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Mar. 6th, 2010 05:06 pm![[personal profile]](https://www.dreamwidth.org/img/silk/identity/user.png){kind=small}
gingemaНаткнулась на Book Review в журнале Technological Forecasting and Social Change.
Копирую здесь на случай если кому интересно.
Start-up nation: The story of Israel's economic miracle by Dan Senor and Saul Singer, Council of Foreign Relations, Hachette Book Group, New York, NY., 2009
Innovative start-ups have been responsible for almost all the net job creation in the U.S. for the last two decades [1]. This book examines the impact of such engines of economic growth in Israel. According to the World Bank Israel had a per capita GDP of $27,548 in 2008; the figures for its neighbors Egypt and Jordan were $5416 and $5283, respectively. The same year Israel had per capita venture capital investments 2.5 times greater than the U.S. and 30 times greater than Europe. In fact, this small, embattled country leads the world in the percent of its economy spent on R&D (1) and has the highest density of start-ups in the world. Why? That is the question the two authors of this book try to answer.
hey assert that there are four factors at work here:
1. Israel society is very egalitarian (rather than hierarchical), nurturing (rather than assertive), and individualist (rather than collectivist). It values flexibility over discipline, initiative over organization, and innovation over predictability. There is a high
tolerance for failure: adversity breeds inventiveness. In system terms, the society has been operating at the edge of chaos since the state was founded.
2. About 45% of Israelis are university educated and the country already had four world-class universities when its population was a mere 2 million - Hebrew University, formed in 1918, Technion in 1925, the Weizmann Institute of Science in 1934, and Tel Aviv University in 1956. Today there are 8 universities and 27 colleges.
3. Israel's military (the Israel Defense Forces or IDF) recruits the top 2% of high school students to try out for Talpiot, its most elite and intensive technology unit. Of these 10% pass the rigorous mathematics and physics tests. Then they undergo 2 days of
personality and aptitude tests. The military establishment itself reflects the characteristics of Israeli society (see #1). There are fewer senior officers: the ratio of officers to combat troops is 1:9, compared to 1:5 in the U.S. Company commanders are about 23 years old and imbued with an anti-hierarchical ethos. In a crisis organizational hierarchies can be instantly flattened, a characteristic of what are known in the U.S. as High Reliability Organizations. Thus junior personnel can exercise more responsibility and have more opportunity to use their own initiative. They are introduced to IDF needs and may have to find cross-disciplinary solutions to specific military problems. Example: severe back pain from chopper vibrations suffered by helicopter pilots. These elite soldiers stay in the program for nine years, six in military service and three to attain a university degree (usually in physics or mathematics). When they complete this program exposing young minds to both military and academic perspectives, they are ready to become entrepreneurs or top academics.
4. Israel is a nation of immigrants — and immigrants are risk takers. The population is very heterogeneous. In 1948 it totaled 806,000 and now in 2009 it is 7.1 million. Between 1990 and 2000 hundreds of thousands of immigrants arrived from the former Soviet Union, many well educated, with degrees in engineering, mathematics, or the sciences. This influx had a similar effect on entrepreneurial activities as the influx of Europeans had on American entrepreneurial activities when the U.S. was open to them.
The results are startling. Intel became Israel's largest private sector employer. Its Israel team designed the 8088 chip in 1980 and helped to make personal computers possible. It also produced the much faster 386 chip in 1986 and the Pentium chip in 1993 [2]. It has 5400 employees in a $3.5 billion plant. When Scud missiles flew into Israel in 1991, Intel Israel kept working. Microsoft and Cisco have R&D centers there as does Google. Half of the world's top technology companies have bought Israeli start-ups or opened R&D centers in Israel. As the country could not rely on obtaining aircraft and missiles from external sources, it developed its own capability, a remarkable achievement. Israel Aircraft Industries (IAI) not only manufactures major high-tech weapons but also exports them to recoup some of their high costs.
