Israel spends about 4.4% of its GDP on research and development. The country is a startup on its own. Almost every family has an entrepreneur in them as their culture is developed on entrepreneurship. It often termed as a startup nation. Various startups are coming up in various domains, especially dominated by tech-driven startups. This tiny nation has built what we call a perfect startup ecosystem, with the government, defense forces, investors and people joining hands in building up this. We as a developing nation should pick up some positive points from them.
According to Statista, the number of startups founded in Israel between 2014 and 2017. In 2017, the number of startups founded in the country was 700, a decline compared to the previous year's 932. In 2019, the ease of doing business score in Israel reached 73.23. During the period of consideration, the ease of doing business in Israel was 49 in worldwide comparison.
So, in this post we've shared some insights why Israel is well ahead in startup race. Here are some reasons why Israel is a hub for entrepreneurs and entrepreneurship
Reasons Why Israel is Well Ahead in Startup Race
Support from Government
Israeli government started building the startup ecosystem from 1974, by commissioning OCS for Research and Development. Currently, it supports around 30 incubation centres and provides various grants ranging in millions of dollars for startups in tech sectors. The focus is more on tech, biotech and medical technology. Government has also reduced Corporation tax for tech companies from 25% to 6-7% ( depending upon the business ) and AHS removed bureaucratic obstacles to encourage hi-tech mergers. Also in In 1993, the Israeli government initiated a plan called Yozma (Hebrew for “initiative”) offering attractive tax incentives to foreign venture-capital investments in Israel and promising to double any investment with funds from the government.
The Large Pool of Venture Capital
With the highest number of venture capital investment in this tiny country, investments per startup have exponentially increased within a few years. The countries have around 75+ active venture capitals, out of which around 20% VCs are international ones with local offices. Some many other VCs do not have a physical presence yet invest heavily in the startup of this nation. Also, the International business person comes back to the country to share their knowledge and money. Some of them became angel investors to back up startups.
Buzzing Startup Culture
People are quite enthusiastic about starting their venture. Meetups at coffee shops and people discussing new ideas and innovations are quite common. Israeli startups are more focussed on cybersecurity, edtech, medical technologies and SaaS(Software as a service). Since the population of Israel is less so their target audience is from other big countries like USA, India etc.
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There has been tremendous growth in coworking spaces and accelerators. These help people with the same passion to interact and grow together. Many great and revolutionary ideas came out of these spaces. The startup city of Israel, Tel Aviv has about 80 accelerators and incubators. These have also helped many potential ideas to turn into successful ventures.
Israel Defense Forces
Innovations and building technology for IDF have resulted in big startups sprouting up in technological and defence domain. They have helped in solving complex military problems and exporting defence technologies to improve their GDP. Due to the compulsory military training for both men and women makes them relevant and displaced, which eventually helps in their entrepreneurial skills.
Culture and Community
Israel is a country of refugee and immigrant, making it a very diverse country. The two-thirds percentage of people in the country are willing to take the risk of entrepreneurship. The culture of the country is made on entrepreneurship. Also, since it is a very small country, there is no local or regional. market, hence forcing the entrepreneurs to think globally. Also, they have tricks and ways to cooperate with funding for themselves.
Survival Leads to Innovation
As mentioned above Israel is the country of migrants, they have survived through a lot of suffering. This has to lead to a lot of innovations in Israel as it said survival leads to innovation. This innovation has indulged the spirit of entrepreneurship in the Israelis. They gave then continued this process and keep on building entrepreneurship in their country.
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Discipline Towards Business
Israel's entrepreneurs both men and women, due to their military training are the reason behind their discipline nature and approach towards their business. These are why they are dedicated to their business. They focus on their work ethic and how it's going to compete in the markets of the world.
It is the Silicon Valley of Israel. Situated in the coastal plains of Israel. It is an area with a high concentration of high- technology companies. It is the reason behind the name of Israel as the "startup nation of the world ". It covers much of the country's High tech industry. Many international technology companies along with ahem their research and development sector situated in here. Example are Intel, IBM, GOOGLE, Facebook, Microsoft etc.
It is also the home of popular Israel is companies like Zoran Corporation, CEA Inc. Redware etc. It is the perfect place for having a startup and making it a successful one.
Easy Procedure of Starting a Startup
It is not very tough to start a startup in Israel. Starting a startup is easy in the startup nation. If someone is willing to, do so, then read the market ecosystem, gather a team of own, form an idea, join a incubator or accelerator if details like pitching, licensing is wanted to be avoided or someone wants to go independent and have the resources, few bucks a relevant idea then Israelis go for it.
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Israel is a small country with a population of mere 8 million but the development it's doing in the field of a startup is commendable. From government to investors everyone is backing the startups. Even though there is risk there but that risk is worth taking for Israelis and they are taking it. Also, there is no end of startups there but each startup is different from the other and has something to offer which is new and needy. They believe in world domination with their products and hence they are working toward it through their startups.