Connect with us

RSS

Is Israel the ‘Start-Up Nation’ Because of Its Security Situation?

The Western Wall and Temple Mount in Jerusalem. Photo: Wikimedia Commons.

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.

Continue Reading
Click to comment

You must be logged in to post a comment Login

Leave a Reply

RSS

Letter from Vancouver: A monument draws on Jewish tradition to remember victims of Oct. 7

The garden of Temple Sholom Synagogue in Vancouver is a serene and contemplative place to remember the horrific events of Oct. 7, 2023—and the Israeli civilians, soldiers and foreign nationals who […]

The post Letter from Vancouver: A monument draws on Jewish tradition to remember victims of Oct. 7 appeared first on The Canadian Jewish News.

Continue Reading

RSS

Israel-Lebanon Ceasefire Deal ‘Tantamount to a Hezbollah Defeat,’ Says Leading War Studies Think Tank

Israeli tanks are being moved, amid cross-border hostilities between Hezbollah and Israel, in the Golan Heights, Sept. 22, 2024. Photo: REUTERS/Jim Urquhart

The terms of the newly minted ceasefire agreement to halt fighting between Israel and Hezbollah amounts to a defeat for the Lebanese terrorist group, although the deal may be difficult to implement, according to two leading US think tanks.

The deal requires Israeli forces to gradually withdraw from southern Lebanon, where they have been operating since early October, over the next 60 days. Meanwhile, the Lebanese army will enter these areas and ensure that Hezbollah retreats north of the Litani River, located some 18 miles north of the border with Israel. The United States and France, who brokered the agreement, will oversee compliance with its terms.

The Institute for the Study of War (ISW), in conjunction with the American Enterprise Institute’s Critical Threats Project (CTP), explained the implications of the deal on Tuesday in their daily Iran Update, “which provides insights into Iranian and Iranian-sponsored activities that undermine regional stability and threaten US forces and interests.” Hezbollah, which wields significant political and military influence across Lebanon, is the chief proxy force of the Iranian regime.

In its analysis, ISW and CTP explained that the deal amounts to a Hezbollah defeat for two main reasons.

First, “Hezbollah has abandoned several previously-held ceasefire negotiation positions, reflecting the degree to which IDF [Israel Defense Forces] military operations have forced Hezbollah to abandon its war aims.”

Specifically, Hezbollah agreeing to a deal was previously contingent on a ceasefire in Gaza, but that changed after the past two months of Israeli military operations, during which the IDF has decimated much of Hezbollah’s leadership and weapons stockpiles through airstrikes while attempting to push the terrorist army away from its border with a ground offensive.

Additionally, the think tanks noted, “current Hezbollah Secretary General Naim Qassem has also previously expressed opposition to any stipulations giving Israel freedom of action inside Lebanon,” but the deal reportedly allows Israel an ability to respond to Hezbollah if it violates the deal.

Second, the think tanks argued that the agreement was a defeat for Hezbollah because it allowed Israel to achieve its war aim of making it safe for its citizens to return to their homes in northern Israel.

“IDF operations in Lebanese border towns have eliminated the threat of an Oct. 7-style offensive attack by Hezbollah into northern Israel, and the Israeli air campaign has killed many commanders and destroyed much of Hezbollah’s munition stockpiles,” according to ISW and CTP.

Some 70,000 Israelis living in northern Israel have been forced to flee their homes over the past 14 months, amid unrelenting barrages of rockets, missiles, and drones fired by Hezbollah in Lebanon. Hezbollah began its attacks last Oct. 8, one day after the Palestinian terrorist group Hamas’s invasion of and massacre across southern Israel. The Jewish state had been exchanging fire with Hezbollah but intensified its military response over the past two months.

Northern Israelis told The Algemeiner this week that they were concerned the new ceasefire deal could open the door to future Hezbollah attacks, but at the same time the ceasefire will allow many of them the first opportunity to return home in a year.

ISW and CTP also noted in their analysis that Israel’s military operations have devastated Hezbollah’s leadership and infrastructure. According to estimates, at least 1,730 Hezbollah terrorists and upwards of 4,000 have been killed over the past year of fighting.

