Ask a Samurai #5

Why are there so many startups in Israel?

Japanese corporates visiting Israel always ask us: why are there so many startups in Israel? Right now, there’s about 6,000 young companies in the country, while in Japan — a nation whose economy ranks 5th in the world — there are fewer than 600 startups. So what made Israel the startup nation?

Local industry nature. Israel never had any natural resources, and had to invest large sums of its GDP on defense for decades. These circumstances didn’t allowed heavy industry to develop — unless its defense-related. Therefore, local entrepreneurs had to adapt and develop products that are highly innovative and flexible, to suit large markets and wealthy international corporates. Some companies created new product sections (such as M-Systems, which invented the Flash Drive) while others created adaptable platforms (such as the Waze app).

The Israeli mindset. There are several reasons for the accomplishments of Israeli startups — but the most prominent is the Israeli founder’s tenacity; since many founders began coding in the army, they did so with an objective-oriented mindset. The military demands tough schedules, low-CEP development and pressure endurance — so many Israeli coders became tough, resilient and had to hone their problem-solving skills. Even developers and engineers who didn’t serve in the army needed to become able as their counterparts, in order to face the competition in the local market.

A supporting ecosystem. The Israeli government love the local entrepreneurial players and hightech companies — and support them with grants, tax benefits and other perks. The academic sector encourage innovation activity and there are plenty of local angels, VC firms, incubators and supporting infrastructure to start a tech company. It’s not the raising funds is easy by all means, due to the tough competition between founders — but there are many funding opportunities for the tenacious founder.

The Japanese innovation ecosystem is profoundly different than the Israeli ecosystem — and these differences can create an amazing synergy between the large corporates brought to Israel by Samurai Incubate, and the local startups. Join our meetups and learn why and how could you elevate this to your company’s advantage.

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