Innovation by Governmental Supported Start-ups and Entrepreneurships – the Israeli Model

Innovation by Governmental Supported Start-ups and Entrepreneurships – the Israeli Model

Weak Signal's progress: advanced

This Weak Signal came from: 
European Commission Framework Programme for RTD

The theme/scheme related to this Weak Signal: 
Theme 8 - Socio-economic Sciences and the Humanities

The sub-theme that best relates to this Weak Signal: 
Blue Sky Research on emerging issues and other research economies

When did the Weak Signal manifest ? 
2005-now

Weak Signal's description 
Public funding for entrepreneurial hubs and start-up financing is nothing new. Many of the world’s most successful innovation hubs bear the stamp of governmental invention (i.e. Silicon Valley, Bangalore or Guangdong), but not all attempts were successful. The newest, most successful approach was taken by Israel. It shows how innovations pushed by governments and the promotion of entrepreneurships could look like in the future, also in many other countries. It also gives a clue on how to prevent the most common mistakes, e.g. to name areas of innovation, to overlook a lack of related supporting infrastructure (i.e. not enough skilled employees, no suppliers cluster,…). With the help of the Israeli government’s venture-capital fund (founded in 1992 with $100m of public money) Israel attracted lots of foreign venture capital and foreign expertise. In contrast to most other concepts, it lets foreigners decide what to invest in, and then government provided the needed public money. As a result, foreign venture capital poured into the country, high-tech companies boomed, domestic venture capitalists learned from their foreign counterparts and many new jobs and ideas were created. In 2008, Israel attracted as much venture capital as France and Germany combined. The country has more start-ups per head than any other country (a total of 3,850, or one for every 1,844 Israelis), and more companies listed on the NASDAQ exchange, a hub for fledgling technology firms, than China and India combined.