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Is Israel the ‘Start-Up Nation’ Because of Its Security Situation?
The State of Israel is unique — it enjoys significant economic growth while maintaining one of the highest defense burdens of any country in the world. The reason for the high defense expenditure is that Israel has been engaged in a fight for its very existence from the day of its formation. Concurrently with the ongoing threat, Israel’s economy has grown rapidly, averaging around 4% annual growth over the last two decades.
Israel’s growth strategy is directly tied to investments in research, development, and technology. Science and technology have always been perceived by Israel as key factors in the power equation between itself and its surrounding adversaries. Israel’s expenditure on research and development as a proportion of GDP is one of the highest in the world at approximately 5%. The country’s emphasis on science and technology is evident in the high density of scientists and engineers within its population, which easily competes with that of any developed European country.
In its early years, Israel attempted to address its pressing security challenges by developing a national security strategy that emphasized qualitative parameters to neutralize the quantitative gaps vis-à-vis the surrounding enemy states. Soon after the establishment of the state, David Ben-Gurion — Israel’s first prime minister and minister of defense — articulated that due to Israel’s numerical inferiority, it must strive for qualitative superiority. Israel identified science and technology as critical for the accomplishment of this strategy.
Ben-Gurion further asserted that scientific research and technological development were essential not only for security needs, but also for the development of Israel in terms of agriculture, industry, and education. His plan was to enlist the best scientific minds of the Jewish people and to motivate young scientific talents to dedicate their lives to scientific research. They were to be provided with advanced equipment and well-equipped laboratories in fields such as physics and biology, with the expectation that they would align their research efforts towards the security and development of the country.
Given that “big science” involves long development cycles, high uncertainty, substantial risk, and a considerable chance of failure, engaging in extensive private-commercial science and technology projects without state intervention was exceptionally challenging, if not impossible, in the initial decades of Israel’s existence. The necessity for government funding stands out as a primary obstacle for smaller nations seeking to cultivate such capabilities. However, despite the challenges it faced and its status as a small state, Israel managed to overcome these barriers, successfully constructing and advancing a significant technological infrastructure. Israel attributes much of this success to making technological superiority a cornerstone of its national security strategy, which led in turn to the establishment of a well-developed and technologically advanced defense sector.
The end of the 20th century saw a dramatic change in the world’s technological landscape. State-owned technological innovation led primarily by the defense sector shifted towards innovation led by the entrepreneurs and investors of the private sector, establishing what we know today as the start-up age. Today, annual investment in commercial startups worldwide is significantly higher than investment in defense R&D. The private commercial sector dominates technological innovation and the defense sector often “feeds” on these innovations for its own applications, rather than the other way around.
Following this shift in technological dominance and leveraging its highly developed science and technology infrastructure, Israel has managed to position itself as a global source of technological innovation and business entrepreneurship, and is often referred to accordingly as the “Start-Up Nation.” Israel has many hi-tech companies listed on the NASDAQ, the second-largest stock exchange in the world after the New York Stock Exchange. Israel’s presence on the NASDAQ is second only to that of the United States and China. As of the end of 2022, there were over 130 Israeli companies listed on the NASDAQ, which is comparable to those of the British, French, and German companies on the exchange combined.
In the last decade, Israel’s investment in research and development has been the highest in the world relative to GDP by a significant margin. Additionally, Israel’s venture capital fundraising rate is among the highest globally on a per capita basis, and the success rate of its unicorn companies is particularly high. Between 1999 and 2014, approximately 10,000 start-up companies were established in Israel, with 2.6% achieving an annual profit of at least $100 million. In the Global Competitiveness Report for 2018-19, which ranked 141 countries, Israel was first in entrepreneurial culture and second in availability of venture capital. In 2021, investments in Israeli startups reached an unprecedented peak of $26 billion.
Given this context, it might seem reasonable to argue that aligning Israel’s highly developed technological ecosystem with its unique security context may have been relevant in its early decades, but has grown less so with time. This might appear on the surface to be true, as Israel’s economy seems to have extricated itself over the last few decades from the clutch of the defense sector and transformed the country into the “Start-Up Nation” it is today.
But the argument is inaccurate, as the connection between the Israeli hi-tech industry and the Israeli defense sector remains robust. To appreciate why, we need to delve into the Israeli technological ecosystem.
