Dan Senor

How has a small nation of 9 million people, forced to fight for its existence and security since its founding and riven by ethnic, religious, and economic divides, proven resistant to so many of the societal ills plaguing other wealthy democracies? Senor and Singer shine an important light on the impressive innovative distinctions of Israeli society—and what other communities and countries can learn. Written before 10/7, it is still a must read for anyone looking to gain a better understanding of the Israeli psyche.… (mere)

I'm always interested in economic history, and while Start-Up Nation offers more cultural analysis than straight-up history for most of its length, there's enough to make it worth a read for anyone curious about why Israel has such a high density of startup companies compared to most other developing or even developed nations. Senor & Singer point to a few factors to explain the unusually high density of entrepreneurship: Israel's history as a country that's had to invent things on the fly under pressure, the near-universal military service coupled with a very informal military culture, a well-educated founder population, large and early investments in education at all levels, high rates of immigration from a heterogeneous mix of countries, and a strong network of foreign benefactors.

That their explanation is cultural makes sense; as a result of Israel's unique history, Israelis have developed an extremely informal society that, while it can strike outsiders as pushy, encourages its members to do things for themselves and take risks. This results in a lot of new companies and inflows of venture capital, and as a result many foreign companies have important branch offices in the country. There's an extensive array of profiles of various entrepreneurs who developed major businesses that were either purchased wholesale by foreign companies or are still having a major impact as independent entities. I also thought their exploration of how paradoxically communal yet individualistic Israeli society is, as illustrated by, e.g., the publicly annotated travel books Israeli tourists leave all over the planet, or the effects that near-universal military service has on networking, was effective at showing how the factors that explained entrepreneurship also explained other aspects of the society.

The main failing of the book is that it spends most of its time rhapsodizing over how great Israel is rather than getting down into the weeds regarding what other countries could do to duplicate this mix. In fairness, perhaps that would be nearly impossible for most other countries, even if they have one or two of those factors:

"Singapore has a strong educational system. Korea has conscription and has been facing a massive security threat for its entire existence. Finland, Sweden, Denmark, and Ireland are relatively small countries with advanced technology and excellent infrastructure; they have produced lots of patents and reaped robust economic growth. Some of these countries have grown faster for longer than Israel has and enjoy higher standards of living, but none of them have produced anywhere near the number of start-ups or have attracted similarly high levels of venture capital investments."

Even a country like Ireland that's seen dramatic, traumatic changes over the past century still has a cultural and historical legacy that would make a transformation into a similar startup hub difficult, yet it would have been nice to see some concrete recommendations, or at least a slightly more detailed comparison. Another questionable aspect of the book is that the hundreds of billions of dollars that the US has given to Israel over the years aren't even alluded to. This is a huge omission, but then again, the US has also given plenty of money to Egypt, which hasn't developed nearly the same startup culture, so foreign aid alone is unlikely to be the deciding factor. Still, even though the US has not always been the closest of friends with Israel, the lack of attention paid to the nature of this relationship is a glaring flaw. One final quibble is that the writing style can feel a little lightweight at times, in that the copious personal profiles are written in a somewhat breathless, credulous manner that contrasts poorly with traditional economic histories heavier on the macroeconomics that this book conspicuously lacks. Still, even though I've never been to Israel and don't have any connection to the country at all, overall this was a fairly effective overview of all the different factors that go into making an innovation cluster on a national level.… (mere)