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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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As Gaza War Continues, Hamas Calls for Global Protests While Israel Marks Breakthroughs in Medical Innovation
A pro-Hamas march in London, United Kingdom, Feb. 17, 2024. Photo: Chrissa Giannakoudi via Reuters Connect
As the Palestinian terrorist group Hamas calls for global protests amid stalled Gaza ceasefire talks, Israel has broken new ground despite the ongoing conflict, achieving a major medical breakthrough in synthetic human kidney development.
The contrast illustrates a stark contrast between the priorities of Hamas, an international designated terrorist group that has ruled Gaza for nearly two decades, and Israel, the lone democracy in the Middle East that has long been a leader in tech and medical innovation.
On Wednesday, Hamas urged worldwide protests in support of Palestinians, calling on the international community “to denounce Israel’s genocidal war and starvation policy in Gaza.”
“We call for continuing and escalating the popular pressure in all cities and squares on Friday, Saturday, and Sunday … through rallies, demonstrations and sit-ins outside the embassies of the Israeli regime and its allies, particularly in the US,” the statement read.
The Palestinian terrorist group also called to expose what it described as “the terrorism of the Zio-Nazi occupation against defenseless civilians.”
Hamas’s latest move against Israel comes amid stalled indirect negotiations over a proposed 60-day ceasefire and hostage release deal, which collapsed last month after the group vowed it would not disarm unless an independent Palestinian state is established — rejecting a key Israeli demand to end the war in Gaza.
In its statement, Hamas demanded the opening of all border crossings to allow immediate aid into the war-torn enclave and urged a global condemnation of “the international community’s inaction on the Israeli crimes.”
Amid mounting international pressure to address the humanitarian crisis in Gaza, Israel announced new measures to facilitate the delivery of aid, including temporary pauses in fighting in certain areas and the creation of protected routes for aid convoys.
Israeli officials have previously accused Hamas of diverting aid for terrorist activities and selling supplies at inflated prices to civilians, while also blaming the United Nations and other foreign organizations for enabling this diversion.
Hamas’s statement also emphasized that the “global resistance movement must continue until Israeli aggression on Gaza ends and the siege on the coastal strip is lifted.”
Meanwhile, as Israel faces escalating hostilities and the heavy toll of war, the Jewish state continues to push the boundaries of innovation and resilience, achieving new medical breakthroughs while confronting ongoing challenges.
In a major medical breakthrough, scientists at Sheba Medical Center and Tel Aviv University have successfully grown a synthetic 3D miniature human kidney in a lab using specialized stem cells derived from kidney tissue — one of the most promising advances in regenerative medicine.
Dr. Dror Harats, chairman of Sheba’s Research Authority, described this achievement as a reflection of Israel’s leading role in global medical innovation.
“Despite growing efforts to isolate Israel from international science, breakthroughs like this prove our impact is both lasting and essential,” he said.
In a landmark study, a team from Sheba’s Safra Children’s Hospital and Tel Aviv University’s Sagol Center for Regenerative Medicine created synthetic kidney organs that matured and remained stable for 34 weeks — the longest-lasting and most refined kidney organoids developed to date.
Nearly a decade ago, the research team became the first to successfully isolate human kidney tissue stem cells — the cells responsible for the organ’s development and growth.
Previous attempts to grow kidneys in a lab using general-purpose stem cells were short-lived, typically lasting only a few weeks and often producing unwanted cell types that compromised research accuracy.
However, this Israeli research team used stem cells taken directly from kidney tissue — cells that naturally develop into kidney parts — allowing them to create a much purer and more stable model with key features found in real kidneys.
This medical breakthrough could have far-reaching implications, redefining the current understanding of kidney diseases and advancing the development of innovative treatments.
Researchers believe the model could help assess how medications impact fetal kidneys during pregnancy and move science closer to repairing or replacing damaged kidney tissue with lab-grown cells.
