Start-up Nation: The Story of Israel's Economic Miracle is a 2009 book by Dan Senor and Saul Singer.

Start-up Nation examines the question how Israel, a young, only 60 years old nation, with no natural resources was able to reach such economic growth that "at the start of 2009, some 63 Israeli companies were listed on the Nasdaq, more than those of any other foreign country". ^[1]

At some point the book Start-up Nation was number five on The New York Times Best Seller list and The Wall Street Journal's best seller list for books on business.^[2]

The book received mixed reviews, with some strongly supporting its arguments and statistics while others rejected or even ridiculed them.

Book overview

As a review by Council on Foreign Relations puts it Start-up Nation "addresses the trillion-dollar question" in particular how Israel, a country that is economically isolated in its region "produces more start-up companies than large, peaceful, and stable nations like Japan, China, India, Korea, Canada, and the United Kingdom?"^[3] Responding this question the authors explain that Israelis economics's success should be sought in their approach to entrepreneurship. Most Israelis exercise extraordinary boldness, chutzpah, for good or for bad. In other words "when an Israeli entrepreneur has a business idea, he will start it that week."^[3]

The book analyzes three major factors that in the authors opinion contribute most to Israel's economic growth. Those factors are immigration, R&D, and mandatory military service.^[3]

Discarding "the argument from ethnic or religious exceptionalism, dismissing "unitary Jewishness" or even individual talent as major reasons for Israel's high-tech success", the authors demonstrate that a major factor for Israel's economic growths could be found in the culture of the Israel's military subordination, in which "You have minimal guidance from the top, and are expected to improvise, even if this means breaking some rules. If you're a junior officer, you call your higher-ups by their first names, and if you see them doing something wrong, you say so."^[1] Neither ranks nor the age matter much "when taxi drivers can command millionaires and 23-year-olds can train their uncles" , and "Israeli forces regularly vote to oust their unit leaders."^[4]

The book has lots of references to immigration and its role in Israel's economics's growth: "immigrants are not averse to start from scratch. They are by definition risk-takers. A nation of immigrants is a nation of entrepreneurs. From survivors of the Holocaust to Soviet refuseniks through the Ethiopian Jews, the State of Israel never ceased to be a land of immigration: 9 out of 10 Jewish Israelis today are immigrants or descendants of immigrants the first or second generation. This specific demographic, causing fragmentation of community that still continues in the country, is nevertheless a great incentive to try their luck, to take risks because immigrants have nothing to lose."^[5]

By posting and responding the question about "Israel's economic miracle", as authors call it, the authors demonstrate that "there are lessons in Israel's example that apply not only to other nations, but also to individuals seeking to build a thriving organization."^[3]

Using entertaining stories and anecdotes, the book describes Israel's technological and medical achievements like for example "the Israeli innovations that made possible Google Suggest, the list of suggestions that appear instantly in menu form as you type a search request, the Capsule endoscopy, a miniature camera embedded in a pill so that 18 photos per second can be wirelessly and painlessly transmitted from gastrointestinal tracts".^[6]

Critical reception

Jon Rosen from USA Today believes that although the book is "written from an unquestionably Israeli perspective and are likely to irk those with reservations about Israeli foreign policy" it still "is an accomplishment, not simply for exposing the roots of Israel's success, but by showing what the Israeli case might teach the rest of the world."^[7] In his review written for The Wall Street Journal James K. Glassman says that "The greatest strength of "Start-Up Nation" is not analysis but anecdote. The authors tell vivid stories of entrepreneurial success, such as that of Shai Agassi, the son of an Iraqi immigrant to Israel, with his electric-automobile technology, now in the process of creating "Car 2.0""^[1] Ciarán Hancock writes for Irish Times: "The authors argue that Israel benefits from having stable institutions and rule of law that exist in advanced democracies while also having a non-hierarchical culture, where everyone in business belongs to overlapping networks produced by small communities, common army service, geographic proximity and informality".^[8] Jim Miles writes in The Palestine Chronicle: "So this book does explain a lot - by omission in part, by inadvertent admission in others. There is no economic miracle in Israel".^[9]Ilene R. Prusher from The Christian Science Monitor cites Ms. Schuster who wrote the review of the book for Haaretz:"The book is filled with a gasping sense of wonder, which weakened the authors’ arguments". Ms. Schuster also believes that this book will look biased to a regular Arab reader.^[10] Publishers Weekly states that "The authors ground their analysis in case studies and interviews with some of Israel's most brilliant innovators to make this a rich and insightful read not just for business leaders and policy makers but for anyone curious about contemporary Israeli culture."^[11] In The Economic Times R Gopalakrishnan believes that Hebrew expressions used in the book make the book "alive in an eminently-readable".^[12] Besides chutzpah the authors use bitzua that basically means "getting things done". Another Hebrew expression used in the book is "Rosh gadol" that could be translated to "can-do and responsible attitude with scant respect for the limitations of formal authority". R Gopalakrishnan concludes that the ideas that are demonstrated in the book "are highly relevant for innovation capability in general, but for India, especially at this juncture." ^[12]

The Economist's article points out that "twenty years ago Harvard Business School’s leading guru, Michael Porter, devoted just one sentence of his 855-page “The Competitive Advantage of Nations” to Israel; today there is a growing pile of books on Israel’s high-tech boom, most notably “Start-Up Nation: The Story of Israel’s Economic Miracle”, by Dan Senor and Saul Singer. At the same time The Economist reviewer foresees potential problem for Israel's economic future:"It lies in its failure to assimilate into its business culture both Arab-Israelis and ultra-orthodox Jews, who will together be about one-third of the population by 2025. Only 39% of ultra-Orthodox men and 25% of Arab women are employed."^[13]

David Horovitz from The Jerusalem Post points out that conclusions made by the authors of the Start-up Nation find confirmations in a real world, for example, Congresswoman Gabrielle Giffords’s life was saved after she was shot in Arizona in January because the emergency medical team applied a revolutionary elasticized bandage, developed in Israel, that creates pressure to quickly staunch head wounds".^[2] Zachary A. Goldfarb from The Washington Post admits that "The book weaves together colorful stories of Israeli technological triumphs" like for example a story about Shvat Shaked who "founded a cybersecurity firm with his old buddy from Army intelligence and had the chutzpah to bet a top executive at PayPal, the online commerce company owned by eBay, that his few dozen engineers could beat PayPal's thousands in developing secure online soft-ware", but at the same time Goldfarb believes the the authors could have done a better job in drawing "straight lines between their theories about Israel's success and these case studies".^[14]Maureen Farrell from Forbes is disappointed that the authors mostly ignored two important elements, one of which is US foreign aid, but Farrell believes that "the book is worth reading to understand not just Israel's history but the history of capitalism and innovation".^[4] Alex Brill writes in The American Enterprise Institute for Public Policy Research: "The book's value extends beyond those interested in the fascinating stories of companies like Intel investing $3.5 billion in Israel so that Israeli engineers could lead the development of the Pentium processors or the fact that Israel has one start-up for every 1844 Israelis, more companies listed on NASDAQ than any country except the U.S. or more venture capital investment as the United Kingdom, a country nine times more populous.The book provides lessons about how to foster and even harness entrepreneurship, innovative energies and hard work for every country. And the book catalogues how Israeli start-ups have shared new innovations that save time, save lives and make work more efficient."^[15]

References