CHAPTER 5 THE SPIRIT OF ENTERPRISE.
The transition from interventionism to liberalism Socialist messianism was favored by the first immigrants, but in a form that was reconciled with Zionism. As a result, these pioneers’ tools of choice were the kibbutz and the workers’ union of Histadrut over the symbols of the hammer and sickle.
The entrepreneurial culture developed from the socialist economy in the early years of the nation. This economic model was based on the kibbutzim, with community structures that built the Israeli economy and experimented with socialism. At the time, the residents of the kibbutzim constituted only 4% of the population, but more than a quarter of the army officers and members of the Knesset came from their ranks. While privatized now, they continue to be one of the pillars of the economy.
The utopian vision of the pioneers collided with the reality of the economic world, and the fact that not everyone shared this vision. Israel then gradually opted for a more liberal regime and integrated into the Western world. There was also a sudden liberalization of the Israeli economy at the end of the 1980s, marked by widespread privatization. All banks, which were controlled by the state, were privatized; some companies were bought by the VC groups. This liberalism opened the door to entrepreneurship, which had a direct influence on economic growth. Israel has therefore gradually become a country of entrepreneurs, earning it the famous title of « start-up nation » today.
Many Israeli companies have been listed on the Nasdaq and some have been listed in Europe. But over the last decade, the attraction to the European market has increased, and since 2005 more funds have been raised there than on the American market.
The « Jewish mother » syndrome and the entrepreneurial spirit.
Yossi Vardi, the founder of ICQ, a company sold to AOL, claims that the entrepreneurial spirit is the result of the traditional behavior of the « Jewish mother ».
In a close-to-reality caricatured representation, the Jewish mother feels excessive pride in even minor or imagined accomplishments of her children. The desire to succeed is thus an integral part of the culture, and the taste for ambition transmitted to children is indeed inherent in the education provided by Jewish mothers. Encouraging and protective, they dream of seeing their sons become doctors or lawyers and do not hesitate to provide constant demands and support.
This attitude is widespread in both Israel and the diaspora, where children exercise and develop their talents quickly without being reprimanded. This is also explained by the « king child ». In Israel, the child is not subject to the obedience rules known elsewhere. He has all the rights. Perhaps because parents are aware that one day he will leave for the army.
But this is also the case for other communities around the world: Greeks and Italians in the United States, Armenians, etc. This cultural trait is often linked to minorities who have experienced great suffering.
The Long History of Antisemitism
Antisemitism also has an influence on the entrepreneurial spirit. During the Middle Ages, Jews in Europe were banned from almost all professions and functions, except for those that the Church considered immoral or prohibited to Christians at the time, including anything related to commerce with money or the study of the human body.
They therefore had to trade to survive. To succeed, they also had to be educated: as an oppressed minority, they had to be doubly competent and know the workings of the « host » societies in which exile had taken them. Family or friendly ties with members of other communities (an archaic form of contemporary networking) often allowed them to occupy high diplomatic or commercial positions.
Act Upstream
Israelis are often criticized because they develop technologies that they immediately sell.
It must be acknowledged that they create very few structures designed to become world leaders with a distribution network that addresses the end consumer. While the country demonstrates excellent capabilities in developing technologies, it lacks marketing skills. It is therefore easier for the Israelis to sell technology to groups like Apple, Google or Cisco and entrust them with the task of global dissemination of the product.
Today, a Malaysian buys a cellular phone without knowing that its electronic components or software come largely from Israel. The Israelis therefore occupy an upstream and « back-office » position.
There are other niche sectors like agro-tech, with the company Netafim being the world leader in water management solutions for agriculture and the inventor of the first drip irrigation system, or Check Point, as previously mentioned, with its information system security solutions.
Bring Down the Walls or Go Over Them.
Israel often suffers from a perception problem throughout the world. To remedy this and thus indirectly help entrepreneurship, an exceptional sum of money has been budgeted for branding, ten times more than the ordinary communication budget of the Ministry of Foreign Affairs.
Among the niches in which Israel holds a comparative advantage and on which this « branding » policy of the « Israel brand » will focus first and foremost: science and technology.
In addition, if Israel’s perception can sometimes cause ideological or political problems in some markets, there are ways to overcome these obstacles.
