By, Nathan Jeffay
4 min read
ByNathan Jeffay, Nathan Jeffay
In the hothouse of Israeli tech success, you may get a surprise if you ask professors which of their graduates they most revere. High up on Boaz Golany's list is the man who led one of Israel's most spectacular failures. Shai Agassi's Better Place company went crashing into bankruptcy last year despite £500 million in investment. But Dr Golany, vice-president for external relations at the Technion - Israel's Institute of Technology, sings his praises.
Mr Agassi was a top technology executive in the US in 2007 when he left, returned to his native Israel, and decided that he would change the face of transportation worldwide by introducing electric cars. He refused to be deterred by the fact that the technology did not exist for quick-charging batteries on the go, and instead his company Better Place set up stations for replacing flat batteries. When it went bankrupt it had put around a mere 2,000 cars on the roads.
To Dr Golany, Agassi is "one of the Israeli heroes" for trying.
The British cabinet office minister Francis Maude lauded this kind of "fail fast, learn faster, relaunch better" attitude this week - and heaped praise on Israeli innovators as inspirational. Indeed, they're the very people who our entrepreneurs need to look towards if we are to unleash the kind of creativity that could transform the UK economy. "I have long admired the Israeli 'start up' nation which is home to more hi-tech start-ups per capita than any other country," he said at the first D5 international summit in London. While the summit dealt mainly with technology for governments and public sectors, his comments on Israel took a general tone, crediting its people and human relationships for a "culture of innovation."
Last year alone, exits included the navigation app Waze, which was sold to Google for $1 billion, and the camera-in-a-pill maker Given Imaging, which sold to Irish medical device maker Covidien PLC for $860 million.
Being in the army teaches the need to make clear decisions
The Brits in the room were particularly familiar with Israeli tech - and unsurprised by the minister's comments. Over the past four years, the hi-tech scene that thrives along Israel's coast - often referred to as Silicon Wadi (a pun on California's Silicon Valley) - has been attracting more and more interest in the UK. In 2011, the British embassy in Tel Aviv launched the UK Israel Tech Hub to push forward tech collaborations, and in recent months there have been various high-level meetings.
Naomi Kriege Carmy, director of the Hub, recounts how a British executive recently took his team of four people to an Israeli research-and-design centre for the best part of a week - not to develop a product or establish a partnership, but just to soak in the culture of the place.
Techie Brits are fascinated by the psychology of Israeli innovators. It is not only their openness to failure and their risk-taking, but also their excitability when they identify a niche that is not filled and rush to find a solution, their chutzpah in thinking that even small start-ups can compete alongside huge multinationals, and the determination to prove doubters wrong.
Brits who dig a little deeper often hear a bit of history: how, for centuries, many of their ancestors were excluded from numerous professions because they were Jews, and now Israelis feel that the world is their oyster - to be explored from their own country.
The most counter-intuitive part of the story is that Israelis have turned their state's smallness into an advantage. Roni Einav, the first Israeli to make a huge exit - and, he proudly states, initiator of at least six ventures that completely flopped - recalls how global his most successful company was from the start.
When he sold his New Dimension Software to Texas-based BMC Software in 1999 for $675 million, only one per cent of its customers were in Israel. "If you are an Englishman you feel that the local scene is big enough to create business that is large, while Israel is just so small that it's clear that you have to be global, or at least across Europe," he says.
Like many in his field, Einav, whose book on Israeli hi-tech has been translated from Hebrew into English, Korean, Polish, Portuguese, Chinese, and Arabic, says that it has gained greatly from the effect of compulsory army service - the technology training it gives youngsters, the decision-making it teaches and the responsibility it inculcates.
Marcel Shaton, one of Israel's top civil servants dealing with Israel-Europe research and development connections, feels that aversion to risk as "irresponsible" is deeply engrained in the culture in Britain and other parts of Europe.
But if you cannot quickly cause British caution to evaporate, shrink the country, or reintroduce conscription, can Israeli tech traits still be transplanted?
The state and universities can find creative ways to give opportunities to students to throw caution to the wind in the knowledge that, if they fail, the damage will be limited, suggests Mr Shaton.
Mr Einav thinks that Brits should focus on army service - not the military experience itself but rather how it takes the best and the brightest and primes them for innovation.
"If you can find a way to select 1,000 or 2,000 British people out of university and, even if they are only 22 to 25, give them important positions and listen to them, maybe after a few years they can be as good as the people that Start-up Nation is talking about."
Dr Golany is more sceptical about opportunities for Britain to emulate Israel, saying that many of the circumstances of his country's success are "very specifically Israeli."
However, he does have one concrete suggestion, albeit one that would put the cat among the pigeons in the UK.
Dr Golany thinks that Israel's hi-tech success stems in part from its diverse immigrant population, and recommends that Britain should become more welcoming to foreign students staying after their degrees, working and opening companies in the UK.
Rather than being viewed as a threat, Dr Golany says, Brits should consider that they "may really help the British economy."