The ties to the defense system, particularly to the IDF, play a pivotal role for the Israeli hi-tech industry. In Israel, most citizens undergo mandatory military service, and after their discharge, many continue on active reserve duty. There is thus a continual interaction between the Israeli civilian and military domains.
This ongoing connection significantly empowers entrepreneurs serving in the IDF’s technological units to introduce novel technologies and devise solutions that can benefit the defense system. These entrepreneurs possess an in-depth personal understanding of that system and can identify its needs, weaknesses, and vulnerabilities. They utilize the training and extensive knowledge they acquired during their military service in the development process to great effect.
In the Israeli hi-tech sector, many of the start-up companies specializing in intelligence and cybersecurity are predominantly staffed by graduates of military technological units like Units 8200 and 81. These start-ups are involved in advancing defense-related technological projects, delivering training to defense entities, and providing prompt responses to the system’s operational needs. In many cases, the products offered by these companies are not generic but are meticulously tailored to meet specific operational requirements. Many projects undertaken by these companies are at the forefront of technological advancement.
To comprehend just how profound is the influence of this phenomenon on the Israeli hi-tech industry, we should examine the two units mentioned above, 8200 and 81. In the late 1990s, the IDF recognized the pivotal role of the cyber domain and took on the challenge of identifying and training suitable human resources. The IDF accordingly instituted unique advanced selection processes to recruit high-quality personnel. The innovative training program and courses transformed these young recruits into true experts in their fields.
Between 2003 and 2010, 100 or so officers and soldiers who completed their service in Unit 81 established around 50 start-up companies, collectively raising over $4 billion. Many of these companies continue to yield substantial revenues, and some have achieved successful exits. Unit 8200 was a major contributor to the emergence of many cybersecurity companies, including the legendary Check Point; Adallom, acquired by Microsoft for $320 million; and Armis, acquired by Accenture for $1.1 billion.
More than 1,000 start-ups have been founded by 8200 alumni. Its graduates are involved not only in cybersecurity start-ups but in many other fields as well, ranging from Waze to Wix to SolarEdge. These examples represent only a small fraction of the broader trend. It is no exaggeration to assert that graduates of these units have significantly shaped the Israeli hi-tech sector over the past decade. These units are a true powerhouse propelling the Israeli hi-tech sector, with a significant portion of the technology they develop flowing back to defense applications.
When analyzing the unique relationship between the IDF and the private commercial hi-tech sector in Israel, we can see that Israel’s unique security situation has created a mechanism through which both parties are so interwoven as to make it difficult at times to tell them apart. It is in Israel’s best interest to continue to nurture this unique relationship, which is beneficial for Israel’s prosperity as well as its security.
Nir Reuven is a researcher at the BESA Center, an engineer, and a former officer in the Merkava development program (the main Israeli battle tank). He has held management positions in the Israeli hi-tech industry and is an expert on technology. Currently he is co-manager of the Sapir College Innovation and Entrepreneurship Center. He is working on his Ph.D. and lectures at Bar-Ilan University. A version of this article was originally published by The BESA Center.
The post Is Israel the ‘Start-Up Nation’ Because of Its Security Situation? first appeared on Algemeiner.com.
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US Supreme Court to Weigh Landmark Terrorism Case Targeting Palestinian Authority’s ‘Pay-for-Slay’ Program
PA President Mahmoud Abbas at the UN General Assembly in New York. Photo: Reuters/Caitlin Ochs
In a case that could redefine the legal landscape for victims of terrorism seeking justice, the US Supreme Court is set to hear arguments against the Palestinian Authority and the Palestine Liberation Organization (PLO) over their role in incentivizing violence against Americans abroad.
The high-profile brief — filed this week by a legal coalition and more than a dozen organizations in response to the 2018 murder of Israeli-American Ari Fuld by a Palestinian terrorist — calls on justices to hold Palestinian leadership accountable for its controversial “pay-for-slay” program.
The amicus brief, submitted on Tuesday by the International Legal Forum (ILF) and 16 other Jewish and pro-Israel organizations, argues that the PA and PLO have long been complicit in orchestrating and financially rewarding acts of terror.
“Since their founding, the PLO and the Palestinian Authority have been an instrumental element in inciting, funding, and rewarding terrorism, especially through the pay-for-slay program,” ILF CEO Arsen Ostrovsky told The Algemeiner. “They are not a powerless bystander but a leading driver of modern-day terrorism. Enough is enough.”
