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Business trips to Tel Aviv are always enjoyable. Of course, there is the sun (apparently 300 days of it annually) and sea as well as some of the most impressive cuisine globally. But perhaps of most note is the fact that the city produces more start-ups per capita than any other in the world.

This ranking comes courtesy of the Global Start-up Ecosystem report published last year. What is interesting to us is both the breadth of sectors Israel’s start-ups span and, more importantly, why the country is able to produce so many dynamic businesses. Israeli companies capitalised at over US$15bn can be found in sectors as diverse as generic pharmaceuticals (Teva) and cybersecurity (Check Point). Many household names also began their life in the country before being acquired by larger corporations. Mobileye currently holds the title for the most lucrative acquisition of an Israeli business, given the US$15.3bn paid for it by Intel in 2017. Elsewhere, other large US corporates have acquired Israel organisations in fields including traffic management (Google’s purchase of Waze), robotics (Medtronic acquiring Mazor Robotics) and food innovation (IFF gaining control of Frutarom). 

Why is there such a strong start-up culture in the country? Some of it simply reflects a self-sustaining ecosystem of experienced investors and academics/ scientists and strong university programmes. The government has also played a notable role, reducing corporation tax for start-ups, removing bureaucratic hurdles and making a clear commitment almost to double the number of skilled personnel employed in the tech sector to 500,000 (or more than 5% of the population) during the next decade. We remain highly impressed by the entrepreneurial and international mentality of the people/businesses whom we meet from the country. Many more of the beneficiaries of the future trends which excite us look set to emerge from Israel in the coming years. Watch this space.

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