Many countries have established tech hubs and are trying to foster both investments and growth of the tech startup scene. Tech hubs around the world include Silicon Valley in the United States, London in Europe and Shenzhen in China (Ismail, 2019). According to Ismail (2019), tech hubs can be defined as places that inhabit both emerging and established technology firms in an innovation-first ecosystem. Israel, and in particular Tel Aviv, have experienced a high growth in the number of tech-related startups in the last years. In 2019, Israel became the country with the largest number of startups per capita in the world, with one startup per 1,400 inhabitants (Yerman, 2019). The country has termed the area populated by high technology startups and firms as Silicon Wadi, which can be translated as Silicon Valley from Hebrew.
There were several factors that contributed to the rise of Israel’s tech start up scene. For one the Israeli government made a big impact through vigorous tax cuts, the establishment of the Yozma program (an investment company that gave rise to the domestic venture capital sector) and high-tech incubator programs (Sheppard, 2019). Another important driver of innovation was the expansion of entrepreneurial education. Various Israeli universities created degrees tailored to the country’s fresh entrepreneurial spirit, thereby teaching students the foundational skills and capabilities needed for crafting successful businesses. Moreover, both Israeli Women and Men need to serve in the Israel Defense Force (32 months for men and 24 months for women). Israel has made large investments in the advancement of its military technology and equips young people with valuable tech-related skills, even training programmers and data scientists during their service (Sheppard, 2019).
As the reputation of Israel’s tech startup scene grew, many large venture capital investors were attracted, thereby increasing growth potentials for the startup ecosystem. Simultaneously tech giants such as Facebook and Amazon began setting up research and development centers in the area, thereby further fostering advances in innovation.
What do you think about the tech start up scene in Tel Aviv? What differences do you see to other established tech hubs?
Ismail, N. (2019). Israel’s tech start-up scene: the heartbeat of the economy. [online] Information Age. Available at: https://www.information-age.com/israels-tech-start-up-scene-123479255/ [Accessed 16 Oct. 2019].
Sheppard, E. (2019). Sun, sand, sea and … unicorns? Why Tel Aviv is the world’s new startup capital. [online] the Guardian. Available at: https://www.theguardian.com/business-to-business/2018/aug/02/sun-sand-sea-and-unicorns-why-tel-aviv-is-the-worlds-new-startup-capital [Accessed 16 Oct. 2019].
Yerman, J. (2019). A Startup Nation: Why Israel Has Become The New Silicon Valley. [online] APEX | Airline Passenger Experience. Available at: https://apex.aero/2019/05/22/startup-nation-israel-become-silicon-valley [Accessed 16 Oct. 2019].