"Entrepreneur" is now seen as a standard career track. According to the authors Israel has 3850 start-ups, the greatest concentration in the world: one for every 1844 of its residents. The Economist lists 4000 high-tech companies and labels Israel "an entrepreneurial firecracker" [2]. From 2001 to 2006 its share of the global venture capital market doubled from 15% to 31% -
despite the technology bubble, terrorist attacks and the Lebanon War. Almost 70 Israeli companies are traded on NASDAQ.
1948 to 1970 the government was the entrepreneurial driver; from 1990 to the present it has been the private sector. Netanyahu's economic reforms, particularly the focus on privatization, have helped. The government recognized the need for venture capital and created the Binational Industrial R&D Foundation (BIRD) to fund joint U.S.-Israeli business ventures. It has invested $250 million in 780 projects. The government's Yozma program provided venture capital funds which, in the period 1992-1997, raised over $200 million. In 2009 there were 45 such Yozma funds managing $3 billion of capital. The Economist claims there are now more than 100 venture capital funds [2].
Some examples of innovative start-ups:
* Netafim developed drip irrigation systems that now operate in over 100 countries.
* Insightec uses an MRI to focus ultrasound on tissue that needs to be destroyed and to map local temperature to indicate how much heat is delivered to the target.
* Fraud Sciences identifies frauds by the absence of footprints on line. It turned down a $79 million offer from Pay-Pal.
* Aespironics produces an inhaler that incorporates a breath-powered wind turbine.
* Beta-O2 makes an implantable bioreactor to replace defective pancreas in diabetes patients. It combines geothermal algae,
fiberoptics, and beta cells. We have here an illustration of what Israelis call "technological mashups" that draw on diverse disciplines to generate disruptive technological advances. The fact that every Israeli Air Force pilot can do multitasks may well have facilitated this approach.
* Comverse developed voicemail [2].
* Mirabilis and Ubique are associated with instant messaging [2].
* Checkpoint provided the firewall [2].
* Compugen works on genetic sequencing for predictive drug development.
* Given Imaging produces pills that contain miniaturized cameras that take photos. By January 1, 2008, 700,000 pillcams were sold.
* Dov Moran sold his memory stick business to SanDisk for $1.6 billion [2].
Shai Agassi, whose family immigrated from Iraq, is the entrepreneur of the start-up Better Place Inc. It has the aim of taking the country off its dependence on oil, by turning to mass produced electric cars (not expensive hybrids). He has raised $200 million.
His innovative concept: create an infrastructure network grid of parking spots with charging stations where batteries are swapped, that is, lifted robotically out of cars and replaced with fully charged batteries. This operation should take no more time than filling up a gas tank. Denmark has initiated an ambitious plan to test the concept and Renault Nissan has agreed to make cars that work with such stations. Both Israel and Denmark are small countries where the proposed grid may prove practical.
Israel now has the world's highest ratio of engineers and scientists per capita (also the highest ratio of PhDs per capita [2]). The Weizmann Institute earned more than $200 million in royalties in the period 2001-2004. Hebrew University has registered 5500 patents and earns over $1 billion annually in sales of university-based research, primarily biotechnology and agritechnology. Even the adverse events of the 2000-2004 period - the bursting of the technology bubble, the crumbling of the Oslo peace process, the many suicide bombings, and the Russian immigration slowdown - did not reduce the level of exports; they rose 40%
between 2000 and 2008 (2).
The book does not discuss the nuclear weapon program. France, Norway, and the U.S. launched Israel on the nuclear path starting in the 1950s, building the Dimona reactor which became operational in 1963. The U.S. also supplied a small research reactor at Nahal Soreq which provided training for Israeli nuclear technicians [3].
