Israel’s lack of natural resources drives its reliance on intellectual property, and the government is committed to technological growth to drive success in security and the economy, said Inon Elroy, Israel’s economic minister to North America.
“We invest quite a bit in technology when it comes to minorities,” such as Arabs, Elroy said at the Atlanta-Israel FinTech Innovation Conference. “A company with a founder from one of those groups has an advantage today within our major support schemes, which is the Innovation Authority. We invest $400 million annually in technology companies.”
The Israeli culture is also more risk-oriented, said Yoav Tzruya, a partner and the CEO of JVP Cyber Labs. Citizens who join the Israel Defense Forces usually come out of the military with no spouse, no student loans and a desire to outdo their tech predecessors.
That mentality contributes to a climate that encourages growth and innovation, Tzruya said.
“It’s very different than in the U.S., where people get their first real job in their 30s and spend 40 years at a company, he said. “It’s not good for innovation and entrepreneurship and doesn’t translate into growth.”
Israel is No. 3 in the world for startups per capita.
Omri Dotan, a co-founder of Wisor, which is moving mortgage lending from standardized to personalized loans, said what differentiates Israel is the government’s commitment to training tech experts and developing leadership skills.
“Military, military, military,” Dotan said. “People do crazy stuff in the army, like hacking. … They get graduate and Ph.D. training in the military, and when they come out, they’re the smartest of the smartest.”
Dotan, who led 70 people while serving in the IDF, then lived in California for 10 years, said Israel is different from the United States in the way it values leadership skills cultivated in the military.
“In the U.S., soldiers aren’t put on a pedestal. Soldiers know what it is like to be under fire and turn a square into a circle. They have the skills of a Harvard grad,” Dotan said. “Soldiers that come back from war know how to work with people and lead people, and these things are invaluable.”
Israel also has a culture of sharing that is missing from America and Europe, especially among competitive businesses, Dotan said. “In Israel, you don’t feel threatened by other companies. We introduce each other to investors.”
Digitalization is becoming more important and geography less critical, Elroy said. Therefore, someone who doesn’t live in the city can work for and become successful at a tech company.
Technology is also a gateway for those who may have economic disadvantages because all they need is a computer, and Israel, with its commitment to technology, provides the rest.
“As the idea of the startup is so spread and the success of the people is very inspiring, many young people who didn’t necessarily grow up in the middle of Tel Aviv or go to the best school try to get in on prosperity,” Elroy said.