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Tech Innovation
In a recent webinar, Avi Hasson, CEO at Startup Nation Central, spoke to Greg Poole, Global Head of Knowledge Network Content Distribution at UBS. The following is based on that conversation. The full webinar can be found here.
When examining the unique characteristics of Israeli innovation, one prominent trait stands out—what I like to call “impatient innovation.”
While patience is widely considered a virtue, impatience is often seen less positively. Israelis, to be frank, are notoriously impatient. This stems from living in a country without the luxury of space, time, or security. This urgency, however, is quite beneficial for fostering innovation.
As global challenges become more complex and governments and large companies sometimes struggle to respond effectively, innovation must play a crucial role. And traditional hierarchies, processes, and risk aversion can hinder this progress.
Impatient innovation means not waiting for full certainty before acting, not for the green light, and disregarding protocol and hierarchy. Intel, for example, is one of the 450 companies that have built innovation centers in Israel, manufacturing semiconductors and chips. Even in such process-oriented industries, Israelis approach tasks with audacity and a meritocratic focus on results, often without waiting for full certainty.
My 30 years of experience led me to believe that the world could benefit from a dose of this mindset. Israeli innovators, true to our moniker as the Startup Nation, are driven to find solutions quickly, make an impact, and change the world. Even our researchers and scientists embody this sense of impatience, making this characteristic a significant aspect of Israeli innovation.
Israel’s journey to becoming a hub of innovation is unique. Despite being a small country with less than 10 million people, far from any large market, and with many challenges, such as a lack of natural resources and a historically socialistic and closed economy, Israel has transformed into a knowledge economy – it only took us 30 years to become an “instant” success.
About 18% of Israel’s GDP comes from high tech, double the share in the U.S. and triple that of the EU. Approximately 13% of our workforce is employed in the high-tech industry. Half of our exports and 30% of our income taxes come from high tech. We lead the world in annual research and development spending, at about 6% of our GDP, excluding defense R&D. This impressive ecosystem is built on a foundation of talent, startups, and venture capital.
How did we achieve this?
A combination of cultural characteristics, such as impatience and chutzpah—a mix of boldness and confidence—played a significant role. Historically, Israel has always been a Problem-Solving Nation, dealing with existential challenges by leveraging technology, research, and innovation. This foundation laid the groundwork for our current high-tech prowess.
In addition to culture, Israel has developed a well-functioning infrastructure to foster a successful innovation ecosystem. This began in the 1980s with a series of pivotal events, including economic reform, opening Israel to the global economy, and establishing the R&D Law and the Office of the Chief Scientist. These events, coupled with a culture of impatience, catalyzed our transformation. Public-private partnerships were crucial, combining the strengths of the private sector with smart policies.
The rise of internet and mobile technologies, combined with a massive influx of skilled immigrants from the former Soviet Union and the creation of a venture capital industry, likewise propelled Israel into the high-tech era. We harnessed our innovation to achieve commercial and economic benefits, leading to today’s thriving ecosystem.
Today, we have one of the largest startup ecosystems in the world, with more than $60 billion raised in the past three years.
While cybersecurity remains a cornerstone, Israeli innovation is diversifying. Our solutions are not just about creating the next best app but about solving real, pressing problems: Israeli startups are making significant strides in sectors like climate tech, agrifood tech, health tech, and cybersecurity.
We have tripled the number of climate tech startups in recent years, from about 300 to over 900, spanning solutions from energy efficiency to data analytics and supply chain optimization.
Agrifood tech is another strong sector, with Israeli companies like Aleph Farms leading the way in alternative proteins and cultivated meat. Health tech has also evolved, leveraging digital health, AI, and sensors to drive innovation.
At Startup Nation Central, we facilitate strategic partnerships that enhance collaboration between global entities and Israel’s tech ecosystem. This creates ideal conditions for high-potential investments, allowing real climate, agrifood, and health tech solutions to be tested, adopted, and scaled effectively.