Now let us take a brief look at Israel's Arab neighbors and their economies. In 2008 their population of 225 million compared with Israel's 7.1 million, and the total GDP of $1.3 trillion (led by oil-rich Saudi Arabia's $467 billion), compared with Israel's
$200 billion. But Israel's per capita GDP is five times greater than that of the Arab world. By 2020 the Arab world will need 80 million new jobs, yet their entrepreneurship is minimal: Jordan has Aramex and the United Arab Emirates has the Emirate Airlines. The number of patents registered in the period 1980-2000 from Saudi Arabia is 171, from Egypt 77, and from Israel 7652.
The number of books translated into Arabic annually is about one-fifth the number translated into Greek. The oil wealth has been used in the past for imports from the West, investments overseas, and military arms. Now much is spent on real estate.
There are some hopeful signs of change. The UAE and Qatar have established partnerships with Western universities such as Carnegie-Mellon's satellite campus featuring computer science and business administration programs. Saudi Arabia is opening up the King Abdullah University of Science and Technology.
The book keeps its focus on Israel, but we should note that there are two other small countries that share its enthusiasm for entrepreneurship and many of Israel's policies: Denmark and Singapore. The Economist reports that the Singapore government has invested heavily in digital media, bioengineering, clean technology, and water purification. It has set up a public venture capital fund and its various measures have earned it first place in the World Bank listing for ease of doing business. Its National Technological University offers a degree in technopreneurship and innovation. But neither Singapore's elite nor its consumers appear comfortable as yet with risk taking. For example, its Creative Technology Company invented the digital music player two years before Apple's iPod. Apple paid $100 million for patent infringement but it was the one that conquered the mass market.
Denmark hosts 20% of Europe's biotech companies and has thriving clean technology, fashion, and design industries. Furthermore, Danish companies attract more venture capital as proportion of GDP than any other European country. As Singapore serves as a beacon for Asian countries such as China, Denmark does so for European countries such as France [2].
BOOK REVIEW
Not all government schemes to galvanize start-ups succeed. Malaysia's massive BioValley complex, Dubai's entrepreneurial hub, Australia's BITS program (Building on Information Technology Strengths), and the European Union's European Investment Fund have not taken off [1]. Two necessary, but not sufficient, conditions for success are a strong educational system and an openness to outsiders. In global terms the three most entrepreneurial bases have been the Chinese, Indian, and Jewish diasporas.
The Economist concludes that "the Israel model" is the one to emulate [1,2]. Challenges for following this advice: how to achieve the effect without a Talpiot-like training approach and how to provide a culture stressing a high level of egalitarianism, individualism,
risk taking, and tolerance of failure.
Finally, there are dark clouds on the horizon for Israel. Foremost, of course, is the threat of Iran and its potential nuclear capability. The prospect of a nuclear race can destabilize the whole Mideast region. It can trigger a brain drain from top flight institutions such as Hebrew University, Technion, and the Weizmann Institute. The authors claim that to date 3000 tenured Israeli professors have relocated to foreign universities! Then there is the low productive participation of half the Israeli workforce, primarily the ultra-orthodox and the Israeli Arabs. Neither group serves in the military and thus is not exposed to vital social
networks and the opportunity to develop entrepreneurial skills. Finally Israel's heavy dependence on the U.S. should be a concern.
1 In 2007 the percentage of GDP spent on R&D was about 4.8% in Israel, 2.7% in the U.S., 1.5% in China and 0.8% in India.
2 In view of the global financial crisis, we should note that Israel has not had a single bank failure.
References
[1] The Economist, Oct. 31, 2009, p. 78.
[2] The Economist, March 14, 2009, p. 16.
[3] Wisconsin Project on Nuclear Arms Control, The Risk report, Vol. 2, No. 4, July-August 1996.
Harold A. Linstone
Editor-in-chief
E-mail address: linstoneh@aol.com.
Копирую здесь на случай если кому интересно.