The discovery came days after researchers from Hebrew University of Jerusalem and international partners discovered a way to boost the immune system’s cancer-fighting ability by reprogramming how T cells, which are white blood cells critical to the immune system, produce energy.
The researchers explained in a study published in the peer-reviewed Nature Communications that disabling a protein known as Ant2 in T cells greatly enhances their effectiveness against tumors.
“By disabling Ant2, we triggered a complete shift in how T cells produce and use energy,” Prof. Michael Berger of Hebrew University’s Faculty of Medicine, who co-led the study with doctorate student Omri Yosef, told the Tazpit Press Service. “This reprogramming made them significantly better at recognizing and killing cancer cells.”
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Netherlands to Push EU to Suspend Israel Trade Deal but Won’t Recognize Palestinian State ‘At This Time’
Netherlands Foreign Affairs Minister Caspar Veldkamp addresses a press conference, in New Delhi on April 1, 2025. Photo: ANI Photo/Sanjay Sharma via Reuters Connect
The Netherlands is spearheading efforts to suspend the European Union-Israel trade agreement amid rising EU criticism of Israel’s actions in Gaza, while simultaneously refusing to recognize a Palestinian state, contrasting with other member states as international pressure mounts.
On Thursday, Dutch Foreign Minister Caspar Veldkamp announced that the Netherlands will push the EU to suspend the trade component of the EU-Israel Association Agreement — a pact governing the EU’s political and economic ties with the Jewish state.
This latest anti-Israel initiative follows a recent EU-commissioned report accusing Israel of committing “indiscriminate attacks … starvation … torture … [and] apartheid” against Palestinians in Gaza during its military campaign against Hamas, an internationally designated terrorist group.
Following calls from a majority of EU member states for a formal investigation, this report built on Belgium’s recent decision to review Israel’s compliance with the trade agreement, a process initiated by the Netherlands and led by EU High Representative for Foreign Affairs and Security Policy Kaja Kallas.
According to the report, “there are indications that Israel would be in breach of its human rights obligations” under the 25-year-old EU-Israel Association Agreement.
While the document acknowledges the reality of violence by Hamas, it states that this issue lies outside its scope — failing to address the Palestinian terrorist group’s role in sparking the current war with its bloody rampage across southern Israel on Oct. 7, 2023.
Israeli officials have slammed the report as factually incorrect and morally flawed, noting that Hamas embeds its military infrastructure within civilian targets and Israel’s army takes extensive precautions to try and avoid civilian casualties.
In a Dutch parliamentary debate on Gaza on Thursday, Veldkamp also announced that the government would not recognize a Palestinian state for now — a position that stands in sharp contrast to the recent moves by several other EU member states to extend recognition.
“The Netherlands is not planning to recognize a Palestinian state at this time,” the Dutch diplomat said.
“This war has ceased to be a just war and is now leading to the erosion of Israel’s own security and identity,” he continued.
This latest decision goes against the position of several EU member states, including France, which has committed to recognizing Palestinian statehood in September.
The United Kingdom has likewise indicated it will do so unless Israel acts to ease the humanitarian crisis in Gaza and agrees to a ceasefire.
For its part, Germany said it was not planning to recognize a Palestinian state in the short term, and Italy argued that recognition must occur simultaneously with the recognition of Israel by the new entity.
Spain, Norway, Ireland, and Slovenia all recognized a Palestinian state last year.
Israel has been facing growing pressure from several EU member states seeking to undermine its defensive campaign against the Palestinian terrorist group Hamas in Gaza.
On Thursday, European Commission Vice President Teresa Ribera strongly condemned Israel’s actions in the war-torn enclave, describing the situation as a “grave violation of human dignity.”
“What we are seeing is a concrete population being targeted, killed and condemned to starve to death,” Ribera told Politico. “If it is not genocide, it looks very much like the definition used to express its meaning.”
