Back in August 2014, I remember stumbling upon an article about an Israeli tech company called Mobileye who have just recently been listed on the New York Stock Exchange for approximately $37 USD a share. The company primarily focuses on vehicle safety and are renowned for their innovation and developments in vehicle related technologies. Unfortunately, I didn’t have the knowledge to invest in an overseas share at the time, but if I did, I definitely would’ve invested in this one.
Later in April this year, I scrolled through my news feed, spotting the title, “Mobileye Stock Skyrocketed 34.5% in March”. Next thing I know, I find out they got sold to Intel for $15.3 billion USD, and their share price skyrocketed. Although it was a slightly regretful experience not hopping on the bandwagon, it made me question how such a tiny country like Israel could produce such great success and innovation.
Renowned for its title as the “Startup Nation”, Israel houses over 3000 tech startups, with Tel Aviv hosting most of them. The country also has over 75 accelerators, 80 tech-community spaces, and over 100 investors in a country with only 8.5 million people. This positions Israel as a country with more startups, more venture capital, and more tech professionals than any other country in the world, on a per capita basis.
This is a trend that has exceeded and is only expected to reach new heights, with the total number of startups in the country growing at almost 30% per annum, and around 45% in Tel Aviv alone. One of the main tech industries gaining the most attention from foreign investors is Israel’s cybersecurity industry, which has managed to raise more capital than all European countries combined. It has raised €466 million in 2016, followed by Israel’s Mobility and Fintech industries. In the same year, more than $10 billion USD flowed into the country’s tech industry through exits.
Israel’s tech scene isn’t the only industry that is thriving; the country is also at the forefront of scientific innovation. Launching back in early 2016 on Indiegogo, Israeli startup, SuperMeat, has already acquired vast international exposure. Recently, China has signed a $300 million deal with this lab-grown meat producer. The purpose of this deal is to keep up with Asia’s growing demand for meat, while cutting down on harmful pollution and emission. With the motto, “100% meat, 0% animal suffering”, the company’s values align with the rise of China’s middle class, who are simply going to consume more meat in the near future.
The gigantic Asian market opened up for SuperMeat has limitless potential, with China importing over $10 billion worth of meat in 2016 alone, according to the International Trade Centre. With this demand for meat only expected to go up, who knows how relevant this company will become in the future.
Clearly, there’s immense curiosity surrounding this phenomena within Israel and its passionate environment for creating startups. After overlooking the nation’s overwhelming innovation, we’re left asking ourselves, what is the key to this success? The education system? Government funding? The army? I believe that the main misconception of entrepreneurship and innovation is that something like the government or the education system can ‘kick-start’ it. Although this can be the case in the eyes of many, it is definitely not. Clearly, this is a challenging question to answer, but entrepreneurs like Moshe Hogeg have simplified it.
Founder of tech start-up Mobli in Tel Aviv, Moshe Hogeg, was asked by a representative from WIRED.uk:
"Why do you think Israel is so dynamic? Why is it so successful?"
Moshe responded, “We don’t have any market, we’re only 8 million people, so we are forced to use the most important natural resource in the world, which is the human brain.”
Entrepreneurship can’t be necessary produced or physically quantified; it’s more of a mental approach towards business. This seems to be the approach that Israeli’s have grown up on.
We can clearly see Israel prospering in the success of its startup scene due to its thriving entrepreneurial atmosphere. This is something that countries like Australia can definitely consider, especially with its venture capital industry gaining strong momentum and having a population almost 3 times larger than Israel.