Start-up nation: The story of Israel's economic miracle by Dan Senor and Saul Singer, Council of Foreign Relations, Hachette Book Group, New York, NY., 2009
Innovative start-ups have been responsible for almost all the net job creation in the U.S. for the last two decades [1]. This book examines the impact of such engines of economic growth in Israel. According to the World Bank Israel had a per capita GDP of $27,548 in 2008; the figures for its neighbors Egypt and Jordan were $5416 and $5283, respectively. The same year Israel had per capita venture capital investments 2.5 times greater than the U.S. and 30 times greater than Europe. In fact, this small, embattled country leads the world in the percent of its economy spent on R&D (1) and has the highest density of start-ups in the world. Why? That is the question the two authors of this book try to answer.
hey assert that there are four factors at work here:
1. Israel society is very egalitarian (rather than hierarchical), nurturing (rather than assertive), and individualist (rather than collectivist). It values flexibility over discipline, initiative over organization, and innovation over predictability. There is a high
tolerance for failure: adversity breeds inventiveness. In system terms, the society has been operating at the edge of chaos since the state was founded.
2. About 45% of Israelis are university educated and the country already had four world-class universities when its population was a mere 2 million - Hebrew University, formed in 1918, Technion in 1925, the Weizmann Institute of Science in 1934, and Tel Aviv University in 1956. Today there are 8 universities and 27 colleges.
3. Israel's military (the Israel Defense Forces or IDF) recruits the top 2% of high school students to try out for Talpiot, its most elite and intensive technology unit. Of these 10% pass the rigorous mathematics and physics tests. Then they undergo 2 days of
personality and aptitude tests. The military establishment itself reflects the characteristics of Israeli society (see #1). There are fewer senior officers: the ratio of officers to combat troops is 1:9, compared to 1:5 in the U.S. Company commanders are about 23 years old and imbued with an anti-hierarchical ethos. In a crisis organizational hierarchies can be instantly flattened, a characteristic of what are known in the U.S. as High Reliability Organizations. Thus junior personnel can exercise more responsibility and have more opportunity to use their own initiative. They are introduced to IDF needs and may have to find cross-disciplinary solutions to specific military problems. Example: severe back pain from chopper vibrations suffered by helicopter pilots. These elite soldiers stay in the program for nine years, six in military service and three to attain a university degree (usually in physics or mathematics). When they complete this program exposing young minds to both military and academic perspectives, they are ready to become entrepreneurs or top academics.
4. Israel is a nation of immigrants — and immigrants are risk takers. The population is very heterogeneous. In 1948 it totaled 806,000 and now in 2009 it is 7.1 million. Between 1990 and 2000 hundreds of thousands of immigrants arrived from the former Soviet Union, many well educated, with degrees in engineering, mathematics, or the sciences. This influx had a similar effect on entrepreneurial activities as the influx of Europeans had on American entrepreneurial activities when the U.S. was open to them.
The results are startling. Intel became Israel's largest private sector employer. Its Israel team designed the 8088 chip in 1980 and helped to make personal computers possible. It also produced the much faster 386 chip in 1986 and the Pentium chip in 1993 [2]. It has 5400 employees in a $3.5 billion plant. When Scud missiles flew into Israel in 1991, Intel Israel kept working. Microsoft and Cisco have R&D centers there as does Google. Half of the world's top technology companies have bought Israeli start-ups or opened R&D centers in Israel. As the country could not rely on obtaining aircraft and missiles from external sources, it developed its own capability, a remarkable achievement. Israel Aircraft Industries (IAI) not only manufactures major high-tech weapons but also exports them to recoup some of their high costs.
"Entrepreneur" is now seen as a standard career track. According to the authors Israel has 3850 start-ups, the greatest concentration in the world: one for every 1844 of its residents. The Economist lists 4000 high-tech companies and labels Israel "an entrepreneurial firecracker" [2]. From 2001 to 2006 its share of the global venture capital market doubled from 15% to 31% -
despite the technology bubble, terrorist attacks and the Lebanon War. Almost 70 Israeli companies are traded on NASDAQ.
