How Israel transformed INTO STARTUP NATION
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)
TOWN SQUARE FOR INNOVATION: