Israel: Moving Beyond the 'Startup Nation'?Feb. 11, 2013
Israel has been lauded for its emergence as the "startup nation," where capital floods into innovative companies that eventually sell out to foreign giants like Google Inc. and Intel Corp., but a central question for the country's future is whether it can create more homegrown multinationals, a prominent Israeli economist said in Atlanta.
So far, a "take the money and run" approach has prevailed, with Israeli firms cashing out instead of growing their companies, said Pinchas Landau, an independent expert who writes for Israeli and international media and also publishes the Landau Report, his own monthly newsletter.
"Foreign investment is still coming in for the last couple of years at a very good pace, but that model is finished," Mr. Landau said, noting that since the financial crisis, it has been more difficult to float a company on Nasdaq or attract venture capital from the United States.
Israel has only one company like TEVA Pharmaceuticals Ltd., a multinational that was able to singlehandedly skew the country's foreign investment statistics with a major deal in 2006.
"Why is there only one TEVA in Israel? Why do we have only one company which is global-sized in its field? Why don't we grow bigger companies?" Mr. Landau asked, repeating questions he said have been floating around Israel for years.
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