Zenith Finance Blog

RBA Finance

Building an enterprise culture

Can a business encourage people to be innovative and entrepreneurial? Can Israeli start-ups teach us anything?

Start-up Nation, the best-selling book; an account of Israel’s success in turning business ideas into NASDAQ blockbusters, co-authored by Saul Singer, is a salutary lesson for Australian business. Speaking about Israel’s knack for turning out successful innovators, entrepreneurs and companies, Singer explains that the military (where each Israeli citizen is required to serve) teaches about “the mission “ where failure is not an option but where you have to take risks in order to succeed. Then there is the question of figuring out how to make that happen.

He said Israel had become a tech and innovation superpower on the back of broadband produced by its mix of private operators and that Australia needed to devote more attention to its venture capital conditions than its technology infrastructure.

Start-up Nation was the result of Singer and his co-author Dan Senor’s own mission to understand how Israel’s seven million citizens had managed by 2009 to produce the second-largest number of NASDAQ-listed companies after the US.

To compare, Australia, with a population of 23 million, has approximately seven companies listed on the NASDAQ — mostly in the biotech field.

For sure the primary ingredient for Israel’s startup success lies in living in a hyper-stressful environment and their innovative responses to it; one can’t honestly blame them; their political situation places them in a short term mindset of survival. Yet the lessons are salient for many business decision-makers here – especially in the retail environment where online is rapidly eroding offline margins and in the food supply chain where dominant supermarkets dictate terms for suppliers. And then there is the lumbering Australian wage system where café and restaurant owners are faced with crippling penalty rates on the days when most customers want to dine. The lesson from Israeli start-ups is that entrepreneurial energy can deliver even under the most adverse conditions.