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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.
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Colorado Attack Suspect Charged with Assault, Use of Explosives
FILE PHOTO: Boulder attack suspect Mohamed Sabry Soliman poses for a jail booking photograph after his arrest in Boulder, Colorado, U.S. June 2, 2025. Photo: Boulder Police Department/Handout via REUTERS
A suspect in an attack on a pro-Israeli rally in Colorado that injured eight people was being held on Monday on an array of charges, including assault and the use of explosives, in lieu of a $10-million bail, according to Boulder County records.
The posted list of felony charges against suspect Mohamed Sabry Soliman, 45, in the attack on Sunday also includes charges of murder in the first degree, although police in the city of Boulder have said on social media that no victims died in the attack. Authorities could not be reached immediately to clarify.
Witnesses reported the suspect used a makeshift flamethrower and threw an incendiary device into the crowd. He was heard to yell “Free Palestine” during the attack, according to the FBI, in what the agency called a “targeted terror attack.”
Four women and four men between 52 and 88 years of age were transported to hospitals after the attack, Boulder Police said.
The attack took place on the Pearl Street Mall, a popular pedestrian shopping district near the University of Colorado, during an event organized by Run for Their Lives, an organization devoted to drawing attention to the hostages seized in the aftermath of Hamas’ 2023 attack on Israel.
Rabbi Yisroel Wilhelm, the Chabad director at the University of Colorado, Boulder, told CBS Colorado that the 88-year-old victim was a Holocaust refugee who fled Europe.
A Department of Homeland Security spokesperson said Soliman had entered the country in August 2022 on a tourist visa that expired in February 2023. He filed for asylum in September 2022. “The suspect, Mohamed Soliman, is illegally in our country,” the spokesperson said.
The FBI raided and searched Soliman’s home in El Paso County, Colorado, the agency said on social media. “As this is an ongoing investigation, no additional information is available at this time.”
The attack in Boulder was the latest act of violence aimed at Jewish Americans linked to outrage over Israel’s escalating military offensive in Gaza. It followed the fatal shooting of two Israel Embassy aides that took place outside Washington’s Capital Jewish Museum last month.
Ron Halber, CEO of the Jewish Community Relations Council of Greater Washington, said after the shooting there was a question of how far security perimeters outside Jewish institutions should extend.
Boulder Police said they would hold a press conference later on Monday to discuss details of the Colorado attack.
The Denver office of the FBI, which is handling the case, did not immediately respond to emails or phone calls seeking clarification on the homicide charges or other details in the case.
Officials from the Boulder County Jail, Boulder Police and Boulder County Sheriff’s Office did not immediately respond to inquiries.
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Iran Poised to Dismiss US Nuclear Proposal, Iranian Diplomat Says
Iran’s Foreign Minister Abbas Araqchi attends a press conference following a meeting with Russia’s Foreign Minister Sergei Lavrov in Moscow, Russia, April 18, 2025. Photo: Tatyana Makeyeva/Pool via REUTERS
Iran is poised to reject a US proposal to end a decades-old nuclear dispute, an Iranian diplomat said on Monday, dismissing it as a “non-starter” that fails to address Tehran’s interests or soften Washington’s stance on uranium enrichment.
“Iran is drafting a negative response to the US proposal, which could be interpreted as a rejection of the US offer,” the senior diplomat, who is close to Iran’s negotiating team, told Reuters.
The US proposal for a new nuclear deal was presented to Iran on Saturday by Omani Foreign Minister Sayyid Badr Albusaidi, who was on a short visit to Tehran and has been mediating talks between Tehran and Washington.
After five rounds of discussions between Iranian Foreign Minister Abbas Araqchi and President Donald Trump’s Middle East envoy Steve Witkoff, several obstacles remain.
Among them are Iran’s rejection of a US demand that it commit to scrapping uranium enrichment and its refusal to ship abroad its entire existing stockpile of highly enriched uranium – possible raw material for nuclear bombs.
Tehran says it wants to master nuclear technology for peaceful purposes and has long denied accusations by Western powers that it is seeking to develop nuclear weapons.
“In this proposal, the US stance on enrichment on Iranian soil remains unchanged, and there is no clear explanation regarding the lifting of sanctions,” said the diplomat, who declined to be identified due to the sensitivity of the matter.
Araqchi said Tehran would formally respond to the proposal soon.
Tehran demands the immediate removal of all US-imposed curbs that impair its oil-based economy. But the US says nuclear-related sanctions should be removed in phases.
Dozens of institutions vital to Iran’s economy, including its central bank and national oil company, have been blacklisted since 2018 for, according to Washington, “supporting terrorism or weapons proliferation.”
Trump’s revival of “maximum pressure” against Tehran since his return to the White House in January has included tightening sanctions and threatening to bomb Iran if the negotiations yield no deal.
During his first term in 2018, Trump ditched Tehran’s 2015 nuclear pact with six powers and reimposed sanctions that have crippled Iran’s economy. Iran responded by escalating enrichment far beyond the pact’s limits.
Under the deal, Iran had until 2018 curbed its sensitive nuclear work in return for relief from US, EU and U.N. economic sanctions.
The diplomat said the assessment of “Iran’s nuclear negotiations committee,” under the supervision of Supreme Leader Ayatollah Ali Khamenei, was that the US proposal was “completely one-sided” and could not serve Tehran’s interests.
Therefore, the diplomat said, Tehran considers this proposal a “non-starter” and believes it unilaterally attempts to impose a “bad deal” on Iran through excessive demands.
NUCLEAR STANDOFF RAISES MIDDLE EAST TENSIONS
The stakes are high for both sides. Trump wants to curtail Tehran’s potential to produce a nuclear weapon that could trigger a regional nuclear arms race and perhaps threaten Israel. Iran’s clerical establishment, for its part, wants to be rid of the devastating sanctions.
