A place for innovation

ISRAEL: What country has more technology companies listed on Nasdaq than all of Europe, Japan, South Korea, India and China combined? The US? Think again. With a population of only seven million, Israel produces more start-ups per person than any country on earth.

According to a new business book about Israel, Start-up Nation, the country's culture of technical innovation and talent for improvisation comes from its compulsory military service — three years for men, two years for women. Authors Dan Senor, an expert in Middle Eastern studies at the Council on Foreign Relations and Saul Singer, a columnist for the Jerusalem Post, say that breaking the rules has served Israeli start-ups well.

""Innovation" is hardly the first word most people associate with the military. "Improvisation" is even less likely to come to mind,"  Senor and Singer write in Newsweek magazine. But they explain that much of the emphasis in military training is on technology and that soliders are encouraged to think about ways to improve existing systems.

"You have minimal guidance from the top, and this can mean breaking the rules,"  the authors say.

In addition, the networks and friendships formed are exceptionally valuable when Israelis later join business life. Because young entrepreneurs are familiar with each other's strengths and specialities, they know who can help them to develop an idea into a product. And, as many Israelis are immigrants or the children of immigrants, business connections often reach around the globe.

Perhaps surprisingly, the authors claim that Israeli's military service also breaks down hierarchies, saying the army has a "flat" culture, with few high-ranking officers. Junior officers use first names with their superiors, and are not afraid to make suggestions on how to do things better. "You have minimal guidance from the top," Senor and Singer write in their book, "and are expected to improvise, even if this means breaking some rules."