Start-up Nation: The Story of Isreal's Economic Miracle

Straight from the Jerusalem Boardroom #137 , November 07, 2009

1.  Start-up Nation: The Story of Isreal's Economic Miracle (, published in 2009 by the Council on Foreign Relations and authored by Dan Senor & Saul Singer: "In 2008 – a year of global economic turmoil – per capita venture investments in Israel were 2.5 times greater than in the US, more than 30 times greater than in Europe, 80 times greater than in China and 350 times greater than in India.  Israel still boasts the highest density of start-ups in the world – a total of 3,850 start-ups, one for every 1,844 Israelis…Israel is the world leader in the percentage of the economy that is spent on R&D.  

But, the real turbocharger has been its universal military training and national service program… Israel's equivalent of Harvard, Princeton and Yale are the the IDF's elite units…Nowhere in the world where people work in a center of technology-innovation do they also have to do national service… According to the OECD, 45% of Israelis are university-educated, which is among the highest percentages in the world…Innovation often depends on having a different perspective, which comes from experience. In Israel, you get experience, perspective and maturity at a younger age…in the military, you're in an environment where you have to think on your feet. You have to make life-and-death decisions. You learn about training your mind to do things…and that is good and useful in the business world…" (Saul Singer & Dan Senor, The Daily Beast, Oct. 25, 2009). 


2.  The Israel Test, published in 2009 by Richard Vigilante Books and authored by George Gilder, founder of Gilder Technology Associates: "The most precious resource in the world economy is human genius…Cities and nations rise and thrive when they welcome entrepreneurial and technical genius…An astounding proportion of geniuses have been Jewish, and the fate of cities and nations has largely reflected how they have treated their Jews.  When Jews lived in Vienna and Budapest, these cities were world centers of intellectual activity and economic growth…When Jews came to NY and LA, those cities towered over the global economy and culture.  When Jews escaped Europe for Los Alamos and for Silicon Valley, the world's economy and military balance shifted decisively…


"Israel has recently become a center of innovation, second in absolute achievement only to the US, and on a per-capita basis dwarfing the contributions of all other nations, America included. How Israel is treated by the rest of the world thus represents a crucial test for civilization…[Israel was] the emerging world leader, outside the US, in launching new companies and technologies…outperforming European and Asian Goliaths 10 to 100 times larger…launching far more high-tech companies per year than any country in Europe…Israel is a prime source not only of free-space optics, but also of ultra-wideband technology...not millions of hertz wide at relatively high power, but billions of hertz wide- gigahertz – at power too low to be detected by ordinary antennas…enabling counterterrorist fighters to see through walls [and bunkers] and identify armed men within…changing the balance of power in urban guerrilla warfare to the advantage of the civilized and the dismay of the barbariansIsrael's technology leadership has made it a vital ally of the US against a global movement of Jihadist terror


"It was an Israeli engineer, Dov Frohman, who invented electrically programmable read-only memory, a chip-based permanent memory that could retain a personal computer's core programming even when the power was off…[It] contributed some  80% of Intel's profits over the next decade and sustained the company's growth to become the world's leading semiconductor company…Flash memories are a forte of Israel's microchip industry and lie behind many American miracles of miniaturization, from thumb drives to Apple's newer iPods to HP Mini netbooks…From Intel's Israeli design centers, emerged several generations of the Pentium microprocessor, as well as the Centrino low-power processor that integrated Wi-Fi wireless capabilities into portable PCs…Immigrant from the former USSR [many of whom honed the instruments of algorithmic science, engineering and mathematics] constitute fully half of Israel's high-tech workers…


"A 2008 survey of the world's venture capitalists, by Deloitte & Touche showed that in 6 key fields – telecom, microchips, software, biopharmaceuticals, medical devices and clean energy – Israel ranked second only to the US in technological innovation. Germany, 10 times larger, roughly tied IsraelAt a time when American venture capital is flagging under the financial crisis, the emergence of a comparable venture scene in Israel, linked closely to Silicon Valley, is providential for both the American economy and its military defense. This development makes Israel one of America's most important economic allies…Early in 2009, Intel celebrated its most important advance since the invention of the microprocessor chip some 40 years ago: "Nehalem" – the new Core i7 device, designed in Israel…" (City Journal, Autumn 2009,