Israel: A country of start-ups

Running a start up requires a mix of creativity and risk-taking capacity. It is never an easy endeavour. But when an entire country develops a reputation for being a start-nation nation, it is intriguing and confusing at the same time. One such county is Israel.

When Dan Senor and Saul Singer published their famous book “Start-up Nation: The Story of Israel’s Economic Miracle” in 2010, they raised a pertinent question – How did a community of penniless refugees transform a land that Mark Twain described as a “desolate country . . . a silent, mournful expanse,” into one of the most dynamic entrepreneurial economies in the world?

Paolo Franzese Jun (2017), Source: https://medium.com/the-startup-nation/brics-map-of-fintech-startups-in-israel-34909842ffe1

The answer perhaps lies in Israel’s start-up culture. Israel, a young country with a hostile neighbourhood, resembles the size of a dot on the map. It is one of the leading economies in the world. In 2019, GDP of Israel was US$ 387.717 billion, and it has the largest number of start-ups per capita in the world, around one start-up per 1,400 people. Companies are leading in every field from agriculture to technology.

However as a student of Defence and Strategic studies, the area which I found the most fascinating is cyber security, a domain with over 450 companies currently operational. This is about five percentage of the world’s cyber-security market. Encouraging start-ups in such a sensitive area is rather surprising.

Source: Israel embassy to Thailand, official website

For more than 25 years, Israel is dominating globally in development in IT security technology. It is interesting to note that cyber security start-ups started in 1980s, when several industries were developing anti-virus software, and eventually culminated into a cyber security industry.

As per reports, hard work by professionals blended with extra-ordinary state support explains success of Israel in this field. Stefan Silver – Director of Operations and Business Development at Wise Money Israel LTD had said in interview that ‘Every start-up in Israel doesn’t make competition with the other start-ups of Israel, they make competition globally.’ This is the main reason why Israel is leading start-ups successfully.

Israel is acknowledged as a pioneer in both global development of disruptive cyber-security as well as it has design of revolutionary cyber policies taking care of privacy protection, standards regarding the security of computer system, network and controllers, and covering the mitigation of all threats and vulnerability, incident response, resiliency, recovery policies and activities. As complicated as it sounds, Israel has managed to master the domain and emerge as a global case study.

Relevance of cyber security has become more pronounced in the post-Covid scenario since there has been notable expansion of virtual work space. Every kind of work has been shifted online, people are working from home and it has increased global web traffic, as a result this all needs security and cyber-security is profiting from this.

Data suggests that Cyber-security industries of Israel have raised at least $1.1 billion in the first three month of 2021, and in 2020 it was $2.68 billion – record breaking three months for cyber-security companies. According to some reports, Cyber-security sector comprised 10% of the total market value of tech-market start-ups in Israel in 2015. In 2020, the contribution rose to26%. Evidently, the market for cyber-security is greater than other tech-market.

An interesting case study of Cyber start-ups is Intezer– an Israeli cyber start-up which created the world’s first cyber immune system against the malicious code. The company detects the problem of any threat seen in history by recognising them in advance. To protect their cloud workloads and accelerate incident response, this technology is helping security teams. Yet another start-up in cyber security domain is CyBureau: Institute for Cyber Studies founded by Prof Tal Palev which focuses on delivering knowledge about the cyber-security in order to empower citizens. Thus Israel cyber start-ups are producing technology and also knowledge and awareness about cyber industry.

Friendly countries like India can learn a lot from Israel. Surrounded by a hostile China and Pakistan, India needs to develop its cyber capabilities and Israel, which is a pioneer in this field, can be a great partner.