JOHANNESBURG - Over the past 70 years, Israel has been transformed from a desert nation into one of the world's most prolific tech innovation hubs. Today, Israel can lay claim to having the highest number of venture capitalists and tech start-ups per capita in the world.
Global tech giants such as Google, Facebook, Microsoft and Intel also have a presence in the capital, Tel Aviv, or have made significant investments in the country. It's an impressive achievement given the country's relatively small population of roughly 8,400,000 inhabitants.
Annually, together with clients, Popimedia tours a destination famous for innovation, with the objective of gathering important lessons that we can import into our own businesses back home. Tel Aviv was the destination for our 2018 Innovation Tour - a city becoming something of a pilgrimage destination for start-up execs from around the world, looking to uncover the secret to the region's success.
Contributing factors
Some attribute Israel’s transformation to the impact of considered government reforms, which shunned socialist policies and paved the way for a free-market economy that is more conducive to business incubation and grassroots development. Another theory suggests that the nation's success has more to do with its culture and the mindset of its people.
Some learn a surprising truth: It is the military that plays a large role in fostering this culture of innovation. It's a concept that was explored in great depth in a 2009 book by Dan Senor and Saul Singer, titled 'Start-Up Nation'.
Aside from the investment into R&D made by the military, and the country's entrenched globalised growth mindset – this has been fostered as Israel's population is too small to support any meaningful business growth, it has no natural resources, and its geographical location between hostile nations has necessitated a focus on self-reliance – the book highlights the influence that Israel's conscription laws have had on the accelerated development of the country's youth.
The power of youth
It is compulsory for Israelis to perform military duty from the age of 18. While tenure in the armed forces can differ for individuals based on their rank, everyone who enters the service will develop some form of technical expertise, and will be conditioned according to a strict set of principles and values.
This, argues the authors, is what shapes the entrepreneurial mindset, and the skill sets of Israelis, all from an early age. This also imbues teenagers with advanced problem-solving skills, and an understanding of the importance of collaboration and teamwork.
Independence, enlightenment, responsibility
More importantly, the institutionalised culture within the Israeli armed forces is not one of authoritarianism. Rather, it fosters a culture of independence and inquisitiveness; one where young Israelis are taught to question authority to understand the rationale behind an order or command. And it is this pervasive mindset that is often cited as the greatest catalyst for Israel's mastery of hi-tech innovation.
The influence of this military training is most evident in the leadership of the country's most successful start-ups, many of which are led by former members of Israeli special forces. The system identifies exceptional thinkers and intellectual outliers from as early an age as 14, and mentors those with the right combination of traits for higher order roles within the military.
Following their conscription into the army, these individuals are then deployed to specialised areas within the armed forces, where they help to drive innovation, or are trained at an elite level. When these individuals leave the service they boast a unique skills set, hold vast experience, and have a heightened sense of responsibility and a propensity to lead. It's not surprising then, that many of the start-up CEOs you'll likely meet in Israel are former members of elite special forces.
Look anywhere else in the world, including South Africa, and you'll find a vastly different young adult archetype. School leavers or those who have just graduated from tertiary institutions have had little or no experience with managing teams, and few have had to deal with the pressure and burden of significant responsibility when they first enter the workplace.
The relationship with ‘failure’
The trajectory of young Israelis is vastly different. Armed with what is commonly termed chutzpah – defined as extreme self-confidence, or audacity – Israelis are unafraid to doggedly pursue any business idea, even if it fails. In fact, they embrace failure, choosing to learn from it and openly share their experiences so that others can benefit from their experience. There is deep respect in the courage to move forward, and no shame in failure - it is viewed more as a stepping stone than an end-point.
More importantly, Israelis are relentless. They all hustle and constantly push the envelope, because they know that if they stop, even for a moment, there's another highly-driven individual who will leapfrog them and take their place. They therefore commit to getting the job done, constantly responding to the survival instinct that is drummed into them during their army service.
Lessons
My hi-tech sojourn to Israel, has left me with important life and business lessons. Primary among these is the need to surround yourself or associated with the smartest people you can find.
As a business owner you need to leverage the intellectual property of your staff, partners and suppliers, because in this globalised economy you are competing against the calibre of entrepreneurs found in Israel. You therefore need to empower your business with that same level of competence to remain competitive.
The other indelible lesson I've learnt is the powerful role that the culture and mindset of the people you employ play in the success of your business. The mindsets we encountered in Tel Aviv were those of urgency, curiosity, problem solving, and defiance in the face of adversity. Cultivating such a culture in a start-up will change the trajectory of your business.
Daniel Levy is the co-founder and CEO at Popimedia.
The views expressed here are not necessarily those of Independent Media.
BUSINESS REPORT