A look inside 'Start-Up Nation'
Title: Start-Up Nation: The Story of Israel's Economic Miracle
Authors: Dan Senor and Saul Singer
Publisher: Twelve, 2009
ISBN-13: 978-0446541466, 320 pages
Review: Start-Up Nation
By Thomas Bergen, getAbstract
Innovation and venture capital are the main engines for creating individual and national wealth. Take Israel, for example, say authors Dan Senor and Saul Singer, who portray the nation as a blueprint for how to launch innovative ventures. They profile the cultural, military and economic characteristics that make it the world's most entrepreneurial nation. This uplifting, inspiring business story explains how Israeli entrepreneurs overcame significant challenges and analyzes how a country's culture influences its business climate. getAbstract finds that this well-informed text offers solid lessons about maintaining national competitiveness in the 21st century.
Radically new ideas
Israel deliberately focuses its national assets on innovation and entrepreneurship. It has one of the highest levels of research and development of any nation and a higher concentration of engineers and scientists than any other country. A land of early adopters, Israel is the world's top Internet user and has the highest density of business start-ups: 3,850, or "one for every 1,844 Israelis." It leads the way in technological innovation, and it excels at launching start-up businesses and building them up to Nasdaq-level. Israel has more Nasdaq-listed corporate headquarters than Europe, and it draws many international investors. Israel attracted $2 billion in venture capital in 2008, which, on a per capita basis, was akin to the investment that went to the United Kingdom, or to Germany and France combined. In 2008, venture capitalists invested 2.5 times more per capita in Israel than in the United States.
Israel, with its 7.1 million population, is a bastion of entrepreneurship, but that was not always the case. After the United Nations vote that established the state in 1948, Israel's neighbors attacked it and inflicted immense wartime losses. When it achieved independence, Israel had a low standard of living--comparable to America in 1800. Since then, Israel's economy has grown significantly. It has fought three more wars, experienced a fivefold increase in population and greatly increased its economic standing. Its record is "unmatched in the economic history of the world," says economist Gidi Grinstein. In fact, Israel's experience as an incubator of new companies demonstrates techniques that may be useful in other nations, especially the U.S., where the rate of innovation has declined. The U.S. can correct this drop by fostering start-ups, which create jobs, and by refocusing on technological innovation, which drives growth and productivity.
For an example of Israeli innovation, look no further than computer-chip giant Intel, which benefited significantly when Israeli engineers invented a new chip design now used in Intel's Centrino and the Core 2 Duo chips. Intel's U.S. managers initially rejected the concept behind these landmark chips. To win their acceptance, Israeli scientists had to convince Intel that basing chip performance on clock speed--how many times a chip could switch on and off per second--was the wrong benchmark, since more speed requires more energy and produces more heat. Israeli engineers designed a system with a slower chip speed that split the stream of instructions coming into the chip. This reduced the heat, improved performance and saved energy. Israeli engineers used persistent testing and campaigning to convince Intel of the wisdom of using the "mobility" chip. Israel's mobility chip division now produces nearly half of Intel's revenues.
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Posted by: llog63 | December 3, 2010 9:46 AM