Start-up world

I expected to learn something from writing a book. The surprise was that I would learn even more after the book came out.

When Dan Senor and I wrote “Start-Up Nation,” we were thinking of an American audience. We had no clue that it would emerge in Chinese, Korean, Russian, Portuguese, French, German, Japanese, Turkish, Arabic, Hebrew and other languages.

Over the past 27 months, I have traveled to over a dozen countries to speak about the book. The range of continents and cultures of these countries could hardly have been broader, yet what is striking is what they have had in common. Everywhere, it seems, other countries want to know how they can produce more start-ups, and believe that building an innovation sector is important for them. No less surprising is that these countries, despite the uniqueness of Israel’s circumstances, see lessons for themselves in the story of “Start-Up Nation.”

This is not about the book. It is about the power of the underlying story. All we did is “discover” a natural resource that Israelis still do not fully understand that they possess.

Being Israelis, we are both intensely proud and critical of our high-tech sector. And yet whether we focus on our accomplishments or shortcomings, we tend to miss the point: there is a world out there that is thirsting for innovation, and that world correctly believes that this small country holds a key.

Top international FAQ: what does this mean for my country? A: It is not about imitating, but about learning lessons from and, even better, working with Israel. Every country has its own path to innovation. The US faced none of the adversity that was a key driver in the Israeli story, yet the US created Silicon Valley, still the world’s top innovation ecosystem. So, clearly, there are different paths to innovation and every country has to find theirs based on their strengths, culture, and circumstances.

The High Tech Industry Association (HTIA) convention in Jerusalem, June 2011 (photo credit: Kobi Gideon/Flash90)

But why imitate anyway? We could try to copy German cars or Hollywood movies or French cuisine; but why? Isn’t it more powerful to combine the strengths of different countries? Each one of us is the product of a genetic mashup, of the combination of the genes of two different people. Even siblings, the products of the same two people and the same home, usually turn out very differently. This is the strength of combining differences. Much of Israel’s creative energy comes from the fact that it is a meeting place of so many cultures. Walk into many Israeli startups and you will find a mini-UN.

Mashups also work on the country level. Most of what we call Start-Up Nation is a mashup of big American tech companies and Israeli startups. The power and value of this comes partly from combining cultures, but even more so from combining the strength of big companies –- “scaling up” products –- with the strength of startups and their industry-changing innovation.

Prime Minister Benjamin Netanyahu has said, “We are the Start-Up Nation.” But that realization is just the beginning. It has yet to penetrate our narrative and open our eyes to our enormous untapped potential. As Israelis, we have yet to wrap our heads around what it means to be Start-Up Nation in a world that is increasingly obsessed with innovation.

If we look back 20 years, the pace of change seems rapid. In 1992, most of what dominates our lives today – the internet, social networks, cell phones, laptops and tablets -– didn’t really exist. Much of it is less than five years old. Even the people who were creating all these things had no idea back then what our world would look like today.

I believe that we have even less of an idea now about our world in 2032 than we did in 1992 about our world today. The pace of change is increasing. This means that the premium on innovation, and therefore the significance of our start-up ecosystem, is going up.

It is not a coincidence that President Barack Obama and Prime Minister David Cameron have announced “Start-Up America” and “Start-Up Britain” initiatives. There is a reason why billions are being invested in new tech centers in Russia, Singapore, China, Dubai, and elsewhere. It makes sense that New York is building a very ambitious new tech campus, and that a Cornell-Technion partnership won the contest to do it.

The two elephants in the room –- if the global economy can be referred to as a room — are the financial crisis, and the accelerating process of new countries moving up the value chain, from cheap manufacturing to high-end technology and innovation. These two elephants are driving the world on two vectors: back towards raising productivity the old-fashioned way, through innovation, and towards the emerging markets, where most of the growth will be.

Israel has a unique historical window in which it can not only ride these vectors but play a significant global role in driving them. This is our opportunity not only to change our country – including tackling social gaps, our education crisis, and every other real problem – but also to have an impact on the world. It is our historic mission as a country and a people, a mission that so many sacrificed so much for. Let’s do it.