For example, the Catalyst investment fund invested in the Israeli group Dori Media, which produces « telenovelas, » a South American specialty. It now has several themed channels in Malaysia and Indonesia, two countries with no diplomatic relations with Israel. It uses a Swiss subsidiary to broadcast television series. Directly or indirectly, Israeli companies are increasingly able to establish themselves in Muslim countries. According to Harith al-Dhari, the head of the Association of Muslim Scholars in Iraq, at least 70 Israeli companies operate in this country in various fields such as infrastructure and marketing, through proxy of Arab or European companies. The Israeli entrepreneurial spirit is to step over, bypass or bring down walls.
An illuminating example of the Israeli entrepreneurship in the « Israel Valley »: Given Imaging
PillCam®, an innovation from Given Imaging (Gi) is one example of technology transfer from military knowledge to the civilian sector (See above), as its inventor, a former missile engineer, combined his knowledge with that of a doctor.
Given Imaging was established in 1998 by engineers from Rafael Development Corporation. Its headquarters, manufacturing and R&D facilities are located in Yokneam, Israel, and subsidiaries are located in the United States, Germany, France, Japan, Australia, and Singapore. In 2001, only three years after its establishment, Given Imaging made headlines worldwide with its medical innovation.
The company’s story began in 1994. While working as chief engineer in electro-optics at Rafael, Gaby Iddan patented the basic concept of the swallowable video capsule. In 1996, he founded a 3D imaging company with two partners, and became a consultant to Mr. Meron, the founder of Given Imaging.
In January 1998, GI signed an agreement with Rafael, a state-owned defense company and leader in the missile sector. The agreement sold the project technology to GI and ensured its exclusive use of the technology.
The agreement stipulated that Rafael would transfer the know-how and intellectual property of the project to Given Imaging, including the patent and patent applications, prototypes, drawings, design, and other relevant technical information used within Rafael for the project. The technology was transferred to Given Imaging immediately after the signing of the agreement for the sum of 30,000 dollars.
Beyond illustrating the prevalence of technology transfers of military origin in Israel, Given Imaging is mainly an Israeli start-up that benefits from « the Israeli spirit. » According to a company executive, « the Israeli spirit is improvisation. Sometimes improvisation is negative, sometimes it’s positive. In this high-tech world, improvisation is positive. »
In 1966, a science fiction film, Fantastic Voyage, showed a high-tech miniaturized submarine injected into a person’s bloodstream to travel throughout their body. This was then just science fiction. Yet, the Israeli company Given Imaging transformed this fiction into reality. As in the movie, Given Imaging made a journey that no one would have imagined possible: by inserting a missile system into a miniature capsule, it was able to navigate through the bloodstream and take photos. PillCam for endoscopy, the first ingestible non-invasive device capable of studying gastrointestinal disorders, was born.
Figure 5.1: PillCam Capsule
The capsule itself (11 x 26 mm) is made up of miniature video cameras that are the size of a large tablet. Swallowed by the patient, it captures images of the digestive system. It also includes a miniaturized combination of transmitters, a photo imaging chip, a transmitter, a battery, and finally a light-emitting diode.
The capsule endoscopy is used as a less invasive procedure for placement or in addition to traditional endoscopies which require a long and thin tube inserted into the rectum and passing through the colon, or introduced through the mouth to the stomach and small intestine as a means of mechanically assisted visualization.
The technology is used by gastroenterologists to diagnose Crohn’s disease, gastric ulcers, and colon cancer.
Because the capsule is swallowed and goes through the entire digestive system, it takes longer than traditional endoscopy. The images are of good quality, comparable to those taken by viewing glasses, and tests have proven high sensitivity for detecting lesions. Early research had already shown that the capsule could detect signs of a disease when traditional endoscopy was not capable.
At present, the photographic capsule is essentially used to visualize the small intestine. While the upper digestive tract (the esophagus, stomach, and duodenum) and the colon (the large intestine) can be easily visualized with viewing glasses (cameras placed at the end of flexible tubes), no available viewing glasses are capable of traveling the entire length of the small intestine, which is very long (over 6 meters) and very winding.
« Our capsule gives doctors the ability to examine it for the first time. Before Given Imaging, no one was able to put it on screen. Don’t confuse innovation and progress. I prefer to use the term disruptive technology for our innovation, » explained Jean-Paul Durand, former CEO of Given Imaging France.
This imaginative start-up, considered one of the « prodigy children » of the Israeli high-tech sector, was acquired by the American-Irish company Covidien.
CHAPT
