Start-up Nation and Silicon Wadi: Israel’s ‘high-tech miracle’

Graph: Concentration of Scientists and Engineers, (per 10,000 members of the labor force). Source: Office of the Chief Scientist, Israel Ministry of Industry and Trade,

“Israel represents the greatest concentration of innovation and entrepreneurship in the world today,” wrote Dan Senor and Saul Singer in their book, Start-up Nation: The Story of Israel’s Economic Miracle, published in 2009.

Their claim remains well-supported: Israel’s surge in high-tech enterprise, though dramatic, has not been sudden.

“By the end of the 1990s, the Israeli high-tech cluster had achieved the same rank as Boston, Helsinki, London, and Kista in Sweden, second only to California’s Silicon Valley,” wrote Catherine de Fontenay of Melbourne University and Erran Carmel of American University in a study, Israel’s Silicon Wadi: The forces behind cluster formation. “At the core of the Israeli cluster lies…software, data communications, electro-optics, hardware design, and internet technologies. Related…industries include medical technology, bio-technology, agricultural technology, materials technology, and military technology.”

According to the study, Israel was the largest single foreign destination of American venture capital investments in 1999 as technology firms bought Israeli startups to bolster their technologies as they had once acquired in Silicon Valley.

The Economist reported in June that in the past two decades, Israel “engineered an economic miracle.”

“Since the 1990s Israel’s economy has been on a tear; between 2004 and 2013 growth in real GDP averaged about 4 percent a year,” the magazine reported. “A nimble tech sector deserves much of the credit.”

Milk & Honey: Nominal Gross Domestic Product per person

While Tel Aviv is ranked fifth in the world for starting a business according to Compass, Jerusalem is now gaining a reputation for its start-up environment. In 2015, Entrepreneur Magazine named Jerusalem as the no. 1 emerging “tech hub” in the world. The Holy City is home to two of the biggest start-up funding platforms in the world: Jerusalem Venture Partners (JVP), which manages a portfolio of companies worth nearly a billion dollars and is among the top 10 venture capital firms in the world; and OurCrowd, the largest and most successful crowdfunding platform in the world.

Made in Jerusalem logo

A boon to Jerusalem’s start-up environment is MadeinJLM, an organization that actively works with and promotes the start-up community in the city.

Helping to “accelerate” the high-tech boom, on Jan. 16 computing giant Oracle launched Startup Cloud Accelerator in Israel. The launch here is the second of its kind globally, after the first inaugurated in India last year.

The six-month acceleration program aims to find budding entrepreneurs to help Oracle become the leading company using “cloud technology,” or remote Internet servers, to store and process data.

“’Our vision is to be the home of the start-up in the ‘start-up nation’ [Israel],” said Uzi Navon, leader of Oracle Israel.

Also of interest:

Compass Ecommerce Genome blog: The 2015 Global Startup Ranking

Compass E-commerce Dashboard