While the deal suggested a defeat of sorts for Hezbollah and the effectiveness of Israel’s military operations, ISW and CTP also argued that several aspects of the ceasefire will be difficult to implement.

“The decision to rely on the Lebanese Armed Forces (LAF) and UN observers in Lebanon to respectively secure southern Lebanon and monitor compliance with the ceasefire agreement makes no serious changes to the same system outlined by UN Security Council Resolution 1701, which ended the 2006 Israel-Hezbollah war,” they wrote.

Resolution 1701 called for the complete demilitarization of Hezbollah south of the Litani River and prohibited the presence of armed groups in Lebanon except for the official Lebanese army and the UN Interim Force in Lebanon (UNIFIL).

This may be an issue because “neither the LAF nor the UN proved willing or able to prevent Hezbollah from reoccupying southern Lebanon and building new infrastructure. Some LAF sources, for example, have expressed a lack of will to enforce this ceasefire because they believe that any fighting with Hezbollah would risk triggering ‘civil war,’” the think tanks assessed.

Nevertheless, the LAF is going to deploy 5,000 troops to the country’s south in order to assume control of their own territory from Hezbollah.

However, the think tanks added, “LAF units have been in southern Lebanon since 2006, but have failed to prevent Hezbollah from using the area to attack Israel.”

The post Israel-Lebanon Ceasefire Deal ‘Tantamount to a Hezbollah Defeat,’ Says Leading War Studies Think Tank first appeared on Algemeiner.com.

Continue Reading

RSS

What Nutmeg and the Torah Teach Us About Securing a Long-Term Future

A Torah scroll. Photo: RabbiSacks.org.

Here’s a fact from history you may not know. In 1667, the Dutch and the British struck a trade deal that, in retrospect, seems so bizarre that it defies belief.

As part of the Treaty of Breda — a pact that ended the Second Anglo-Dutch War and aimed to solidify territorial claims between the two powers — the Dutch ceded control of Manhattan to the British.

Yes, that Manhattan — the self-proclaimed center of the universe (at least according to New Yorkers), home to Wall Street, Times Square, and those famously overpriced bagels.

And what did the Dutch get in return? Another island — tiny Run, part of the Banda Islands in Indonesia.

To put things in perspective, Run is minuscule compared to Manhattan — barely 3 square kilometers, or roughly half the size of Central Park. Today, it’s a forgotten dot on the map, with a population of less than 2,000 people and no significant industry beyond subsistence farming. But in the 17th century, Run was a prized gem worth its weight in gold — or rather, nutmeg gold.

Nutmeg was the Bitcoin of its day, an exotic spice that Europeans coveted so desperately they were willing to risk life and limb. Just by way of example, during the early spice wars, the Dutch massacred and enslaved the native Bandanese people to seize control of the lucrative nutmeg trade.

From our modern perspective, the deal seems ridiculous — Manhattan for a pinch of nutmeg? But in the context of the 17th century, it made perfect sense. Nutmeg was the crown jewel of global trade, and controlling its supply meant immense wealth and influence. For the Dutch, securing Run was a strategic move, giving them dominance in the spice trade, and, let’s be honest, plenty of bragging rights at fancy Dutch banquets.

But history has a funny way of reshaping perspectives. What seemed like a brilliant play in its time now looks like a colossal miscalculation — and the annals of history are filled with similar trades that, in hindsight, make us scratch our heads and wonder, what were they thinking?

Another contender for history’s Hall of Fame in ludicrous trades is the Louisiana Purchase. In 1803, Napoleon Bonaparte, who was strapped for cash and eager to fund his military campaigns, sold a vast swath of North America to the nascent United States for a mere $15 million. The sale included 828,000 square miles — that’s about four cents an acre — that would become 15 states, including the fertile Midwest and the resource-rich Rocky Mountains.

But to Napoleon, this was a strategic no-brainer. He even called the sale “a magnificent bargain,” boasting that it would “forever disarm” Britain by strengthening its rival across the Atlantic. At the time, the Louisiana Territory was seen as a vast, undeveloped expanse that was difficult to govern and defend. Napoleon viewed it as a logistical burden, especially with the looming threat of British naval power. By selling the territory, he aimed to bolster France’s finances and focus on European conflicts.

