Tuesday, February 22, 2011

Start -Up Nation

Last year Dan Senor and Saul Singer published Start-up Nation: The Story of Israel's Economic Miracle. It's a great read, and doesn't require more than a few hours of pleasurable effort. The starting point for the book is that Israel is a world-class center of innovation, second only to Silicon Valley. There's more technological innovation happening here than on entire continents elsewhere, and the political and military turmoil of the past decade has never dented this. The authors set out to explain this.

First, they state their case, which turns out to be even more compelling than often recognized, since they look not only at the very long list of successful or wildly successful Israeli start-up companies, but also at the centrality of Israeli innovators to the development efforts of some of the world's largest technology companies - Intel, say, or Microsoft. The also show how it's not only high-technology, it's lots of other things, too, such as drip irrigation - not to mention the once famous and now defunct kibbutz movement, which was magnificent in its time, before the world moved on.

They compare Israel's economy to other economies, by way of attempting to identify what's unique about Israel. Since you ought to read the book I won't go through all its arguments, but the bottom line is that Israelis are anti-hierarchical, even in the army; they have no respect for accepted wisdom and even less for its representatives; they're brazen questioners of everything and everyone; but also they've got motivations to succeed that come from being proud of what they are and what they're doing. The Arab boycott and Charles De Gaulle's abrupt ban on military supplies days before the Six Day War, say the authors, must be given credit for at least part of Israel's prowess, since they shut the easy avenues to success, and forced the Israelis to forge new ones, and then, once they had the culture, to keep on forging them.

They also describe how early Israeli innovation was steered by the government, until that lost steam in the early 1970s; they are honest and clear-eyed about the wasted decades between the early 1970s and the early 1990s.

As I said, it's a fun book, and presents an Israel which is much more interesting - and real - than the one which the world's media obsesses about most days of the year (as does this blog). I do however have one significant quibble.

The technology sector of Israel may well be the economy's main motor, and the cultural characteristics which underpin it are all really there, very much thriving. Not all of Israel participates, however. The army really is a crucially important part of the story - but there are other parts of the army which do the exact opposite of encouraging innovation. Many Israelis really do fit the descriptions presented in the book - but more don't. Or at any rate, many don't: I wouldn't know how to quantify it. There are as many conservative and unimaginative plodders in Israel as anywhere else. Thankfully, they don't hamper the mad scientists and iconoclasts out to turn the world on its head; there are enough of them, however, to make Israel a place of growing inequality and considerable waste.

Finally, two minor comments: some of Israel's homegrown detractors, the folks I regularly dislike on this blog, have the same all-around gumption as their engineer cousins. It really is a cultural thing. Also, as anyone who has ever seriously studied the Talmud will attest, some of this ability comes from there. Spend 2,000 years studying Talmud, and it will be astonishing if you don't obsessively see things from novel perspectives and insanely unlikely vantages. 


B said...
This comment has been removed by the author.
Barry Meislin said...

It's like the old joke about Jews (Israelis? Zionists?) being like everyone else...

...only more so.

File under: Double-edged sword(?)

B said...

You could write books on the tiny differences you see between Israeli society and others, or certain cultural traits you see in Israelis that other people don't have, but all successful countries have pretty much the same underlying characteristic: a sizable population(s) that has high intelligence. This is what really matters, everything else is just words.

Israel has the Ashkenazim.

The Ashkenazi population is what the entire country's technology industry pretty much rests on.

Barry Meislin said...


Well, that just proves my point (#2), I guess.

One of the crucial aspects of Up-Start Nation, however, though I don't believe it is mentioned in the book (though the role of military R&D is quite obviously related)---but which CANNOT be emphasized enough, is the debt owed by all Israelis (Ashkenazim, Sfardim, Italkim, Ettiyopim, Anglo-Saxim, Roosim, Droozim, Aravim, Notzrim, Irakim, Temmanim, Mooslamim, others-im, etc.-im), yes, the debt owed by all Israelis to their neighbors.

