What is the best way to create the type of innovative, entrepreneurial ecosystem?
Some of the lessons which have helped Israel transform into an international powerhouse in hi-tech innovation – with the highest ratio of startups per capita in the world, thus earning us the nickname “Startup Nation” – may prove valuable.
Here are just a few of the secrets behind Israel’s world-leading innovative ecosystem which may prove helpful as Korea continues to develop its Creative Economy:
Go Global. With a tiny local market and no formal relations with many of our surrounding neighbors, Israeli startups have no choice but to think globally from the get-go. This international orientation pushes Israeli startups to develop technologies with a global appeal and to adjust their marketing strategies accordingly. Seeing the world as your marketplace from day one will help position your startups as the global market leaders of the future.
- Startups and Multinationals: A Love Story. Going global is crucial, but there is still enormous value in developing the relationship between your local startup ecosystem and world-leading enterprise. Big corporations need the nimble, creative spirit of startups to keep on the cutting-edge of innovation. Startups need access to markets and partnership that these multinationals can provide best, as well as testing grounds to scale their products. In Israel, for example, many of the world’s greatest companies – including Microsoft, Google, IBM and others – offer startup incubator or accelerator programs, nurturing burgeoning companies while building crucial relationships, creating a dynamic tech ecosystem.
- Public-Private Partnership. Israel’s unique public-private partnerships are a key to our hi-tech sector’s growth. Our government allocates nearly 4.5% of its annual GDP to R&D, the highest percentage in the world – and it has paid off. Early on, the Israeli government instituted a series of innovative programs which bolstered the local high-tech industry, foremost being the “Yozma” initiative developed by the Office of the Chief Scientist (OCS) in the Israeli Ministry of Economy that offered funding to offset risks in the development of early stage technologies and encourage foreign investment. This cutting-edge program has been credited with jumpstarting Israel’s venture capital industry and with generating Israel’s unique startup incubator program. Our government is constantly updating its groundbreaking models for public-private partnerships– models emulated by many other nations.
- Let Your Angels Spread Their Wings. Angel investors are a critical, often undervalued part of any innovative ecosystem, bridging crucial funding gaps while mentoring and spurring entrepreneurialism at its earliest stages. Our government recently passed new amendments to our “Angels Law” encouraging these private investors to invest in seed-stage startups with substantial tax breaks and other incentives.
- Never Fear Failure. In many cultures, failure is a black mark, permanently staining a budding entrepreneur’s record. In Israel, failure is seen as the opposite: a stepping stone to success. Many of our greatest startups were founded by serial entrepreneurs who learned from their failures, only to go on to enormous triumphs. As tennis star Billy Jean King said, “Champions keep playing until they get it right.” Make the ability to fail and get up again a part of your culture, and champions will ensue.
These are just a few of the ingredients in the secret sauce of the “Startup Nation”.