How Is­rael trans­formed INTO STARTUP NA­TION

The Times of India (Mumbai edition) - - SUNDAY SPECIAL - Jaya.Menon@ times­group.com

ISosa is lo­cated in a vin­tage build­ing in south Tel Aviv and has a net­work of 2,500 star­tups srael’s is a dra­matic, rich land­scape, of his­tory, pol­i­tics, econ­omy and progress. Its tur­bu­lent past and wars with its Arab neigh­bours have po­larised it on the is­sue of re­li­gion. But, eco­nomic devel­op­ment in the small State of Is­rael, with a pop­u­la­tion of nearly 8.4 mil­lion — just about that of Chen­nai, and geo­graph­i­cally smaller than Ker­ala — is widely ac­knowl­edged as a mir­a­cle. The coun­try’s desert agri­cul­ture is a global model. And now, its meta­mor­pho­sis into a high-tech su­per­power is one of its big­gest suc­cess sto­ries.

Is­rael has more Nas­daq-listed com­pa­nies than any coun­try bar­ring US and China. It has more ven­ture cap­i­tal per capita and more star­tups than any other coun­try in the world. Re­search and devel­op­ment ( R& D) is a thrust area for the coun­try, which also has more sci­en­tists and tech pro­fes­sion­als than any other na- tion. In 2016, Is­raeli star­tups raised $4.8 bil­lion in ven­ture fund­ing, a record that year, and saw ex­its worth $9.2 bil­lion.

“The high-tech rev­o­lu­tion in Is­rael was a grad­ual process, be­gin­ning in the 1990s,” says Na­tional Eco­nomic Coun­cil head and the PM’s se­nior eco­nomic ad­viser Prof Avi Simhon. “In 2001, the coun­try be­gan to move from deficit GDP to sur­plus. We had great help (fi­nan­cial aid) from the US, but we had to re­turn the loans.” He at­tributes Is­rael’s suc­cess to “an ac­ci­den­tal com­bi­na­tion of a hi-tech rev­o­lu­tion and govern­ment poli­cies”.

Ac­ci­dent may have been the start, but now its growth is by de­sign. The Is­raeli startup mar­ket be­gins in the tech hub of Tel Aviv and ex­tends to Jerusalem and beyond to Beer-Sheva, a south­ern desert city.

One of the rea­sons for Is­rael gain­ing the rep­u­ta­tion of a startup na­tion is the ac­tive en­cour­age­ment of govern­ment and pri­vate en­ter­prises. The na­tion boasts of a cli­mate of trans­parency and col­lab­o­ra­tion, and en­trepreneurs are keen to sup­port bud­ding ones.

Sosa (South of Salame) is Is­rael’s startup plat­form or town square for global in­no­va­tors, set up by pioneers of the Is­raeli tech in­dus­try. Lo­cated in a vin­tage build­ing in south Tel Aviv, it has a net­work of 2,500 star­tups, 400 part­ners and mem­bers, 45 pro­fes­sional in­vestors and re­ceives around 150 global del­e­ga­tions an­nu­ally.

Sosa gen­eral man­ager Uzi Sch­ef­fer sees po­ten­tial for Is­raeli star­tups in In­dia. Uzi, a keen sup- porter of early stage star­tups, sees them bring­ing in­no­va­tion into multi­na­tional com­pa­nies. “We hope to see the Sosa model be­ing repli­cated in In­dia,” he said.

The star­tups are quirky, imag­i­na­tive and ad­ven­tur­ous. Adam Raz’s ven­ture, for in­stance, pro­vides a tech­no­log­i­cal so­lu­tion for pos­ture prob­lems. “Wear­able tech­nol­ogy that ac­tu­ally trains you to sit up­right and cor­rects your pos­ture,” says Up­right Tech­nolo­gies’ web­site and Raz vouches for it with data. He says there are al­ready 12,000 users in the mar­ket.

Chief sci­en­tist of Is­rael’s min­istry of econ­omy and in­dus­try or Is­rael In­no­va­tion Author­ity Avi Has­son says the pri­vate sec­tor has played a sig­nif­i­cant role. He says $4.8 bil­lion of ven­ture cap­i­tal in­vest­ment is in star­tups in the coun­try and 85% of it comes from for­eign in­vestors. “We in­vest 4.3% of our GDP on R&D,” he says. Google, Ap­ple, Face­book, Mi­crosoft, Deutsche Tele­com and Bosch and 350 other multi­na­tional gi­ants have re­search cen­tres in Is­rael. “One of the most im­por­tant pil­lars of the na­tion is its deep pub­lic-pri­vate col­lab­o­ra­tion,” he says.

Ac­cord­ing to in­for­ma­tion gi­ant Dun & Brad­street’s 2015 re­view and 2016 eco­nomic out­look, as of late 2015, some 7,000 hi-tech com­pa­nies op­er­ated in Is­rael, of which 79%, close to 6,000, are star­tups in var­i­ous stages. The re­port says that ap­prox­i­mately (The writer was in Is­rael as a guest of the Is­raeli Govern­ment)

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