The so-called “pay-for-slay” scheme has been widely condemned by US lawmakers, with reports estimating that approximately 8 percent of the PA’s budget is allocated to paying stipends to convicted terrorists and their families. As outlined in the ILF’s legal filing, “the more deadly the attack and the longer the terrorist spends in prison, the greater the stipends they receive.”
The legal brief contends that the US Congress has clear constitutional authority to permit American victims of Palestinian terrorism to sue the PA and PLO in US courts, since these entities have maintained a presence on American soil and were previously warned that their activities could expose them to legal action. Palestinian leaders “had been on notice that their activities would subject them to jurisdiction, yet have continued to reward and sponsor terrorism regardless,” Ostrovsky said.
The lawsuit was initially filed under the US Anti-Terrorism Act by Fuld’s widow and other American victims of Palestinian terror, seeking damages from the PA and PLO. However, the case faced a major setback in 2023 when the Second Circuit Court of Appeals ruled that US federal courts lack jurisdiction over the Palestinian entities, citing concerns over the due process rights of foreign organizations.
Congress attempted to address this legal gap in 2019 with the passage of the Promoting Security and Justice for Victims of Terrorism Act (PSJVTA), which sought to ensure that the PA and PLO could be held accountable in American courts if they funded attacks against US citizens or conducted activities within the United States. The brief argues that the PA and PLO have done both, and therefore must face legal consequences.
“It is imperative to hold not only Hamas accountable, but the Palestinian leadership as well,” Ostrovsky said. “Acts of terror, such as the one that claimed the life of Ari Fuld, do not occur in a vacuum. They are the direct result of a pervasive Palestinian infrastructure that indoctrinates hate and incentivizes violence.”
The development coincides with an ongoing ceasefire and hostage release deal between Israel and Hamas, which included the release last month of Ari Fuld’s killer, Khalil Jabarin. Ari Fuld’s brother, Hillel Fuld, said the family’s “personal grievance and loss was currently amplified” by Jabarin’s release from prison.
Reflecting on the hostage deal that saw Jabarin walk free — financially secure by Palestinian standards due to the pay-for-slay stipends he received while in prison — Fuld acknowledged that the situation was “not black and white.”
“On the one hand this is a terrible, terrible deal from a strategic perspective, and there’s no sugarcoating the fact that letting go of thousands of monsters is just horrible,” he told The Algemeiner. “The flip side is that it’s the most beautiful thing there is to see those families reunited, and it’s a fundamental pillar of Judaism to free our prisoners, our people, and our soldiers need to know that we will do whatever it takes to bring them back if such a thing happens to them.”
Ostrovsky expressed his hope that the Supreme Court would hold Palestinian leaders accountable and prevent them from “rewarding and underwriting murderers of American nationals abroad, like Ari Fuld.”
The court’s decision to take up the case marks a pivotal moment in US counterterrorism law. If the justices rule in favor of the plaintiffs, it could set a precedent allowing American victims of international terrorism to pursue legal claims against foreign entities that support or enable such attacks. The brief was filed on behalf of ILF by the Holtzman Vogel law firm as well as the National Jewish Advocacy Center, with oral arguments expected later in the year.
The post US Supreme Court to Weigh Landmark Terrorism Case Targeting Palestinian Authority’s ‘Pay-for-Slay’ Program first appeared on Algemeiner.com.
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US Lawmakers Reintroduce Antisemitism Awareness Act
US Rep. Josh Gottheimer (D-NJ) at a press conference in Bergenfield, New Jersey, US on June 5, 2023. Photo: Kyle Mazza/NurPhoto via Reuters Connect
A bipartisan group of US lawmakers on Wednesday reintroduced the Antisemitism Awareness Act, which would mandate the Department of Education to apply the International Holocaust Remembrance Alliance (IHRA) working definition of antisemitism when enforcing federal anti-discrimination laws.
The lawmakers — Reps. Josh Gottheimer (D-NJ), Mike Lawler (R-NY), Max Miller (R-OH), and Jared Moskowitz (D-FL) — reintroduced the legislation after it passed the US House during the last Congress by a vote of 320-91. However, the Senate ultimately opted not to consider the bill in December.
Observers speculated that Sen. Chuck Schumer (D-NY), the Senate leader, feared exposing potential fractures within the Democratic coalition regarding antisemitism and Israel. Following the onset of the Gaza war between Israel and Hamas in October 2023, Democrats have shown inconsistent support for the Jewish state, with some high-profile liberal lawmakers suggesting that Israel’s war against Hamas could be considered a “genocide.” Last November, 17 Democrats voted to implement a partial arms embargo against Israel.
