Immigration Innovation: Why Israel has world-class startups

According to a report conducted by the National Foundation for American Policy, 46% of top companies in America backed by venture capital had at least one immigrant founder.

In Israeli society, the implication of this statistic resurfaces when looking at the influences of immigration in the startup world. Immigration policy in Israel reflects the positive sentiments towards newcomers and their role in the “Start-Up Nation,” in which players welcome the innovative ideas and talent brought by scientists, engineers, and business professionals.

Since Israel’s re-establishment in 1948, Israelis and their descendants immigrated to the Jewish state after facing a long history of displacement, making Israel a nation of immigrants. There are over 70 represented nationalities in the state of Israel. This country’s story of its people’s migration explains part of the innovative culture and the illustrious chutzpah that is the “Startup Nation.”

Perceptions of Immigration in Israeli Society

Israel has had to focus on more than simply maintaining the strength and progression of its citizens within its surrounding borders; rather, its people were scattered around the world and consequently immigrants are embraced. This has worked in Israel’s favor, for immigrants are known for being “natural risk takers” due to the flexibility and persistence required to make their dreams of migration a reality. Because of this, politicians in Israel “are making campaign promises to bring in more immigrants, not fewer.” This is one reason Israel is considered “the most pro-immigration country” in the world [source].

A Case Study of Immigrants’ Contribution to the Israel

Since the passing of several different waves of immigration to Israel, including the Mizrahi Jews in the 1950’s from the Middle East, the Russian Jews in the 1990’s, and most recently, the Ethiopian Jews in the late 1990’s, “each company founded by an immigrant has already created, on average, about 150 jobs. And the companies in the study are still in their high-growth stage.” (Ynet)

Lets take the 1990s, for example, when Israel accepted a million immigrants from the Soviet Union. While bringing these Russian-Jewish immigrants to Israel also required providing support in terms of housing and employment, these individuals included talented and educated engineers who did a great deal for the constantly developing tech-scene.

In one account of the effect of Russian immigrants’ contributions to Israel, Shlomo Maoz, the chief economist of investment house Excellence Nessuah, declared, “the Russians saved Israel—big time.” Moreover, he explains how the “new immigrants greatly boosted Israel’s high-tech industry, as result of the integration of IDF veterans’ know-how with the knowledge brought by Russian immigrations.”

There are several other contributions of immigrants from places other than Russia, including Better Place, the company that developed battery-operated cars and used Israel’s small size to its advantage, which was started by an Iraqi immigrant. The company was created with the hope to move the world away from oil, the mass pollution, and its negative effects and allow for long-term electronic driving. An Iranian immigrant founded Koolanoo, the Israeli company that is now the third-largest social networking hotspot in China. In fact, Koolanoo represents the majority of the 220 million online communities in China. Additionally, FoxyTunes, a site for Internet music, was founded by Ukrainian immigrants and sold to Yahoo for tens of millions of dollars in 2008. This company, which started out as the founders’ personal project to be able to adjust music in their toolbar, turned into a multi-million dollar deal. This small list of successful Israeli companies is representative of the valuable contributions of immigrant workers’ to the “Start-Up Nation.” (source)

While there is always room to improve the methods by which immigrants become acclimated and are able to utilize their skills, as one critic pointed out, it is undeniable that Israel sought to empower its people so they may develop their ideas in the land of their ancient ancestors.

The success of immigrants in this country and the success of Israel’s economy are not mutually exclusive; in fact, the migration of Jewish people around the world into the state of Israel is a proven necessary condition, although it may not be sufficient, to the economic progression and innovative nature of the high tech world. In other words, no matter how diverse these individuals may be in terms of nationality and cultural experience, immigrants bring the same formula that seems to drive the “Start-Up Nation”: creativity, flexibility, intelligence, and fearlessness.

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