"The West needs innovation; Israel's got it," write Council on Foreign Relations (CFR) Adjunct Senior Fellow Dan Senor and the Jerusalem Post's Saul Singer, in Start-Up Nation: The Story of Israel's Economic Miracle, a new CFR book.† They note that Israel produces more start-up companies on a per capita basis than Japan, China, India, Korea, Canada, and all of Europe, and that "after the United States, Israel has more companies listed on the NASDAQ than any other country in the world."
Senor and Singer profile several Israeli inventors, investors and entrepreneurs to provide insight into the resilience of the country's business sector. They conclude that innovation is the reason for Israel's economic success. "Making innovation happen is a collaborative process on many levels, from the team, to the company, to the country, to the world. While many countries have mastered the process at the level of large companies, few have done so at the riskiest and most dynamic level of the process, the innovation-based start-up."
The authors examine many aspects of Israeli society-from the government and military to business-to determine why start-up companies are "prevalent and impervious to the security situation." They explore the role that Israel's military training plays in grooming young business entrepreneurs, and how the United States could similarly leverage the "leadership, teamwork, and mission-oriented skills" of those serving in the U.S. military today.
Senor and Singer also credit Israel's immigration laws for its economic achievements. "It is in large part thanks to these immigrants that Israel currently has more engineers and scientists per capita than any other country...Jewish newcomers and their non-Jewish family members are readily granted residency, citizenship, and benefits." This open immigration policy is also responsible for the concept of an "idea factory," which includes both "generating ideas at home and taking advantage of ideas generated elsewhere," write the authors.
Based on their findings, Senor and Singer assert that the United States, and the world, have "much to learn from Israel," especially during the recovery from the recent economic downturn. "Global prosperity had rested on a speculative bubble, not on the productivity increases that economists agree are the foundation of sustainable economic growth," they write. "Israel specializes in high-growth entrepreneurship-start-ups that wind up transforming entire global industries." They argue that the Israeli economic model, based on innovation, can help the United States, in particular, "get out of its economic hole."
Advance Praise for Start-up Nation:
"There is a great deal for America to learn from the very impressive Israeli entrepreneurial model-beginning with a culture of leadership and risk management. Start-Up Nation is a playbook for every CEO who wants to develop the next generation of corporate leaders."
-Tom Brokaw, special correspondent for NBC News, author of The Greatest Generation
"Senor and Singer's experience in government, in business, and in journalism-and especially on the ground in the Middle East-come to life in their illuminating, timely, and often surprising analysis."
-George Stephanopoulos, host of This Week, ABC News
"In the midst of the chaos of the Middle East, there's a remarkable story of innovation. Start-Up Nation is filled with inspiring insights into what's behind Israel's dynamic economy. It is a timely book and a much-needed celebration of the entrepreneurial spirit."
-Meg Whitman, former president and CEO of eBay
"Senor and Singer highlight some important lessons and sound instruction for countries struggling to enter the 21st century. An edifying, cogent report, as apolitical as reasonably possible, about homemade nation building."
"The authors ground their analysis in case studies and interviews with some of Israel's most brilliant innovators to make this a rich and insightful read not just for business leaders and policymakers but for anyone curious about contemporary Israeli culture."
To order, visit: www.cfr.org/startup_nation
Dan Senor, an expert on Iraq, Israeli-Palestinian relations, and Middle East and Persian Gulf geopolitics, security, and economics, is adjunct senior fellow for Middle Eastern studies at the Council on Foreign Relations. Senor is a founding partner of Rosemont Capital. From 2003 to 2004, Senor served in the administration of George W. Bush, as a Pentagon and White House adviser based in Doha, Qatar at U.S. Central Command Forward, and later based in Iraq, where he worked in senior positions for both the Office of Reconstruction and Humanitarian Assistance and the Coalition Provisional Authority. One of the longest serving civilians in Iraq, Senor was awarded the Department of Defense Distinguished Civilian Service Award. Previously, Senor was a foreign policy and communications advisor in the U.S. Senate. He is a frequent writer for the Wall Street Journal, and has also written for the New York Times, the Washington Post, and the Weekly Standard.
Saul Singer is a columnist and former editorial page editor at the Jerusalem Post and the author of Confronting Jihad: Israel's Struggle and the World after 9/11. He has written for the Wall Street Journal, Commentary, Moment, and the New Leader. Before moving to Israel, he served as an adviser to the U.S. Congress.
The Council on Foreign Relations (CFR) is an independent, nonpartisan membership organization, think tank, and publisher dedicated to being a resource for its members, government officials, business executives, journalists, educators and students, civic and religious leaders, and other interested citizens in order to help them better understand the world and the foreign policy choices facing the United States and other countries.