Napoleon wasn’t shy about mocking his enemies for their mistakes, once quipping, “Never interrupt your enemy when he is making a mistake.” But in this case, it’s tempting to imagine him swallowing those words as the United States grew into a global superpower thanks, in no small part, to his so-called bargain.

While he may have considered Louisiana to be a logistical headache — too far away and too vulnerable to British attacks — the long-term implications of the deal were staggering. What Napoleon dismissed as a far-off backwater turned out to be the world’s breadbasket, not to mention the backbone of America’s westward expansion.

Like the Dutch and their nutmeg gamble, Napoleon made a trade that no doubt seemed brilliant at the time — but, with hindsight, turned into a world-class blunder. It’s the kind of decision that reminds us just how hard it is to see past the urgency of the moment and anticipate the full scope of consequences.

Which brings me to Esav. You’d think Esav, the firstborn son of Yitzchak and Rivka, would have his priorities straight. He was the guy — heir to a distinguished dynasty that stretched back to his grandfather Abraham, who single-handedly changed the course of human history.

But one fateful day, as recalled at the beginning of Parshat Toldot, Esav stumbles home from a hunting trip, exhausted and ravenous. The aroma of Yaakov’s lentil stew hits him like a truck. “Pour me some of that red stuff!” he demands, as if he’s never seen food before.

Yaakov, never one to pass up an opportunity, doesn’t miss a beat.

“Sure, but only in exchange for your birthright,” he counters casually, as if such transactions are as common as trading baseball cards. And just like that, Esav trades his birthright for a bowl of soup. No lawyers, no witnesses, not even a handshake — just an impulsive decision fueled by hunger and a staggering lack of foresight.

The Torah captures the absurdity of the moment: Esav claims to be “on the verge of death” and dismisses the birthright as worthless. Any future value — material or spiritual — is meaningless to him in that moment. All that matters is satisfying his immediate needs.

So, was it really such a terrible deal? Psychologists have a term for Esav’s behavior: hyperbolic discounting a fancy term for our tendency to prioritize immediate rewards over bigger, long-term benefits.

It’s the same mental quirk that makes splurging on a gadget feel better than saving for retirement, or binge-watching a series more appealing than preparing for an exam. For Esav, the stew wasn’t just a meal — it was the instant solution to his discomfort, a quick fix that blinded him to the larger, long-term value of his birthright.

It’s the classic trade-off between now and later: the craving for immediate gratification often comes at the expense of something far more significant. Esav’s impulsive decision wasn’t just about hunger — it was about losing sight of the future in the heat of the moment.

Truthfully, it’s easy to criticize Esav for his shortsightedness, but how often do we fall into the same trap? We skip meaningful opportunities because they feel inconvenient or uncomfortable in the moment, opting for the metaphorical lentil stew instead of holding out for the birthright.

But the Torah doesn’t include this story just to make Esav look bad. It’s there to highlight the contrast between Esav and Yaakov — the choices that define them and, by extension, us.

Esav represents the immediate, the expedient, the here-and-now. Yaakov, our spiritual forebear, is the embodiment of foresight and patience. He sees the long game and keeps his eye on what truly matters: Abraham and Yitzchak’s legacy and the Jewish people’s spiritual destiny.

The message of Toldot is clear: the choices we make in moments of weakness have the power to shape our future — and the future of all who come after us. Esav’s impulsiveness relegated him to a footnote in history, like the nutmeg island of Run or France’s control over a vast portion of North America.

Meanwhile, Yaakov’s ability to think beyond the moment secured him a legacy that continues to inspire and guide us to this day — a timeless reminder that true greatness is not built in a moment of indulgence, but in the patience to see beyond it.

The author is a rabbi in Beverly Hills, California. 

The post What Nutmeg and the Torah Teach Us About Securing a Long-Term Future first appeared on Algemeiner.com.

Continue Reading

Copyright © 2017 - 2023 Jewish Post & News