
How Did Israel Become the “Start-Up Nation”? - cwan
http://freakonomics.blogs.nytimes.com/2009/12/04/how-did-israel-become-start-up-nation/
======
wheels
This is somewhat misleading on several points:

\- They're working with some other definition of startup than we're accustomed
to. CrunchBase, for example, has 581 listings within 20 miles of London, and
35 within 20 miles of Tel Aviv.

\- The Israeli tech startup world seems to kind of be in the shitter right now
relative to its heyday in the first web boom. There's a shift of VC out of
Israel and into China at this point.

\- The whole blah, blah military -- there are lots of countries with
compulsory conscription that don't have a lot of startups.

I think the only thing I really agree with is the general sentiment: national
culture greatly affects people's inclination towards opportunism. No culture
of opportunism, not many startups.

~~~
endtime
>They're working with some other definition of startup than we're accustomed
to.

Or CrunchBase isn't a definitive listing. Isn't it feasible that an English-
language site will have less complete information from countries where the
main language isn't English?

~~~
wheels
It's probable, in fact, but even so, Tel Aviv is also way behind Paris,
Berlin, Amsterdam, Stockholm, Munich, Barcelona, ...

Note that most Israeli tech businesses _have_ to be international players. The
Israeli market itself is tiny.

~~~
nir
\- CrunchBase is a very poor source for this data: established companies like
Scitex/Scailex (<http://en.wikipedia.org/wiki/Scailex_Corporation>) or Saifun
(<http://www.aboutus.org/SaiFun.com>) don't appear at all, Zoran's entry
(<http://www.crunchbase.com/company/zoran>) doesn't list a location, Zend
Technologies is listed as a Cupertino company when it was founded and still
does its R&D in a suburb of Tel Aviv.

\- Tel Aviv is just one town, whereas the topic is Israel as a whole. Many of
Israel's major players are in Haifa (where Israel's equivalent of MIT is
located) or Jerusalem or other places - Israel is a tiny nation, the commute
from Haifa to Tel Aviv can be quicker than taking the subway from Brooklyn to
uptown Manhattan.

By the way, do you have a source on the Israel-China VC shift? I think Sarah
Lacy wrote something to that effect, but it seems strange since the two places
have almost opposite characteristics. I can see China competing with India or
Israel with Estonia, but not with each other.

------
Icterus
One partial explanation which intrigues me, from the "what you can't say"
files:

Historically (e.g. medieval times) the priesthood drew many of most
intelligent/academic segment the population, as a compelling alternative to
manual labor.

Beginning in the 4th century, Christian priesthood adopted celibacy, which
later was made mandatory by the Roman Catholic Church, which sought to prevent
inheritance from draining its coffers.
<http://en.wikipedia.org/wiki/Celibate#Christianity>

Meanwhile, Jewish Rabbis have been encouraged to marry and bring up children
throughout this history.

Over centuries, you get a selective drift which results in a different
distribution of intelligence among the populations. This explains in part the
statistical incidence of academic achievement in the jewish population:
<http://en.wikipedia.org/wiki/Ashkenazi_Jews#Achievements>

Note that I'm speaking here of statistical measures. There are plenty of dumb
jews, just as non-jews. But thousands of years of policy from the Catholic
church has led to a population shift which has excluded many of the
historically most academic in nature from procreating over 25 - 50
generations.

An explanation I first came across in Nozick's
<http://en.wikipedia.org/wiki/Anarchy,_State,_and_Utopia>

~~~
philwelch
As much as I like the "Ashkenazi Jews are a genetically smarter population"
hypothesis, it's not sufficient to explain what's going on. It's probably
necessary that some level of intelligence exists within a population for
startups to happen, but it's probably a vanishingly small part of the
equation.

~~~
Zarathu
Not only does it not explain why there are so many Israeli startups, but it's
a false hypothesis altogether. Aside from the fact that IQ is more a
representation of adaptation to modernity than intelligence, there are many
environmental factors that come into play.

There would probably be more startups in the Arab population if they weren't
so discriminated against in the country.

