Start-Up Nation

Senor and Singer argue that Israel produces a disproportionate number of technology companies relative to its size, and examine the conditions they believe explain it.

Their explanation has several parts. Military service, particularly in technical units, gives young people responsibility and technical training at an age when their peers elsewhere are in university, and produces a national network in which people who served together recognise each other for decades. The military's culture of improvisation and of junior personnel challenging seniors carries into civilian work. Immigration supplied waves of educated people who had nothing to lose, particularly from the Soviet Union in the 1990s. Government programmes including Yozma seeded a venture capital industry by matching foreign investment. Adversity and the absence of a domestic market forced companies to build for export from the first day. And a cultural tolerance of failure and of direct argument removes the social cost of an unsuccessful venture.

The book is well reported and the specific mechanisms are described concretely, particularly the military unit networks and the Yozma programme.

It is also advocacy, written with a purpose, and the analysis is thin on the counter-explanations: the very large American defence and aid relationship, the diaspora capital and market access, the concentration in a small number of sectors, the limited number of companies that scaled rather than being acquired, and the political and security context which the book treats as a source of advantage. Read it for the mechanisms and seek the assessment elsewhere.