IHRA — an intergovernmental organization comprising dozens of countries including the US — adopted the definition of antisemitism in 2016. Since then, the definition has been widely accepted by Jewish groups and lawmakers across the political spectrum, and it is now used by hundreds of governing institutions, including the US State Department, European Union, and United Nations. Dozens of US states have also formally adopted it through law or executive action.
According to the definition, antisemitism “is a certain perception of Jews, which may be expressed as hatred toward Jews. Rhetorical and physical manifestations of antisemitism are directed toward Jewish or non-Jewish individuals and/or their property, toward Jewish community institutions and religious facilities.” It provides 11 specific, contemporary examples of antisemitism in public life, the media, schools, the workplace, and in the religious sphere. Beyond classic antisemitic behavior associated with the likes of the medieval period and Nazi Germany, the examples include denial of the Holocaust and newer forms of antisemitism targeting Israel such as demonizing the Jewish state, denying its right to exist, and holding it to standards not expected of any other democratic state.
In a statement, Gottenheimer said on Thursday that the “explosion of antisemitic violence” after the Hamas-led Oct. 7, 2023 massacre of 1,200 people in southern Israel inspired him to reintroduce the Antisemitism Awareness Act. He added that the legislation would provide state officials and law enforcement a “clear framework” on how to properly address antisemitic violence.
“Since the heinous Oct. 7 attacks on Israel, we have seen an explosion of antisemitic violence and intimidation on college campuses and in communities across New Jersey and the nation. Far too many in our community no longer feel safe in their own homes or classrooms,” Gottheimer said.
Lawler, a Jewish lawmaker and one of the most strident supporters of Israel in Congress, explained his decision to reintroduce the legislation, writing that “no person should feel unsafe, targeted, or ostracized because of their faith — and the Antisemitism Awareness Act will stop it from happening.”
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‘Hypocrisy Will Be Exposed’: Israeli Defense Chief Calls Out Spain, Ireland, Others Over Trump’s Gaza Plan
Spanish Foreign Minister Jose Manuel Albares (center), Norway’s Foreign Minister Espen Barth Eide (right), and Ireland’s Foreign Minister Micheal Martin (left) gesture after a press conference in Brussels, Belgium, May 27, 2024. Photo: REUTERS/Johanna Geron
Israeli Defense Minister Israel Katz on Thursday warned that the “hypocrisy” of Spain, Ireland, and other European countries hostile to the Jewish state will be exposed if they do not take in Palestinians who choose to leave Gaza, the war-torn enclave that US President Donald Trump has said he intends to rebuild after the population resettles elsewhere for a unknown period of time.
Katz called out several countries in Europe while announcing he had ordered the Israel Defense Forces (IDF) to prepare a plan to allow Gaza residents who wish to leave to exit the enclave voluntarily.
“The people of Gaza should have the right to freedom of movement and migration, as is customary everywhere in the world,” Katz posted on X/Twitter. I welcome President Trump’s bold initiative, which can create extensive opportunities for those in Gaza who wish to leave, assist them in resettling in host countries, and support long-term reconstruction efforts in a demilitarized, threat-free Gaza after Hamas — an effort that will take many years.”
He said his plan would include exit options via land crossings, as well as special arrangements for departure by sea and air, noting that the Palestinian terrorist group Hamas, which controlled Gaza before the current war and remains the strongest faction there absent the Israeli army, has used residents as “human shields” and and now “holds them hostage.”
Katz’s order came two days after Trump said that the US would take over Gaza and develop it economically after Palestinians are safely resettled elsewhere.
I have instructed the IDF to prepare a plan that will allow any resident of Gaza who wishes to leave to do so, to any country willing to receive them.
Hamas has used the residents of Gaza as human shields, built its terror infrastructure in the heart of the civilian population,…
— ישראל כ”ץ Israel Katz (@Israel_katz) February 6, 2025
Global reaction to Trump’s plan was largely negative, with many countries expressing both incredulity and indignation.
Spain, for example, said that Palestinians must stay in Gaza.
“I want to be very clear on this: Gaza is the land of Gazan Palestinians and they must stay in Gaza,” Spanish Foreign Minister Jose Manuel Albares told reporters on Wednesday. “Gaza is part of the future Palestinian state Spain supports and has to coexist guaranteeing the Israeli state’s prosperity and safety.”
