Start-Up Nation

The media invariably offers a skewed portrayal of Israel, only reporting on its ongoing political conflicts with neighboring countries, conflict with the Palestinians, or the Iranian nuclear issue. But a major facet of Israel is often disregarded, and that is its economic and innovative achievements.

Many people are unaware that Israel represents one of the most densely concentrated centers of innovation and entrepreneurship in the world.

In fact, Israel is the word leader when it comes to the percentage of the economy spent on research and development. As a result, Israel also has the highest density of start-ups in the world, with a total of 3,850 – one for every 1,844 Israelis.

Today, it’s difficult for technology companies to overlook Israel – and most haven’t. Cisco, for example, has acquired nine Israeli start-ups and is on the hunt for more.

Israeli start-ups also reel in a large amount of venture capital, which is the most crucial measure of technological potential. In 2008, venture capital invested per capita was two and a half times larger in Israel than in the United States, more than 30 times greater than in Europe, and 80 times greater than in China.

Israeli companies also have a powerful presence on the American stock exchange NASDAQ, accounting for more than all European NASDAQ companies combined.

Israel’s start-up scene is vibrantly creative. One example is BetterPlace, which was founded to promote electric cars. There are well-known disadvantages to electric vehicles, such as expensive batteries, a short driving range, and a lengthy recharge time. However, if car buyers don’t need to purchase the batteries outright with the car, then electric cars can be as cheap as gasoline cars. So BetterPlace used this to their advantage by leasing car batteries and creating stations where the batteries could be swapped.

But why is the start-up scene flourishing so well in Israel and not elsewhere? Let’s find out!