I just finished reading Start-Up Nation: The story of Israel’s Economic Miracle. It was interesting but I’m not sure how many really great takeaways there are from it. Fundamentally the book is a history of tech start-ups and venture capital in Israel. It goes into some other industries a little, but it all comes back to that. Basically, to boil it down, what makes Israel so special is the Jewish faith and being hated by every country remotely close to it.
The Jewish faith because of two things – zionism and chutzpah. Zionism because Israel has seen an overwhelming amount of immigration which has constantly refreshed the workforce and brought new ideas. Zionism also brings people into a very small geographic space where they are looking to build lives – they have an incredible stake in working to improve it. Chutzpah, they say, is valuable because the ability to openly critique leads to better innovation. It also creates an environment where failure carries no negative connotations.
Apparently being hated by everybody around you helps too. The authors argue that the intense, compulsory, military service of Israelis creates social capital, nurtures creativity and leadership, and allows for outstanding technical training. Additionally as a result of the Arab Boycott Israel has had to create homegrown R&D industries that just aren’t seen in other counties its size (aerospace, nuclear, bio tech etc.). Finally the ever present threat to security gives Israelis a drive that isn’t found in other countries.
I agree with the authors’ explanations for the economic miracle of Israel. My problem though is that I wonder if Israel is too special of a case for that information to be valuable. After all I don’t think it would be in the United State’s interest to infuriate Mexico and Canada just to get some local enemies. And while Zionism does create a tight knit, invested community – one could argue that the fact that it is a fairly small niche community (compared to the world as a whole) helps keep that manageable. If the US were to have as liberal immigration policies as Israel the sheer numbers might be more unmanageable. Finally some of the causes of the Israeli economic miracle seem to be fairly cultural. They content that part of what separates Israel from Singapore or South Korea (which they argue have similar security concerns and economic conditions) is that those countries don’t embrace failure or criticism. Culture is a pretty hard thing to change so can these lessons be applied?
I do think that the book deserves consideration – but it certainly doesn’t provide a road map for repeating Israel’s start-up culture.
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