Katz took issue with countries that have been vocal critics of Israel and portrayed themselves as staunch defenders of the Palestinians taking such a stance.
“Countries such as Spain, Ireland, Norway, and others, which have falsely accused Israel over its actions in Gaza, are legally obligated to allow Gazans to enter their territory,” Katz said in his social media post. “Their hypocrisy will be exposed if they refuse. Meanwhile, countries like Canada, which has a structured immigration program, have previously expressed willingness to take in residents from Gaza.”
Albares rejected Katz’s suggestion that Spain should accept displaced Palestinians.
“Gazans’ land is Gaza and Gaza must be part of the future Palestinian state,” Albares said in an interview with Spanish radio station RNE.
Meanwhile, a spokesperson for the Irish Foreign Ministry told the Turkish state-run Anadolu Agency on Thursday that Katz’s post was “unhelpful and a source of distraction,” adding, “The objective must be that the people of Palestine return safely to their home.”
Israeli Foreign Minister Gideon Sa’ar said during a press conference on Wednesday that Gaza under Hamas rule has been a “failed experiment, adding, “As long as immigration is voluntary and there is a country willing to accept them, can anyone really say it’s immoral or inhumane?”
“עזה זה ניסוי שנכשל” – שר החוץ גדעון סער נואם במליאה: “כל עוד הגירה מתבצעת מרצונו החופשי של אדם, וכל עוד יש מדינה שמוכנה לקלוט את אותו אדם, מישהו יכול להגיד שזה לא מוסרי ולא אנושי?” @gidonsaar pic.twitter.com/VxNy7jSdZC
— ערוץ כנסת (@KnessetT) February 5, 2025
Since Hamas started the Gaza war with its invasion of and massacre across southern Israel on Oct. 7, 2023, both Spain and Ireland have been fierce critics of the Jewish state.
In the aftermath of the Oct. 7 atrocities, Spain launched a diplomatic campaign to curb Israel’s military response. At the same time, several Spanish ministers in the country’s left-wing coalition government issued pro-Hamas statements and called for an immediate ceasefire in Gaza, with some falsely accusing Israel of “genocide.”
More recently, Spanish officials said they would not allow ships carrying arms for Israel to stop at its ports. The US Federal Maritime Commission recently opened an investigation into whether Spain, a NATO ally, has been denying port entry to cargo vessels reportedly transporting US weapons to Israel.
Spain stopped its own defense companies from shipping arms to Israel in October 2023.
One year later, Spanish Prime Minister Pedro Sanchez urged other members of the EU to suspend the bloc’s free trade agreement with Israel over its military campaigns against Hamas in Gaza and the terrorist organization Hezbollah in Lebanon.
Sanchez’s demand came three days after the Spanish premier urged other countries to stop supplying weapons to the Jewish state.
In Ireland, meanwhile, President Michael D. Higgins used his platform speaking at a Holocaust commemoration last month to launch a tirade against Israel’s military campaign targeting Hamas terrorists, appearing to draw parallels between Israel’s war in Gaza and the Nazi genocide of Jews during the Holocaust.
The speech came against a backdrop of strained Irish-Israeli relations, exacerbated by Ireland’s decision to join South Africa’s genocide case against Israel at the International Court of Justice (ICJ) and its support for redefining genocide in order to secure a conviction against Jerusalem.
In December, Israel announced it was shuttering its embassy in Dublin, accusing the Irish government of undermining Israel at international forums and promoting “extreme anti-Israel policies.”
Last month, Israel announced it was shuttering its embassy in Dublin, accusing the Irish government of undermining Israel at international forums and promoting “extreme anti-Israel policies.”
In October, Irish leaders called on the EU to “review its trade relations” with Israel after the Israeli parliament passed legislation banning the activities in the country of UNRWA, the United Nations agency responsible for Palestinian refugees, because of its ties to Hamas.
Spain and Ireland, along with Norway, officially recognized a Palestinian state in May, claiming the move was accelerated by the Israel-Hamas war and would help foster a two-state solution to the Israeli-Palestinian conflict. Israeli officials described the decision as a “reward for terrorism.”
The post ‘Hypocrisy Will Be Exposed’: Israeli Defense Chief Calls Out Spain, Ireland, Others Over Trump’s Gaza Plan first appeared on Algemeiner.com.
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