1948 to 1970 the government was the entrepreneurial driver; from 1990 to the present it has been the private sector. Netanyahu's economic reforms, particularly the focus on privatization, have helped. The government recognized the need for venture capital and created the Binational Industrial R&D Foundation (BIRD) to fund joint U.S.-Israeli business ventures. It has invested $250 million in 780 projects. The government's Yozma program provided venture capital funds which, in the period 1992-1997, raised over $200 million. In 2009 there were 45 such Yozma funds managing $3 billion of capital. The Economist claims there are now more than 100 venture capital funds [2].
Some examples of innovative start-ups:
* Netafim developed drip irrigation systems that now operate in over 100 countries.
* Insightec uses an MRI to focus ultrasound on tissue that needs to be destroyed and to map local temperature to indicate how much heat is delivered to the target.
* Fraud Sciences identifies frauds by the absence of footprints on line. It turned down a $79 million offer from Pay-Pal.
* Aespironics produces an inhaler that incorporates a breath-powered wind turbine.
* Beta-O2 makes an implantable bioreactor to replace defective pancreas in diabetes patients. It combines geothermal algae,
fiberoptics, and beta cells. We have here an illustration of what Israelis call "technological mashups" that draw on diverse disciplines to generate disruptive technological advances. The fact that every Israeli Air Force pilot can do multitasks may well have facilitated this approach.
* Comverse developed voicemail [2].
* Mirabilis and Ubique are associated with instant messaging [2].
* Checkpoint provided the firewall [2].
* Compugen works on genetic sequencing for predictive drug development.
* Given Imaging produces pills that contain miniaturized cameras that take photos. By January 1, 2008, 700,000 pillcams were sold.
* Dov Moran sold his memory stick business to SanDisk for $1.6 billion [2].
Shai Agassi, whose family immigrated from Iraq, is the entrepreneur of the start-up Better Place Inc. It has the aim of taking the country off its dependence on oil, by turning to mass produced electric cars (not expensive hybrids). He has raised $200 million.
His innovative concept: create an infrastructure network grid of parking spots with charging stations where batteries are swapped, that is, lifted robotically out of cars and replaced with fully charged batteries. This operation should take no more time than filling up a gas tank. Denmark has initiated an ambitious plan to test the concept and Renault Nissan has agreed to make cars that work with such stations. Both Israel and Denmark are small countries where the proposed grid may prove practical.
Israel now has the world's highest ratio of engineers and scientists per capita (also the highest ratio of PhDs per capita [2]). The Weizmann Institute earned more than $200 million in royalties in the period 2001-2004. Hebrew University has registered 5500 patents and earns over $1 billion annually in sales of university-based research, primarily biotechnology and agritechnology. Even the adverse events of the 2000-2004 period - the bursting of the technology bubble, the crumbling of the Oslo peace process, the many suicide bombings, and the Russian immigration slowdown - did not reduce the level of exports; they rose 40%
between 2000 and 2008 (2).
The book does not discuss the nuclear weapon program. France, Norway, and the U.S. launched Israel on the nuclear path starting in the 1950s, building the Dimona reactor which became operational in 1963. The U.S. also supplied a small research reactor at Nahal Soreq which provided training for Israeli nuclear technicians [3].
Now let us take a brief look at Israel's Arab neighbors and their economies. In 2008 their population of 225 million compared with Israel's 7.1 million, and the total GDP of $1.3 trillion (led by oil-rich Saudi Arabia's $467 billion), compared with Israel's
$200 billion. But Israel's per capita GDP is five times greater than that of the Arab world. By 2020 the Arab world will need 80 million new jobs, yet their entrepreneurship is minimal: Jordan has Aramex and the United Arab Emirates has the Emirate Airlines. The number of patents registered in the period 1980-2000 from Saudi Arabia is 171, from Egypt 77, and from Israel 7652.
