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The Israeli ecosystem: An innovation driven culture

One of the main success drivers of the Israeli hi-tech industry is its supporting ecosystem that encourages creative thinking, tolerance for high-risk actions, and establishment of independent small businesses.

The fact that start-up entrepreneurs are cultural icons and role models in Israel contributes to the constant emergence of new programs and facilities all made to enhance the abilities of new entrepreneurs and continually breathe new life into the ecosystem.

Israel's society is historically tightly linked through different kinds of networks. Mandatory military service is one powerful network, and so are other business and social networks, very common in Israel, that constantly facilitate connections and bring people together.

A study conducted by The Economist in 2016 found that informal networks are crucial to the success of ecosystems, just as much as funding and formal institutes are. According to the study, Israelis take the greatest advantage of online networking, they present the highest rate of meetings with other entrepreneurs in informal activity communities, and they are the most prolific participants in global online networking (LinkedIn, Facebook, Twitter, etc.).11

The combination of online and offline networking and the variety of hi-tech and innovation events, create a very high-scale informal start-up network that makes the "start-up nation" one of the most efficient start-up ecosystems in the world.

"In recent years it has become apparent that entrepreneurs helping entrepreneurs in informal networks are a core component of what’s become known as a “start- up ecosystem”.

Access to finance, talent and ideas are integral to any such ecosystem, as are the formal structures which facilitate such access, such as incubators, accelerators and co-working spaces. Entrepreneurs’ connections with their peers, however, have been shown to be as important to start-up growth in some cities as the role of institutions."

Informal Innovation, The Economist, 2016

The perfect locations

The location of companies is mainly derived from human resources and research capabilities around the area, which lead many of them to settle around major universities and research institutes.

Although companies of all industries locate themselves throughout the entire country, some areas have developed unique characteristics that attract higher percentages of companies in specific fields. This consequently turns the area into a hub, by which it gains an important factor that is essential for development and growth. For example, the financial and technological center of Israel is the Tel Aviv metropolitan area, containing over 50% of the hi-tech companies in the country.