Monday, February 15, 2010

Getting Started

I knew Israel had some positive things going for it, but this is amazing:
Israel's stunning performance in world markets is beyond argument. The country lists more companies on NASDAQ than China, India, Japan, South Korea, Singapore, and all the countries of Europe--combined!
Not bad for a country with just over 7 million people - or a little over a million more than the island of Ireland. How do they do it? I've pondered this before, and I think it is still a phenomenon we can learn from. I recently read a review of Start-Up Nation, which takes a look at what other countries can learn from Israel. Reviewer Andy Oram at O'Reilly Radar points out some of the factors the authors think other countries could emulate, with my comments on their application to Ireland:
  • A loyalty to the entire community that goes beyond personal success. The authors point out that, for all of Israelis' notorious fractiousness, they expend enormous effort helping total strangers. All of Israel is a single team, even a single family. (Obviously, this family feeling does not extend to non-Jews.) Israeli entrepreneurs who give talks abroad often play up the strengths of their country as well as their company.
    > I think we have the sense of shared identity in Ireland, though we talk ourselves down rather than up

  • A sense of dissatisfaction. To innovate, one must be convinced that things are not good enough the way they are now. For Israelis, this drive for change has both Biblical and more recent historical roots, but technology provides a new arena rewarding hopes for improvement.
    > I think we share a sense of dissatisfaction in Ireland, though too often we lean towards resignation than innovation.

  • A Do-It-Yourself approach to technology, which perhaps is one manifestation of the afore-mentioned innate dissatisfaction. The authors report that equipment purchased by the army is always being tinkered with. The same interest in taking things apart and jerry-rigging them extends throughout the culture.
    > I think we are good at playing with other people's inventions in Ireland and creating new things, not sure I'd go so far as to say we re-build them: too many poets, not enough engineers for that!

  • A culture of challenging authority. The authors point out that this is a deep cultural value (and like many before them, trace it partly to the Jewish intellectual tradition), one that is particularly hard to foster in countries with controlling regimes.
    > We are far more compliant in Ireland (though we like to think we're not): but the recent shocks to our faith in Irish institutions might make us more challenging. Breath in and ... hold.

  • A determination to succeed against all odds. Countries that get complacent and rest on their laurels--as most observers think North Americans are doing--eventually lose their privileged places. The authors highlight fascinating stories of Israelis keeping up production in the face of war, and of cheerfully taking on seemingly impossible challenges.
    > I think we're determined: our response to the economic crisis shows a shared willingness to work together (even if there isn't complete consensus on what to do).

  • Interdisciplinary agility. Israelis tend to learn many skills--partly to survive in the armed forces--and to form companies closely linking people with different areas of expertise. In an age where many challenges require mashups between disciplines, this imparts a strong advantage.
    > We have some of this in Ireland (our Leaving Cert is not as 'narrowing' as the UK's A levels for example).

  • A tolerance for failure. Like the Silicon Valley, Israel is a place where someone can start a company, manage it through bankruptcy, and then pick up to start another company. A single failure, the authors say, gives the entrepreneur a high chance of succeeding at the next venture. Even in the military, people are rewarded for tackling problems with creative intelligence--not so much for the ultimate success or failure of the attempt.
    > Absolutely not in Ireland's case - and it's probably getting worse ...

  • Providing young people with arenas to exert responsibility. In Israel, of course, this arena is its unusually unhierarchical armed forces (and people who don't do army service, such as Arabs and the ultra-orthodox, miss out on critical experiences). But other countries could find other ways to challenge youth in situations where taking charge is a must and where results really matter.
    > We do this in Ireland up to a point, not least because we have had a relatively youthful population for so long anyway. But some form of (voluntary) national service just might make the difference in the lives of young men especially.

