Why Israel Has Become the Startup Nation

There are few industries as ripe for growth in the modern economic landscape than technology. And there are no nations that are taking advantage of that fact as well as Israel is. Ranked number three for AI startups and number two for research and development per capita, Israel is experiencing rapid development. This is why many now call it the Startup Nation. 

Israel Startup Ecosystem

This, in large part, comes off of the back of the massive amount of startups in Israel. One in three of all cybersecurity unicorns (companies valued at over one billion) are Israeli. Tel Aviv, a city in Israel, hosts the world's seventh largest startup economy. This amounts to $120 billion in startup value for the year 2022. There are also 92 unicorns held within this city alone. 

On top of all of the startups, there are research and development centers for massive companies hosted in Israel. Examples are companies like Amazon, Apple, Facebook, and Intel. This is only the start of Israel’s connection with the global marketplace. Israel is known for its strong connection with the U.S, and that is represented well in business. Venture capital firms from the U.S commonly host firms in Israel. On the flip side, Israeli startup founders find themselves moving to the U.S to find new markets.

This is generally a move that is really popular within Israel, moving to new foreign markets. The reality is Israel is a relatively small nation in terms of local markets. The government has focused on the acquisition of foreign investment rather than local development. An example of this is Yozma, this government program matches foreign venture capital investment on local startups. 

On top of Yozma, there are a host of other tax incentives, grants, and various other benefits to foreign investors. An example of this is the incentives on intellectual property. For anyone creating an IP in Israel, or moving their IP to Israel, will experience reduced taxes and dividends. The range of incentives affect a range of investors from individuals to research institutions, to NGOs. 

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Overall, Israel is connected to a range of nations for a range of reasons. New agreements in the Middle East connect the nation to the United Arab States and Bahrain. Startups create programs that are used across the globe and attract foreign investment. The U.S works alongside Israel to affirm both of their economies. Ultimately Israel, while still developing in some ways, is an undeniable global power.