Until now, the European Commission has refrained from accusing Israel of genocide, but Ribera’s comments mark one of the strongest European condemnations since the outbreak of the war in Gaza.
She also called on the EU to take decisive action by considering the suspension of its trade agreement with Israel and the implementation of sanctions, while emphasizing that such measures would require unanimous approval from all member states.
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Graduate Student Unions Promoting Antisemitism, Reform Group Says
Students listen to a speech at a protest encampment at Stanford University in Stanford, California US, on April 26, 2024. Photo: Carlos Barria via Reuters Connect.
Higher-education-based unions controlled by United Electrical, Radio, and Machine Workers of America (UE) are rife with antisemitism and anti-Zionist discrimination, according to a new letter imploring the US Congress’s House Committee on Education and the Workforce to address the matter.
“Tracing its roots to communism in the 1930s, the UE is a radical, pro-Hamas labor union that has a long history of antisemitism,” the National Right to Work Foundation (NRTW), one of the US’s leading labor reform groups, wrote on July 30 in a message obtained by The Algemeiner. “The UE openly supports the boycott, divestment, and sanctions (BDS) movement, which is designed to cripple and destroy Israel economically. Today, the UE furthers its antisemitic agenda by unionizing graduate students on college campuses and using its exclusive representation powers to create a hostile environment for Jewish students. The hostile environment includes demanding compulsory dues to fund the UE’s abhorrent activities.”
NRTW went on to describe a litany of alleged injustices to which UE members subject Jewish student-employees in the US’s most prestigious institutions of higher education, from the Massachusetts Institute of Technology (MIT) to Cornell University. At MIT, the letter said, “union officers” aided a riotous group which illegally occupied a section of campus with a “Gaza Solidarity Encampment,” participating in the demonstration and even denying access to campus buildings. UE members at Stanford University, meanwhile, allegedly denied religious accommodations to Jewish students who requested exemption from union dues over that branch’s supporting the BDS movement. And Cornell University UE was accused of denying religious exemptions in several cases as well and followed up the rejection with an intrusive “questionnaire” which probed Jewish students for “legally-irrelevant information.”
The situation requires federal oversight and intervention, NRTW said, including Congress’s possibly clarifying that student-employees are not traditional employees and are therefore afforded protections under sections of the Civil Rights Act which apply to the campus.
“These continuing patterns of antisemitism are illegal, immoral, and must be stopped,” the letter continued. “We encourage you to do all that is in your power to investigate and help bring an end to the UE and its affiliates’ nonstop harassment and intimidation of Jewish students … The Trump administration can also use tools available to it under Title VI and Title VI of the Civil Rights Act against colleges who work with unions to create a hostile environment for Jewish students.”
July’s letter is not the first time NRTW has publicized alleged antisemitic abuse in unions representing higher education employees.
In 2024, it represented a group of six City University of New York (CUNY) professors, five of whom are Jewish, who sued to be “freed” from CUNY’s Professional Staff Congress (PSC-CUNY) over its passing a resolution during Israel’s May 2021 war with Hamas which declared solidarity with Palestinians and accused the Jewish state of ethnic cleansing, apartheid, and crimes against humanity. The group contested New York State’s “Taylor Law,” which it said chained the professors to the union’s “bargaining unit” and denied their right to freedom of speech and association by forcing them to be represented in negotiations by an organization they claim holds antisemitic views.
That same year, NRTW prevailed in a discrimination suit filed to exempt another cohort of Jewish MIT students from paying dues to the Graduate Student Union (GSU). The students had attempted to resist financially supporting GSU’s anti-Zionism, but the union bosses attempted to coerce their compliance, telling them that “no principles, teachings, or tenets of Judaism prohibit membership in or the payment of dues or fees” to the union.
“All Americans should have a right to protect their money from going to union bosses they don’t support, whether those objections are based on religion, politics, or any other reason,” NRTW said at the time.
Follow Dion J. Pierre @DionJPierre.