Israel is a booming startup hub. Innovation is pouring out of Israel into the rest of the world, and it’s something that a lot of Israelis take pride in. I’m not saying Israel is the world’s only startup haven, but our technology sector has advanced greatly in recent years.
The sector is going so well that some of the biggest names in the world have acquired Israeli startups: IBM, AT&T, Google, Microsoft, Twitter, Facebook – and dozens of others.
And my question was why?
Israel is innovative, sure, but what is it that is drawing the world’s largest companies to Israel to help them grow? The answer seems to be simple: research and development. Israel spends more per capita than the average business on R&D.
Funneling more money into R&D makes sense, and it allows Israeli startups to enjoy new technologies that are innovating the world. The Organisation for Economic Co-operation and Development (OECD) shows that Israel spends nearly double on research and development than the average country.
Higher expenditures bring in higher returns, and this makes a lot of sense, but there’s more to it, too.
Israel leads the way in scientific publication, ranking third in the world per capita in the past decade. It’s a thriving hub of science, research and development, and business.
The IDF may also play a role in the technology powerhouse of Israel. Service is mandatory, and the IDF also looks at the technology level of candidates. Those that have exceptional technology skills may be placed in technology-focused units.
Units of this level allow the members to train in computer science, leadership and even managing. Tech startups are often closely linked to these units and employ members when their service is over.
Top talent is screened, trained and pushed into startups to help them grow.
Businesses around the world are focusing on Israeli companies because they’re highly efficient. Another reason is that Israel is home to 4,000 startups, so there are plenty of innovative companies in the area. Tech incubators and accelerators are also available making Israel have a culture perfect for the startup lifecycle.
Waze, the GPS app, was founded in Israel and purchased by Google for $1.3 billion in 2013. Mobileye was purchased by Intel for $15.3 billion.
Major purchases are being made, but it’s more than just the initial purchases that are helping Israel. Partnerships and connectivity between Israeli startups has also helped push other startups after acquisitions.
Leveraging these partnerships and bonds helps our startups grow even further into a cycle of success and demand.
Companies are also headhunting Israeli talent. Microsoft, for example, hired a 34-year-old security prodigy from Israel. A member of the elite Unit 8200, the man is a “hacker” who will be responsible for pushing Microsoft’s security to new heights. He will be a key part of Microsoft’s cloud security team, which is the cornerstone of Microsoft’s growth.
Amazon has even hired 10 Israeli engineers to help enhance their Alexa product.