  • A fruitful mentoring relationship between venture capitalists and new entrepreneurs. Injecting money into new ventures (as so many countries do) is not enough; the managers must be guided through the shoals of financial, technical, and human resource challenges. Israel set up a unique program called Yozma in 1993 to bring together all the necessary elements.
    > Er, no.

  • Government policies friendly to startups. Israel has a decidedly mixed history here. Even after making a historic turn away from government control and toward a free market, its environment is most helpful to computer and high-tech companies. There are certainly innovations in many other areas--notably agriculture--but the authors say these fields encounter hampering regulations.
    > I'd go for 'decidely mixed' in Ireland too.

  • A truly open-arms approach to immigrants, who bring not only fresh perspectives but a high tolerance for risk. Once again, of course, Israel's liberal attitude toward immigrants applies only to Jews (and a lot of haggling goes on around deciding who qualifies). Even for Jews, it can take a long time to assimilate waves of newcomers and turn them into productive employees. But countries that don't make it easy to set down roots suffer economically. Short-term foreign workers never form the sustainable innovative institutions that can be planted by truly committed immigrants.
    > Here I think we have pretty well emulated the Israeli model in Ireland.
Andy points out some traits unique to Israel that have taken their development in a certain direction (the predominance of the military sector to name one obvious one). But we have our own unique traits in Ireland that could provide the potential for a new age of enterprise in Ireland. The way I see it, we don't have much choice but to seize the opportunities we can.


  1. Gerard,

    You probably underestimate the effect of the Israeli military machine. It acts as a giant incubator, providing young Israelis (again, only Jewish Istaelis, of course) with training, discipline, a sense of common purpose, and importantly a network of close contacts. In the military they get intensive training in high tech areas and create trusting networks of friends and contacts. When they leave the army these networks continue throughout their lives, and the bridges between those still in the army and those outside allows contracts, contacts and expertise to flow in both directions.

    Your other factors are very important too, of course, but the tight social cohesion found in Jewish Israeli society is something that we Irish lack. We have networks too, of course, but on a vastly inferior scale.

    Maybe the answer to Ireland's problems lie in a type of intensive 'service' and not some wishy-washy version. Think Sparta.

  2. Good analysis, Gerard. The book is a fascinating read.

    I would add a few observations based on my experience working with Israeli CEOs and VCs in Silicon Valley: They're driven by "what's right" rather than "who's right". So, if my approach to meeting a business goal is more creative, efficient and cost-effective than theirs, that's what rules, pecking order notwithstanding.

    And needless to say, they're interested only in what you "can" do; They have a refreshingly low tolerance for what you "can't" do.

  3. Good analysis, Gerald.

    I would add a few observations based on my experience working with Israeli CEOs and VCs in Silicon Valley.

    They're driven by "what's" right rather than "who's" right. so, if my approach to meet a business goal is more creative, efficient and cost-effective, that's what rules. Pecking order notwithstanding.

    Also, they are keenly interested in hearing what you "can" do; they tend to have low tolerance for what you "can't" do.

    It should surprise nobody to hear that innovation thrives in this small land. I highly recommend the book. It's a fascinating read.

  4. I believe your "A tolerance for failure" is the key point thats need replicating in Ireland as I've discussed before.

    I've noticed this more than any other attribute from my time in the USA that differs from Ireland (besides the unfailing optimism "We're the best in the world")

    My 2 cents

  5. I believe your "A tolerance for failure" is the key point thats need replicating in Ireland as I've discussed before.

  6. Perhaps you could add the following:

    1. An epic willingness to take over the land, property and livelihoods of a large settled population in order to create a new, ethnically-cleansed and ultimately thriving state.

    2. A steely determination to maintain, despite international condemnation, an exploitative, apartheid-style state primarily for the economic benefit of the dominant ethnic group.

    3. Substantial economic aid and political support from certain quarters, most especially the US.

    4. A massive 'defence' industry, which surpassed even that of the UK in 2007, making Israel the fourth largest arms exporter in the world after the US, Russia and France.


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