Book Cover

A reform happens when you change the policy of the government; a revolution happens when you change the mind-set of a country.

# Review

On paper, Israel is perhaps one of the least likely nations to survive, much less prosper; it’s almost completely devoid of natural resources and is surrounded by larger, hostile nations. This book explores how Israel, despite all of its shortcomings, became a center for technological innovation and entrepreneurship.

There were several points that I found insightful; the first is the chutzpah of the Israeli people, or the ability to question, argue, and assert regarding a topic or a situation. Israeli organizations tend to be relatively flat and subordinates are not only expected but encouraged to speak up if they have new ideas or if they disagree with the leadership. I found the anecdotes amusing, such as the employees at a fraud detection startup telling Paypal’s CEO that he’s wrong during their first meeting and the Israeli Defense Forces (IDF) deliberately understaffing officers to encourage more autonomy for the rank and file soldiers. This meshes well with what I’ve learned, that the best organizations tend to be the ones which foster a radical openness. Growing up in a relatively Jewish environment (there’s a synagogue on the street of my childhood home and my first girlfriend was Jewish), I can say that interacting with Jewish friends and their families was very different than interacting with friends from many other cultures; with my Jewish friends and their families, I never had to guess what they were thinking because they always spoke their mind.

Another point that the authors brought up is the Israeli government’s support of technological development. Much of the Israeli technology results from the positive spillover from military technology research and the Israeli government is extremely supportive of venture capital; it even created its own fund called Yozma, which matched private VC investments with public money. The Israeli’s government’s fervent support of the tech industry should be a model to emulate; unfortunately, in many Western liberal countries nowadays, the government is typically the largest obstacle for the technology industry rather than the catalyst that drives tech growth. The authors also mention the IDF’s mandated 2-year conscription as a driver for human capital growth; I do think that stance is controversial. While I understand why Israel has a mandatory conscription, I question whether it’s possible to achieve a similar effect, perhaps through changing a country’s school curriculum, without having to resort to conscription.

The authors also mention the demographics of Israel as an asset, namely the influx of educated Jews from places like Russia. I do think immigration can be a large driver for growth, especially if the immigrants can adjust and are highly educated, which the Russian Jews largely can and were. The authors do acknowledge some shortfalls in Israeli society in terms of work culture, such as the lack of labour participation from strictly orthodox Jews and Israeli Arabs. I do think societal segregation between different factions has been a problem, especially in regards to opportunity access; I have a friend whose family is Russian Israeli and his father and other Russian Jews were suspected of being Soviet spies and were denied access to certain posts and training within the IDF.

Overall, the book was well-written and well-researched; there were many stats alongside supporting anecdotes, making the book very informative and digestible. While the book focused on what Israel did right to foster growth and it acknowledged the shortcomings, such as an over-reliance on exports and lack of managerial culture to foster the growth of large multinationals, I felt the book could have focused also on the external forces which helped Israel grow, such as the economic and political support of the US government over the decades.

# Conclusion

An interesting book on a case study of how a government fostered technological growth and innovative entrepreneurship.

# Overall rating: 8.0

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