will update you on how Israel became the Startup Nation - the one to watch!

Why Israeli Ideas for Idea Spies? Israel is a little country in land mass with a relatively small population that is only turning 75 years old next year. But, about a decade ago, a popularised book hit the shelves; from then on, Israel earned the nickname 'The Startup Nation,' and for a good reason: With a population of around 8.5 million, it has the highest number of startups per capita in the world, around one startup per 1,400 people. 

This phenomenon has caught the eyes of companies with global reach. Global companies are adopting Israeli innovations and buying their companies, investing in startups, and establishing research and development facilities in Israel to tap into their local workforce. Now, a decade later, after the book emerged, some are coining the phrase: Scale-Up Nation, or even using the phrase Unicorn, in exciting ways, to describe the Israeli ecosystem, which helps an idea grow from just that, an idea, to companies with one billion-dollar valuation.

What does he see in the business world? He sees growing attention from established industries, such as in Australia: Mining, Financials, and Water Corporations tapping into the yes-we-can attitude among young professionals in Israel. Companies there are building innovation labs to bring in startup ideas in their infancy, nurturing them amongst their large corporation, growing them, championing the ideas, selling ideas to their network, and benefiting in an above-market-value way.

You can see Israeli ideas, explained simply, on the IdeaSpies platform
https://ideaspies.com/search?q=israeli

Transcript

Welcome to the 6th episode of the IdeaSpies Editor Series in partnership with the A Spanner in the Works Disruption Podcast. I'm Lynn Wood, the Founder and Chief Idea Spy of IdeaSpies.

Thanks, Lynn for the warm welcome and for accepting me as the Israeli Editor for IdeaSpies. A little background about myself and why I’m doing what I’m doing; professionally, I work for the Israeli Government’s trade arm in Australia, known as the Israel Trade and Economic Commission in Sydney. The Israeli ideas posted on IdeaSpies are about business news emanating from Israel with tangible opportunities in Australia. 

I am also a newly inducted member of the Jewish Diplomatic Corps, the international network of Jewish professionals engaged in public diplomacy through the flagship program of the World Jewish Congress, where I advocate for Israel and her export goals. Why Israeli Ideas for IdeaSpies? Israel is a little country in land mass with a relatively small population that is only turning 75 years old next year. But, about a decade ago, a popularised book hit the shelves; from then on, Israel earned the nickname 'The Startup Nation,' and for a good reason: With a population of around 8.5 million, it has the highest number of startups per capita in the world, around one startup per 1,400 people. This phenomenon has caught the eyes of companies with global reach. Global companies are adopting Israeli innovations and buying their companies, investing in startups, and establishing research and development facilities in Israel to tap into their local workforce. 

Now, a decade later, after the book emerged, some are coining the phrase: Scale-Up Nation, or even using the phrase Unicorn, in exciting ways, to describe the Israeli ecosystem, which helps an idea grow from just that, an idea, to companies with one billion-dollar valuation. What do I see in the business world? I see growing attention from established industries, such as in Australia: Mining, Financials, and Water Corporations tapping into the yes-we-can attitude among young professionals in Israel. Companies there are building innovation labs to bring in startup ideas in their infancy, nurturing them amongst their large corporation, growing them, championing the ideas, selling ideas to their network, and benefiting in an above-market-value way. 

Back to the question, why Israel? One poignant point mentioned is the non-separation between Military and State. The two have co-existed out of necessity since Independence, not by their own choice, but because of the hostile Middle East. Though the military is not what may spring to mind when one thinks of personal creativity, ideas, and freedom, some Israelis credit their time in the Israel Defense Forces (IDF) – note that military service is compulsory for the majority of Israeli citizens – for giving them tools to enter the startup game. As leaders, many of the population learn how to improvise, and find solutions when you have a problem without the means to solve it – you need to think outside the box. Hence, the innovative ideas. 

They also have the discipline and mateship to take these ideas and commercialise them afterward.  Also, consider graduating from the military at the age of 20, 21, or 22, then you go on to study, as an undergraduate, at a more mature age than 18, 19 here in Australia, giving an extra advantage and understanding of their studies. But again, why Israel? My background in economics and entrepreneurial innovation permits me to see that it begins with a need or lack of a resource and the most efficient allocation of these. 

We all know that in the Bible – Old Testament, Moses wandered the desert after fleeing bondage in Egypt with the Israelites for 40 years and stumbled upon the only country in the middle-east without oil. Thus, natural resources needed trade, and without space to grow crops, the exchange has been in technologically value-added fields. Back to this hostile environment idea, constantly at war with countries wanting to annihilate the very existence of a Jewish state in Israel. Israeli society has developed a unique DNA that strives for solutions that are both creative and quick. 

Also, there’s a vast technological experience accumulated in the Israeli military, and combined with the supporting ecosystem, these create a uniquely fertile ground for innovative ideas. These ideas have helped Israelis survive against their aggressors, and the mindset about no tomorrow drives quick and decisive action. The demography of Israel today is a migration nation. 

There have been Jewish people dwelling for millennia. A large influx of Jews arrived at the turn of the 20th century after Russian pogroms and massacres. Many more after the Holocaust – note the global population of Jews has not reached its pre-war amount even today. Then there was the exodus from Middle-east nations, Iranian, Iraqi, Yemenite Jews, and Ethiopian Jews, all facing persecution in their home countries for being Jewish. Then the fall of the Soviet Union; brought highly educated, specifically technologically adept migrants at the start of the internet-age to Israel, followed by continued migration from South Africa, England, France, and a smattering from other countries, including Australia. And almost all the youth serve in the Army. A melting pot of cultures, ideas, and comradeship. 

And ideas have emerged from the IDF from a specific unit. The most famous cyber-intelligence Unit 8200; trains young Israeli recruits in coding, hacking, and cyber-espionage – and its recruits train to develop smartphone apps. Unit 8200 is a technical intelligence agency that stands on par with the NSA in everything except scale. Unit 8200 has produced several CEOs; if you’re a Unit 8200 graduate, that carries weight in the tech world – the equivalent of a law degree from Harvard or Yale. For some Israelis converting their ideas into companies, the goal is to sell to Google, make millions, and retire on the beach, which seems like the ultimate dream of some, if not most, of the players in the startup scene. It’s not the dominant paradigm in Israel – not only because Tel Aviv is already on the Mediterranean. 

Some don’t sell their ideas and constantly seek to improve them because there’s a level of knowledge sharing between players that is almost unheard of and assists the entire ecosystem. We do not see knowledge sharing to the same extent in Australia, from the Tech transfer to the commercialization. Then there’s the geographical element. Israel is a small country – not even 20 kilometres wide in the middle, and you’re never more than an hour’s drive from an airport. 

The flip side of that constrained space is congestion: a great emphasis is on innovating in the mass-transportation space, with over 600 startups in the "smart transportation" sector. As the old saying goes, “Build a better mousetrap, and the world will beat a path to your door.” Israel, it can be said, has been continually building better – often entirely new – mousetraps. This alchemy of geographical proximity, shared motivation, and tech skills has caught the eyes of the rest of the world, as incubators seek to align themselves with Israeli innovators and idea generators.