Acton Institute Powerblog

Battlefield Entrepreneurs: The Secret of Israeli Innovation?

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Over the past 60+ years, Israel has emerged as an economic powerhouse despite all odds. With only 7.1 million people, no natural resources, and surrounded by enemies and constant threats, it has somehow managed to attract nearly $2 billion in venture capital. It produces more start-up companies than large countries like Japan, India, Korea, and the United Kingdom, and has more companies on the NASDAQ than any country other the United States. Given its range of challenges, how can this be?

In their book, Start-up Nation: The Story of Israel’s Economic Miracle, Dan Senor and Saul Singer set out to explore the question. Indeed, as countries across the world struggle to develop the human, cultural, and institutional capital necessary for a thriving economy, Israeli society appears to cultivate these features with ease.

What might the rest of us learn from such an example? “The West needs innovation,” the authors write. “Israel’s got it. Understanding where this entrepreneurial energy comes from, where it’s going, how to sustain it, and how other countries can learn from the quintessential start-up nation is a critical task for our times.”

The lessons are many, and throughout their book, Senor and Singer outline a host of competing theories and hypotheses. But of all the potential drivers, I was struck most by the role the nation’s military plays in cultivating Israeli culture and bolstering its unique ethos of innovation and entrepreneurship. As peace and prosperity have largely prevailed throughout much of the West (compared to most of human history), what “built-in” lessons of human existence might now need more of our attention?

Israel requires military service for all citizens over the age of 18, which brings a host of unique and weighty responsibilities very early on. In a chapter titled “Battlefield Entrepreneurs,” the authors explain how this cultivates human capital and lays a strong foundation of maturity and wisdom that permeates the culture. “There is something about the DNA of Israeli innovation that is unexplainable,” says Gary Shainberg, vice president for technology and innovation at British Telecom. “I think it comes down to maturity…because nowhere else in the world where people work in a center of technology innovation do they also have to do national service.”

Such service is no cakewalk, with constant attacks and threats from surrounding enemies and a peculiar reserve system that often puts inexperienced youngsters in command of veteran reserve fighters. Unlike other militaries, Israel’s reserve forces serve as the backbone of its operations, not mere support, coming to combat just days after recall with little to no “update training.” “It’s actually a terrible way to manage an army,” writes war historian Fred Kagan. “But the Israelis are excellent at it because they had no other choice.”

Not only are they excellent at it, but the model itself reinforces its entrepreneurial culture. One key feature of Israeli innovation is the culture’s relative disregard for traditional hierarchies and its openness to internal debate, conflict, and argumentation. On this, the Israeli reserve system plays both chicken and egg. “Israel’s reserve system is not just an example of the country’s innovation; it is also a catalyst for it,” write Senor and Singer. “Because hierarchy is naturally diminished when taxi drivers can command millionaires and twenty-three-year-olds can train their uncles, the reserve system helps to reinforce that chaotic, antihierarchical ethos that can be found in every aspect of Israeli society, from war room to classroom to boardroom.”

One of the clearest examples of this is in the role of company commander—assumed mostly by 23 year olds who are given charge of 100 soldiers, 20 officers, 3 vehicles, and in turn, a whole lot of weapons, ammunition, and explosives. Each is given responsibility of a specific area in the case of a terrorist attack. “If a terrorist infiltrates that area, there’s a company commander whose name is on it,” explains one 30-year-old IDF major. “Tell me how many twenty-three-year-olds elsewhere in the world live with that kind of pressure.” I visited Israel just last fall, and had the privilege of meeting two young tank commanders (also in their early 20s). They spoke with pride about their position, and noted that in no other military would they have that opportunity at such a young age.

start_up_nation_dan_senor_saul_singer_view_1Such formative and transformative experiences alter and enhance the orientation of each citizen from there on throughout their life, into their educational experiences, marriages, business pursuits, and so on:




Again, this is but one of many dynamics that contribute to Israel’s culture of innovation, but when it comes to enhancing society-wide priorities, the direct fruits are something to behold.

The challenge in taking some lesson from all this is that no country would (nor should) wish for such a unique predicament. Indeed, the only other developed countries that require such intensive periods of military service are South Korea and Singapore, which as the authors reminds us, have all faced “long-standing existential threats or have fought wars for survival in recent memory.” As much as Israel’s military system has contributed to and reinforced its admirable culture, wishing for the primary driver (constant war) is surely not the answer.

Yet, given its peculiar position as a prosperous, developed, democratic country, Israel does provide a helpful contrast against the rest of the West, and particularly America, what with our privileged youth, ever-inflating age ranges of “adolescence,” and ever-materialistic notions of a once noble “American Dream.” We find ourselves in a unique period of civilization with unprecedented opportunity and prosperity, and yet, it’s so new that we ourselves aren’t quite sure what to do with it, or how to sustain it. So many of our newfound blessings and privileges have allowed us to sidestep certain processes that, while undesirable, just so happened to include central lessons as built-in features. I’m thankful that most of that is now gone and passed, to be sure, but those lessons still need learning.

The question, then, as we observe the remarkable entrepreneurial culture of Israel, is not whether we should kick in a mandatory draft for the sake of boosting the economy and tempering spoiled youngsters. The question, more broadly, is how do we avoid taking the fruits of past sacrifices for granted? In times of peace and prosperity, where we aren’t pressed to endure severe challenges born by more immediate and tangible obligations, how are we to cultivate responsible, virtuous, and sacrificial stewards? How do we cultivate ‘battlefield entrepreneurs’ without the battlefield?

We’ve got no shortage of “childish impatience.” How do we match it with maturity?



  • 1625toots

    Dan Senor – the man in charge of the 9 Billion dollars that went missing in Iraq – Now he wants us to copy Israel’s business acumen – which is subsidized by billions of U.S. dollars. I am not buying a word of it!
    Fron HBO –
    “Bill Maher: It does seem a lot of money, 9 billion dollars, to disappear.
    Dan Senor: I’m not defending it. There was a lot of fraud.”