A vibrant ‘start-up’ ecosystem is alive and well in Israel. The robust Israeli economy is centred on the incubation, acceleration and development of technology companies.
In 2015, Israeli start-ups made $9.5 billion in exits and 150 Israeli companies are listed on the NASDAQ (third largest next to China and the US).(1)
Israel is a relatively young country, that has had waves of immigration and its residents are used to making do with very little. Australia on the other hand has been comfortably seduced by the traditional economies of mining, agriculture and property.(2)
The idea that the Australian economy will continue to prosper is a misnomer that the Australian government has correctly identified and needs to change. Turnbull’s National Innovation and Science Agenda, worth $1.1 billion over four years (3) is a step in the right direction – looking to alternative and innovative industries to ensure we maintain a high standard of living and continue to grow our economy. Technology is driving the future of the world, and Australia needs more investors to take more risks. This era is no longer about traditional real estate or a commodity play – it’s a different landscape and we need to take calculated risks and accept the failure rates.(4)
The factors that contribute to Israel’s vibrant startup ecosystem include taxation incentives for investors, government co-funding arrangements and the mental strength to ‘have a go’, regardless of the risk of failure. Israeli universities collaborate with the commercial sector, streamlining the creation of an idea through development, application and on to commercialisation. This is an area in which Australia can develop to its advantage.
An improved integration between universities and commerce will help to ensure the fast tracking of technology development by providing an improved access to funding and commercial know how.
Israel’s anti-establishment mentality is similar to that in Australia, along with the ‘have a go’ attitude. Maybe it’s the compulsory military training for the young people, and the threat from hostile neighbours that gives them the edge on risk taking, but one thing that Israel does better than us here in Australia is celebrate success. Economic wealth and success is encouraged in Israel, unlike in Australia where our tall poppy syndrome discourages the celebration of economic wealth and prosperity.
Israel provides us with a workable model for how to develop a successful start-up ecosystem; however I don’t think Australia is quite ready to embrace all of these characteristics due to our differing cultures, resulting from our geographical and political situations.
Otsana Capital is an independent advisor to Australian and multinational corporations, providing quality transaction execution skills and advisory services in relation to a range of corporate situations. Otsana has recently partnered with Israeli industry veteran Eran Gilboa, to establish a presence in Israel to provide numerous innovative start-ups with end-to-end services for listing on the ASX. www.otsana.com
References
1.https://yourstory.com/2016/07/israel-startup-ecosystem/
2.http://www.smh.com.au/small-business/startup/what-australia-can-learnfrom-the-israeli-startup-ecosystem-20161026-gsasn7.html
3.http://www.innovation.gov.au/
4.http://www.smh.com.au/small-business/startup/what-australia-can-learnfrom-the-israeli-startup-ecosystem-20161026-gsasn7.html