On Wall Street’s Nasdaq exchange, emerging economic powerhouse India has three companies listed. Japan has six, Canada has 48.
Israel has 63.
Tiny and facing perennial adversity, Israel has grown a spectacularly successful entrepreneurial economy, with
$2 billion in foreign venture capital invested there in 2008. That’s as much as Britain took in.
Today the country has the highest density of startups in the world (3,850, or one startup for every 1,844 Israelis). Over the last few decades, Israel’s high-tech innovations have spread globally.
Dan Senor wants to make sure people know this. That’s why the former Bush administration official co-wrote “Start-Up Nation: The Story of Israel’s Economic Miracle.”
Senor, 38, will speak about his book and the Israeli economy 8 p.m. Thursday, Jan. 21 at the Jewish Community Center of San Francisco.
“People find it refreshing to have a discussion about Israel that is not conflict-centric,” said Senor. “While so much of the debate is about the threats and the moral obligation that the world has to Israel, there’s another part of the narrative: what the world can learn from Israel. That’s what we focus on.”
“We” is Senor and his Israel-based co-author, journalist Saul Singer, who is also Senor’s brother-in-law. Together, the two interviewed more than 100 inventors, entrepreneurs, CEOs, venture capitalists and government officials in order to tell the tale.
The authors learned certain conditions unique to Israel have contributed to the country’s mega-million-dollar success. Among factors they cite: Israel’s pervasive military culture, which fosters independence and quick-minded originality; that Israel is forced by regional conflict to export to the world; and Israelis’ ability to innovate on the fly.
For example, drip irrigation was invented when a farmer in the Negev desert noticed one of his trees flourishing despite drought conditions. When he discovered a leaky underwater pipe, he had a eureka moment, developing a technology that spread around the world.
“They knew they had to be an export economy,” Senor said. “They are very good at producing small enterprises with radical solutions to big problems. [Israel] focused on small goods, and what’s the smallest? Information technology.”
Those innovations include everything from PC anti-virus software to AOL Instant Messenger and the Intel Pentium microprocessor chip. Israelis also created medical devices such as radiation-free breast cancer diagnostics and the “Gut Cam,” an ingestible pill video camera that diagnoses abnormalities.
Israel’s economic gains come despite constant threat of war and terrorism. Somehow those threats have not scared off the venture capitalists nor dimmed Israeli innovation.
Senor cites the period between 2000 and 2006, during which the second intifada took place, Israel disengaged from Gaza, and the second Lebanon war raged, with Hezbollah rockets raining down on northern Israel.
“Israel’s share of the global venture-capital pie doubled,” he said. “Israel managed to persuade investors to decouple the security threat from the economic situation.”
Senor, who earned his MBA at Harvard, is an old hand on Israel and the Middle East. During the Bush administration, he served in Iraq as chief spokesperson for the Coalition Provisional Authority in the period after the American invasion, and he remains an on-screen analyst for Fox News.
He divides much of his time working as an adviser to a global investment firm and as an adjunct senior fellow with the Council on Foreign Relations. Senor is married to CNN anchor Campbell Brown.
Senor can’t help taking Israel’s high-tech success personally. His late father worked for Israel’s Weizmann Institute of Science, where he helped develop a solar energy program.
Israel’s gains help offset global efforts to wound the Jewish state politically — even in Europe, arguably the center of anti-Israel invective after the Muslim world, he said.
“Many political parties in Europe try to organize boycotts,” he noted. “Good luck persuading the European venture capital community.”
“Start-Up Nation: The Story of Israel’s Economic Miracle” by Dan Senor and Saul Singer (304 pages, Twelve Books, ($26.99)
Dan Senor will speak 8 p.m. Thursday, Jan. 21, at the JCCSF, 3200 California St., S.F. Tickets: $10-$18. Information:(415) 292-1200 or online at jccsf.org.