Iran says it is ready to accept some limits on enrichment, but needs watertight guarantees that Washington would not renege on a future nuclear accord.
Two Iranian officials told Reuters last week that Iran could pause uranium enrichment if the US released frozen Iranian funds and recognized Tehran’s right to refine uranium for civilian use under a “political deal” that could lead to a broader nuclear accord.
Iran’s arch-foe Israel sees Iran’s nuclear program as an existential threat and says it would never allow Tehran to obtain nuclear weapons.
Araqchi, in a joint news conference with his Egyptian counterpart in Cairo, said: “I do not think Israel will commit such a mistake as to attack Iran.”
Tehran’s regional influence has meanwhile been diminished by military setbacks suffered by its forces and those of its allies in the Shi’ite-dominated “Axis of Resistance,” which include Hamas, Hezbollah, the Houthis in Yemen, and Iraqi militias.
In April, Saudi Arabia’s defence minister delivered a blunt message to Iranian officials to take Trump’s offer of a new deal seriously as a way to avoid the risk of war with Israel.
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The Islamist Crescent: A New Syrian Danger
Syrian President Ahmed al-Sharaa speaks during a joint press conference with French President Emmanuel Macron after a meeting at the Elysee Palace in Paris, France, May 7, 2025. Photo: REUTERS/Stephanie Lecocq/Pool
The dramatic fall of the Assad regime in Syria has undeniably reshaped the Middle East, yet the emerging power dynamics, particularly the alignment between Saudi Arabia and Turkey, warrant profound scrutiny from those committed to American and Israeli security. While superficially presented as a united front against Iranian influence, this new Sunni axis carries a dangerous undercurrent of Islamism and regional ambition that could ultimately undermine, rather than serve, the long-term interests of Washington and Jerusalem.
For too long, Syria under Bashar al-Assad served as a critical conduit for Iran’s destabilizing agenda, facilitating arms transfers to Hezbollah and projecting Tehran’s power across the Levant. The removal of this linchpin is, on the surface, a strategic victory. However, the nature of the new Syrian government, led by Ahmed al-Sharaa — a figure Israeli officials continue to view with deep suspicion due to his past as a former Al-Qaeda-linked commander — raises immediate red flags. This is not merely a change of guard; it is a shift that introduces a new set of complex challenges, particularly given Turkey’s historical support for the Muslim Brotherhood, an organization deemed a terror group by Saudi Arabia and many other regional states.
Israel’s strategic calculus in Syria has always been clear: to degrade Iran’s military presence, prevent Hezbollah from acquiring advanced weaponry, and maintain operational freedom in Syrian airspace. Crucially, Israel has historically thought it best to have a decentralized, weak, and fragmented Syria, with reports that it has actively worked against the resurgence of a robust central authority. This preference stems from a pragmatic understanding that a strong, unified Syria, especially one under the tutelage of an ambitious regional power like Turkey, could pose much more of a threat than the Assad regime ever did. Indeed, Israeli defense officials privately express concern at Turkey’s assertive moves, accusing Ankara of attempting to transform post-war Syria into a Turkish protectorate under Islamist tutelage. This concern is not unfounded; Turkey’s ambitious, arguably expansionist, objectives — and its perceived undue dominance in Arab lands — are viewed by Israel as warily as Iran’s previous influence.
The notion that an “Ottoman Crescent” is now replacing the “Shiite Crescent” should not be celebrated as a net positive. While it may diminish Iranian power, it introduces a new form of regional hegemony, one driven by an ideology that has historically been antithetical to Western values and stability. The European Union’s recent imposition of sanctions on Turkish-backed Syrian army commanders for human rights abuses, including arbitrary killings and torture, further underscores the problematic nature of some elements within this new Syrian landscape. The fact that al-Sharaa has allowed such individuals to operate with impunity and even promoted them to high-ranking positions should give Washington pause.
From an American perspective, while the Trump administration has pragmatically engaged with the new Syrian government, lifting sanctions and urging normalization with Israel, this engagement must be tempered with extreme caution. The core American interests in the Middle East — counterterrorism, containment of Iran, and regional stability — are not served by empowering Islamist-leaning factions or by enabling a regional power, like Turkey, whose actions have sometimes undermined the broader fight against ISIS. Washington must demand that Damascus demonstrate a genuine commitment to taking over the counter-ISIS mission and managing detention facilities, and unequivocally insist that Turkey cease actions that risk an ISIS resurgence.
The argument that Saudi Arabia and Turkey, despite their own complex internal dynamics, are simply pragmatic actors countering Iran overlooks the ideological underpinnings that concern many conservatives. Turkey’s ruling party, rooted in political Islam, and its historical ties to the Muslim Brotherhood, present a fundamental challenge to the vision of a stable, secular, and pro-Western Middle East. While Saudi Arabia has designated the Muslim Brotherhood as a terrorist organization, its alignment with Turkey in Syria, and its own internal human rights record, means that this “new front” is far from a clean solution.
The Saudi-Turkey alignment in Syria is a double-edged sword. While it may indeed serve to counter Iran’s immediate regional ambitions, it simultaneously risks empowering actors whose long-term objectives and ideological leanings are deeply problematic for American, Israeli, and Western interests. Washington and Jerusalem must approach this new dynamic with extreme vigilance, prioritizing the containment of all forms of radicalism — whether Shiite or Sunni — and ensuring that any strategic gains against Iran do not inadvertently pave the way for a new, equally dangerous, Islamist crescent to rise in the heart of the Levant.
Amine Ayoub, a fellow at the Middle East Forum, is a policy analyst and writer based in Morocco. Follow him on X: @amineayoubx
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