...with whom life is not always easy, but without whom, life would be intolerable.

(I think that's also an old joke.)

File under: Be careful of what you wish for(?)

Silke said...

I may have all that who is what gotten wrong but somehow I guess this guy doesn't quite qualify as an Ashkenazi and what a great story he has to tell and how wonderfully well he tells it - now if he'd go into politics with that voice and his way of talking not to mention his looks ... but then of course he may be the exception who confirms the rule ;-((((

Shai Agassi about the electric car scheme

- ENJOY! - if you suffer from Apple-allergy the original it is at BBC Radio 4 The Interview.


B said...

I was only talking about average IQ scores. Shai is obviously a genius, and his dad (Reuven Agassi) is from Iraq I think.

Barry Meislin said...

No need to apologize.

Agassi is obviously an Iraqi Ashkenazi.

(Not all Ashkenazim have brilliant senses of direction.)

Silke said...

but he tells in the interview that mommy took care that Daddy and son (without Dad it wouldn't have been as good according to Shai) didn't run out of cash.

Is a sense of how to make money in business (I think she sold clothes) and thus provide for the male geniusses in your family a proof of intelligence?

(how much better off she would have been for years not pumping money in her two genuisses? To let yourself get exploited that way surely is proof against intelligence above average ;-))))))

Don Cox said...

Apart from talent, there is the important question of how easy it is to start a business in various countries. In Iraq, for example, starting a small business takes many months, endless form-filling and lots of bribes. That will put a damper on even a population full of enterprising individuals.

So I presume it must be quite easy to start a business in Israel.

Silke said...

Saul Friedländer has a new book on Pius XII - the original seems to be in German and here is the first review that came my way

Here is a teaser-quote from the book - I think the whole review is interesting enough for a Google translate

Was wir nicht wissen, ist, ob für Pius XII. das Schicksal der Juden Europas eine schwerwiegende Krisensituation und ein quälendes Dilemma darstellte oder ob es für ihn nur ein Randproblem war, welches das christliche Gewissen nicht herausforderte.

what we don't know is, whether for Pius XII the destiny of Europe's Jews was a trying crisis and a painful dilemma or whether it was only a marginal problem for him which didn't challenge his Christian conscience.


Yaacov said...

Don -

When I set up LeverEdge, it took all of two days, but most of the hours of those days I was doing other things. So essentially it took hours. And a few hours of a lawyer's time, too.

Uncle yo-yo said...

Same in the United States -- Couple of hours of your time and a few hundred dollars for filing fees.

Silke said...

so stay clear of the Shai Agassi Interview because he moans about bureaucracy in Israel with the best of them.

On the other hand he says he can't imagine that somebody like Peres would have taken him from office to office to get his scheme going anywhere else ...

Anonymous said...

Good Luck to Shai Agassi .

Has he actually achieved anything so far?

Lots of companies are researching the electric option. There seem to be many thorny problems to overcome as yet. Technically, Business wise and Economically.


Y. Ben-David said...

Don Cox-
What you pointed out about starting a business in Iraq is going to the the big test of the supposedly "new democracies" of the Arab world. Traditionally Arab countries oppose independent entrepeneurship and restrict businesses liscences to a favored few for two reasons:
(1) An independent entrepeneurial class is a major political threat to the existing establishment
(2) The existing Establishment wants the population to feel it is dependent on the good-will of the Establishment for handouts. Thus, most Arab countries give out basic foodstuffs (e.g. bread) for free. That way, people don't want to rock the boat, fearing they may lose what little they have. Of course, we have see the break-down in this system recently. The question is whether the new power structure will really want to do anything different or merely play musical chairs by putting a few new faces into the Establishment to make people think there is some kind of change.

Y. Ben-David said...

I incorrectly said they give out bread for free. Saddam Hussein did this, but in Mubarak's Egypt and nominal small fee is charged for bread. However, it was cheap enough for people who were raising animals to feed them bread than to buy animal feed.