Israel is a small country when compared to India in terms of landmass. Yet, it has been ranked 5th among the “20 Most Innovative Countries” during the current COVID-19 pandemic. So, how did a small country achieve this holy grail? They secured their spot on this list due to their start-up and innovation-oriented culture.
Craving for more details? We got you covered.
Here we have the reasons why Israel rules the world in terms of innovation.
A Little Background Check
Israel came into being in 1948- around the same time as India. Yet, there’s a lot India can learn from its ally. It has a total population of just 8.5 million. It is surrounded by enemies. So, exporting is not an option. Israel is bestowed with limited natural resources like water and a vast stretch of their land is arid. Then how did they manage to get such a great output when they had a little to put in?
Here are some of the integral strings that Israel used to knit a strong innovation culture despite all the odds.
1. Embracing the Failures
In Israel, unlike in India, failures are not stigmatized. If an entrepreneur fails in a start-up, he/she is not seen as a loser or a failure. Instead, he/she is considered as a person enriched with experience as they can learn from their previous mistake. Trying again and again to excel is seen as the fundamental principle of business.
They also apply the same principle to their technology sector. As a result, most of their exports are related to tech services.
2. Investment in R&D
Israel invests about 7% of its GDP on the education system. As a result, 45% of adults complete tertiary education. But apart from that, it spends a huge amount of its money on Research and Development i.e. the R&D sector.
It is estimated that Israel invests around 4.6% of its GDP in the R&D sector and it ranks on the top in this regard. one-third of this amount goes to universities of the nation to encourage the research activities among students. This is a remarkable strategy that is really paying off.
3. Technology Aided Security
Since it is located amidst its enemies, Israel has to constantly fight against terrorism. To serve this purpose, they have devised a high-end technology-driven security system. The Israeli military is a National Incubation Centre itself and hence, is a significant catalyst for innovation.
The youth is specifically exposed to technology along with their military applications. During the compulsory conscription, they are exposed to high-tech military weapons and equipment They are also taught discipline and teamwork and are polished to improve their troubleshooting skills. This helps them with innovation as well.
4. Relying on the Youth
Army service is the undeniable factor in Israeli culture. But what makes them an innovation master is not related to the military.
A system is devised for scanning all the schools in the country to find the most talented minds. They are taught to handle responsibility at an early age and are skilled to be held accountable. Children are also encouraged to take responsibility for their own actions and are informed about their service to the community. This rationale has been appreciated all over the globe.
5. Reverse Innovation Model
This model involves understanding the challenge first and then working backward to find the solution. This can be quoted with the example of established firms pitching their problems to startups. This creates an environment for joint ventures and often, competing firms end up working together to solve their common problems.
The ability to work together with the competing firms is really making a difference.
6. Attracting Venture Capitalists
The unique factor to the innovation culture in Israel is the playground for venture capitalists is created by the government of the country itself. In 1993, the Israel government created its own venture capital firm with an initial investment of 100 million dollars. It was named the Yazma group.
This was followed by a dedicated search for venture capital firms. The main aim was to hold a small stake in the companies through Yazma. The companies were set to compete against each other for the best technology-based start-ups in the country. This was an attractive deal for the investors as the risk factor was nullified by the government support.
The creativity of Israel and their hard work has taught the world that limited natural resources, less population, and small landmass cannot limit a nation’s progress. Seeds of the start-up culture and innovation are sown using the equipment of openness, hard work, and accountability.
Check out the link below to know about the innovations contributed by Israel that helped the entire world.
Written by - Neha Kundu
Edited by- Maryam Salim
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