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IATI - Israel Advanced Technology Industries
IATI - Israel Advanced Technology Industries
IATI News & Events Daily Industry News India can learn from Israel's start-up culture

India can learn from Israel's start-up culture

Oct. 9, 2012

Friends and colleagues from India often ask me about the hi-tech industry in Israel, writes Josh Daniel in Time Of India. Specifically, how does such a small country with a population of just over 7 million generate so many start-ups? What is the impact on the local economy and society? What is the extent of cooperation with India? India and Israel are technological leaders, each one in its own right, so the interest is appropriate. One could easily write a book on these topics, nevertheless let me try and briefly put things in perspective.

Israel's start-up culture has its roots in the defense establishment and the setup of a civilian army in the early years of the state. Over the years the nation's technological ingenuity has become a fait accompli world over in the realm of military and homeland security. The ability to improvise and deliver 'quickly and effectively' has made Israel one of the leading countries in the field of defense systems and weapons technology. This ability to 'improvise' paved the way to success not only in technology but also in other fields like agriculture and medicine. For a tiny nation established in a difficult and hostile environment in 1948, its founding leaders invested heavily in science and technology. Rising initially from pure national security concerns, ability to 'improvise' has been a guiding principle for Israel's hi-tech industry over the years, which is evident in the numerous start-ups sprouting at a dizzying rate - second only to that of Silicon Valley.

But the start-up nation is not without its social concerns. The advent of the dotcom boom in the mid-90s saw the emergence of an 'exit culture'. Technology companies founded by young 20 or 30 somethings, most of them having served in elite military technological units would raise money, develop the product and few years down the road get acquired by an American giant. The foremost instance was that of Mirabilis, founders of the popular Instant Messaging software ICQ, which was sold to America Online (AOL) for over 400 million dollars in 1998. Numerous Israeli start-ups have been acquired in the same manner ever since, and continue to get acquired every year by international giants mainly from the US for ten to hundreds of millions of dollars. Having been part of the start-up environment, we debated among friends and colleagues that the exit culture would at some point prove detrimental to the economy if exits became the primary objective.


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