The number of books translated into Arabic annually is about one-fifth the number translated into Greek. The oil wealth has been used in the past for imports from the West, investments overseas, and military arms. Now much is spent on real estate.
There are some hopeful signs of change. The UAE and Qatar have established partnerships with Western universities such as Carnegie-Mellon's satellite campus featuring computer science and business administration programs. Saudi Arabia is opening up the King Abdullah University of Science and Technology.
The book keeps its focus on Israel, but we should note that there are two other small countries that share its enthusiasm for entrepreneurship and many of Israel's policies: Denmark and Singapore. The Economist reports that the Singapore government has invested heavily in digital media, bioengineering, clean technology, and water purification. It has set up a public venture capital fund and its various measures have earned it first place in the World Bank listing for ease of doing business. Its National Technological University offers a degree in technopreneurship and innovation. But neither Singapore's elite nor its consumers appear comfortable as yet with risk taking. For example, its Creative Technology Company invented the digital music player two years before Apple's iPod. Apple paid $100 million for patent infringement but it was the one that conquered the mass market.
Denmark hosts 20% of Europe's biotech companies and has thriving clean technology, fashion, and design industries. Furthermore, Danish companies attract more venture capital as proportion of GDP than any other European country. As Singapore serves as a beacon for Asian countries such as China, Denmark does so for European countries such as France [2].
BOOK REVIEW
Not all government schemes to galvanize start-ups succeed. Malaysia's massive BioValley complex, Dubai's entrepreneurial hub, Australia's BITS program (Building on Information Technology Strengths), and the European Union's European Investment Fund have not taken off [1]. Two necessary, but not sufficient, conditions for success are a strong educational system and an openness to outsiders. In global terms the three most entrepreneurial bases have been the Chinese, Indian, and Jewish diasporas.
The Economist concludes that "the Israel model" is the one to emulate [1,2]. Challenges for following this advice: how to achieve the effect without a Talpiot-like training approach and how to provide a culture stressing a high level of egalitarianism, individualism,
risk taking, and tolerance of failure.
Finally, there are dark clouds on the horizon for Israel. Foremost, of course, is the threat of Iran and its potential nuclear capability. The prospect of a nuclear race can destabilize the whole Mideast region. It can trigger a brain drain from top flight institutions such as Hebrew University, Technion, and the Weizmann Institute. The authors claim that to date 3000 tenured Israeli professors have relocated to foreign universities! Then there is the low productive participation of half the Israeli workforce, primarily the ultra-orthodox and the Israeli Arabs. Neither group serves in the military and thus is not exposed to vital social
networks and the opportunity to develop entrepreneurial skills. Finally Israel's heavy dependence on the U.S. should be a concern.
1 In 2007 the percentage of GDP spent on R&D was about 4.8% in Israel, 2.7% in the U.S., 1.5% in China and 0.8% in India.
2 In view of the global financial crisis, we should note that Israel has not had a single bank failure.
References
[1] The Economist, Oct. 31, 2009, p. 78.
[2] The Economist, March 14, 2009, p. 16.
[3] Wisconsin Project on Nuclear Arms Control, The Risk report, Vol. 2, No. 4, July-August 1996.
Harold A. Linstone
Editor-in-chief
E-mail address: linstoneh@aol.com.
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no subject
Date: 2010-03-06 10:30 pm (UTC)no subject
Date: 2010-03-06 10:32 pm (UTC)no subject
Date: 2010-03-07 08:39 pm (UTC)"...In system terms, the society has been operating at the edge of chaos since the state was founded"
:)
no subject
Date: 2010-03-07 08:41 pm (UTC)Вообще, когда читаешь написанное об Израиле в Штатах, всегда видно, понимает ли автор, о чем пишет, и только подстраивает текст под мышление американского читателя, или сам мыслит как американский читатель, а о чем пишет, не понимает. Вот эта фраза выдает в авторе первый случай.