~~~
Fljotavik
That is possible. On the other hand, you don't really see too many start ups
in nations where the Arab population makes up the majority either, such as
Iran, Saudi Arabia, Jordan, Syria, etc.

~~~
Zarathu
(Oh, I should let you know that Iranians are NOT Arab, contrary to popular
belief. They're Persians.)

------
hop
Considering theres only about 13 million Jewish people in the world, they are
disproportionately successful. Top of the Forbes 400, correct me if I'm wrong
-

1 William Gates III, Athiest/Agnostic

2 Warren Buffett, Athiest/Agnostic

3 Lawrence Ellison, Jewish

4 Christy Walton & family, Inheritance

5 Jim C. Walton, Inheritance

6 Alice Walton, Inheritance

7 S. Robson Walton, Inheritance

8 Michael Bloomberg, Jewish

9 Charles Koch, ?

9 David Koch, ?

11 Sergey Brin, Jewish

11 Larry Page, ?

13 Michael Dell, Jewish

14 Steven Ballmer, Jewish

15 George Soros, Athiest, but Jewish by blood

16 Donald Bren, ?

17 Paul Allen, Athiest/Agnostic

17 Abigail Johnson, Inheritance

19 Forrest Edward Mars, Inheritance

19 Jacqueline Mars

19 John Mars, Inheritance

22 Carl Icahn, Jewish

23 Ronald Perelman, Jewish

24 George B. Kaiser, Jewish

25 Philip Knight, Athiest/Agnostic

26 Sheldon Adelson, Jewish

26 Anne Cox Chambers, Inheritance

28 Jeffrey Bezos, Jewish

29 James Simons, Jewish

30 Dan Duncan, ?

30 Edward C. Johnson III, Inheritance

32 Jack Crawford Taylor, ?

33 James Goodnight, ?

33 John Paulson, ?

35 John Kluge, ?

36 Steven Cohen, ?

37 Philip Anschutz, Evangelical Christian

37 Rupert Murdoch, Christian

39 Harold Hamm, Christian

40 Pierre Omidyar, ?

40 Eric Schmidt, ?

42 Eli Broad, Jewish

43 Steve Jobs, Buddhist?

44 Len Blavatnik, ?

44 David Geffen, Jewish

~~~
kingkilr
Why do some people have their religion listed (or atheist/agnostic) but others
have inheritance?

~~~
hop
They aren't "successful", just won an ovarian lottery. Skews the data.

------
condor
"Israel is the largest cumulative recipient of U.S. foreign assistance since
World War II. From 1976-2004, Israel was the largest annual recipient of U.S.
foreign assistance, having recently been supplanted by Iraq. Since 1985, the
United States has provided nearly $3 billion in grants annually to Israel."

<http://www.fas.org/sgp/crs/mideast/RL33222.pdf>

I can imagine that has some trick-down effects on the "financing of
ideas"-side of the equation. Smart people are one thing, smart people with a
lot of resources, another.

~~~
endtime
The vast majority of that has been military aid, at least 76% of which has
been required to be spent in the US, IIRC.

~~~
condor
Agreed, it looks like the breakdown for '49-07 is $53B military $30B economic.
I have no idea how that was committed etc., but it shouldn't be discounted the
unique position Israel has been on the US Aid side, and what affect that could
have on spurring economic (and start-up) growth for a nation of 7MM people.
That shouldn't take away anything from the qualitative characteristics
mentioned in the article, just another data point.

------
Eliezer
I should write sometime about the rationalist virtue of chutzpah, since I just
now realized that this has been a major driving factor in my life.

~~~
smanek
"From the age of zero we [Israelis] are educated to challenge the obvious, ask
questions, debate everything"

Why do you think they don't question their religion?

~~~
endtime
Most Jewish* Israelis live secular lives. Not sure where you get the idea that
they don't question religion.

*1.5 million Israelis are Arab Muslims.

~~~
smanek
Well, the nation certainly doesn't act secularly since they treat people
differently based on their religion (the law of return, as an obvious
example).

And you're flat out wrong that most Jewish Israeli's live 'secular lives.'
It's a common misconception - but the most comprehensive survey done on the
matter that I could find (<http://www.jcpa.org/dje/articles2/relinisr-
consensus.htm>) says otherwise. About 20% of Jews in Israel identify
themselves as secular - but most of those aren't secular for all intents and
purposes (they attend temple, perform rituals, believe in God, etc).

Over half the Jews in Israel believe that the Jewish people were 'chosen'
among other people by God. A substantial minority (more than are actually
secular) believe that non-practicing Jews are a threat to the Jewish people!

So, that is where I get the idea that they don't question religion.

~~~
thelonecabbage
Again it's a question of definitions. Israelis define "religious" differently.
About 20-30% of Israelis are what Americans would consider "religious", about
a 1/3 of that is "ultra-religious".

The 20% that consider themselves "secular", REALY mean secular. As in, hard-
core-athiest. They eat pork, and it's not a statement, it's just meat. You'd
love them.

To clarify what lies between let me explain. In a recent survey some 75% of
Israelis claimed to keep some form of kosher. For the majority of that sample
space "kosher" meant lobster but no pork. Both equally unkosher, but there is
a stigma attached to pork. All the same, these same lobster-jews would be very
offended if you called them non-religious, they are in their OWN WAY. In
American definition they are "non-practicing", but not in their own.

The "subsantial-minority" is a weasel word. But is largely limited to what
would be termed "ultra-religious", and they are entitled to their opinion,
thats a democracy for you. Last I checked, there was a substantial-minority in
the US that considered seculars dangerous, their called the religious right.

Either way, this has NOTHING to do with startups.

Israelis, like anyone else, are complex people. Up close, Israelis are hard
working, an incredible combination of the empathic and the aggressive. Some
are good some are bad, most are a bit of both.

And speaking as a religious person, everyone questions their faith, and even
more their "religion". I don't know anyone who is that simple. Don't turn
people into caricature.

------
mun411
As long as there is government and cultural support any country can be a
'start up nation'. Israel fits that description.

------
andreshb
I'd like to see more "chutzpah" examples outside of the usual US+Europe+Israel
arena.

