Good afternoon, ladies and gentleman. I am very happy to be here. My name is Ilan Mor as it was said and I’m an ambassador of Israel to Croatia. I came here in January this year and I’m very happy to be here. I’m not an entrepreneur. I’m a diplomat. Only an ambassador, but I represent a country which has become a center. Which become a role model of what we call the entrepreneurial spirit.
The start-up nation and this is what I’m going to talk to you about to you, to present you what made Israel, a small country, a very small country. For those who not know where Israel is let me just show you. In the middle east, three hours of flying time from Croatia, but living in an area which is very unfriendly one. A country which was a safe heaven for many horacle survivors who decided to open their second chip to inlive in their second land, in their land of the Jewish people, the land of Israel. We started by being 600 000 people in 1948 and now we are more than 9 million. After 71 years we have become as I said the center. One of the epicenters of innovation, of entrepreneurship and many countries, many companies are coming to Israel, are visiting Israel in order to find out, in order to crack this enigma, this question: How could we do the same?
How can we do what Israel has been doing for the last 71 years and what is the secret of success of Israel being one of the leading countries in innovation and in startups. The topic of my lecture today is how to create a start-up nation. Well, I’m sorry to disappoint you, I have no magic formula for you. You cannot go to the supermarket. You cannot take this formula and make abracadabra and than you have a start-up nation. No. So, the minute I’ve started, let’s make a record straight. I have no answer for you. What I would like to show you is what made Israel a start-up nation. This principles which some of them you’ve heard today presented to you by entrepreneurs. But I’m talking about the broader picture. I’m talking about a country which as I said, 9 million citizens, gross of 3.2, inflation of 1.8, full members of the OECD in 2010. Very good credit rating. A country which showed itself for the last 71 years and became as I said one of the leading countries in the west and a role model for many other countries.
So, now let me start talking about this ecosystem, innovation ecosystem of Israel which is a combination of many factors starting from army and I’m going to talk about it in a minute, through universities, the academia, through the incubators, accelerators, through the VC venture capitals and multinational companies and most important the involvement and the very important influence of the public sector which is on the right side down. Public sectors, I mean the government of Israel has made it almost 30 years ago a point to be involved in all that is needed to create this innovation ecosystem because the government can allow itself to take the risk. To put money to support small, medium-size and big size start-up companies in their adventure. It is an adventure, to create something from nothing.
So, ladies and gentlemen, these are some clusters of what made Israel, these ingredients that made Israel a success story. Since the lack of time I’m not going to talk about all of them but I would like to talk about something which is here, especially when we talk about the educated human resources here and of course the all system put together creates the ecosystem, this Israeli ecosystem in the field of innovation. I mentioned the army ladies and gentlemen. Army in Israel is a necessity. And please remember the word necessity because I’m going to talk about it a little bit later. The army for us is something that we must do. At the age of 18, students who graduate from high school, in Croatia, in America, in europe, they are thinking about next level, which is university.
In Israel, the 18 years old students who graduate from high school they think about what are they going to do in the army. For us, 3 years service for man is compulsary and 2 years for women. It is compulsary, mandatory service in the Israel army, but thinking about what we are going to do in army shows that army is not only vehicle, an insturment of government to protect and defend country but also a place in which you can think abour your own qualifications and yourself. And the army gives you, as a person even though army is not a place in which gives more credit to individualism. The army is a place in which you have to work together. But nevertheless every soldier, every young soldier can have a chance in order to prove himself. Be it in the airforce, be it in the tanks, be in infintry, but be it also in the computers, in the intelligence, in other fields in the army which needs you. Needs your creative mind.
The army is a green house for ideas because of our geostrategic situation. Because we are isolated in the middle east, because we have been victims for many years, for of boycott, beat from Europe, beat from other countries. We created a situation where we were forced to live in this situation in which if we don’t do things for ourselves, no one will do it for us. So, necessity, ladies and gentlemen, for Israel is the number one motor: for creative thinking, for innovation, from using what you have at your disposal to make things that no one else will give you or will do for you. The army teaches our young people, a women or men the variest qualifications, various features which will make them after 3 or 2 years ready for life, ready to be entrepreneurs.
Let me give you an example. Let’s start from the air force. Imagine, young Israelis soldier, an officer, sits in a cockpit of Air 16 at the age of 23, 24 he uses and he is a master of the most sophisticated system of a killing machine. At the age of 24, imagine what this by itself does to him. He is alone, thirty, fifty thousand feet in the sky, he is alone. He learns how to conduct responsibility, accountability, he learns to know what is teamwork because he is alone in the cockpit but around him are his fellows, his pilots. He knows how to activate the most sophisticated technology, most modern technology which exists. This is only part of what the army gives you as a person. There is no doubt in my mind that Israelis at the age of 21, 22 after the military service are much more ready for life than any other youngsters at the same age in the world. And this is part of the contribution of the army to us, to us as a society and this is also part of the fact that Israel as a small country and has a very robust defense industry in which we not only supply our needs, our self needs, we also export it.
So the combination of serving in the army, being in a position to implement ideas because the army rank doesn’t matter. If you have a good idea and you’re a private or sergeant and you can sit whit a collonel or general and you can tell him, mister general, mister collonel, your idea sucks. I have a better idea. And if you have a better idea you win. We win. The system, Israel wins for the best idea which can be provided or produced in the military service. So the army, and I would like you to think about it not as I said at the beginning, as a unit or an instrument of defending and on the battlefield but also as greenhouse for ideas, for getting experience, for getting all these virtues which can make you or her a good entrepreneur once you decide to do it. No one, I mean, not all of us are entrepreneurs. Myself included. I decided to go and deal with diplomacy and not to become an entrepreneur. But once I had decided, if I had decided I had all the basic qualifications to start to become or to be an entrepreneur because of the military service.
I sat in an army for 4 and a half years. My wife served in the army for 2 years, my son, my daughter. Everyone in Israel serves in the army so everyone in Israel is an entrepreneur in potential. The second element, which makes Israel quite unique is the strategic idea to invest in research and development. We are investing, we the government. Every government invests in research and development 4.5 to 5 percent from our GDP. This is one of the highest numbers in the world.
The combination which I shoved you before in our ecosystem, between universities, the public sector, the ministry of economy, the incubators, the army, the VC companies, the multinational companies, which I’m going to talk about them too. All of them create a situation in which the research and development are very close to each other in Israel, there is close prostivity between universities and the public sector and the incubators and of course all of them are working together in the favor of start-up companies.
Element number 3 is education. The Jewish people are known to be very educated throughout the years because of political reasons, prosecutions, antisemitism. We used to be close with each other, we used to live with each other but we also were part of during the emancipation in the 20th century and until today. We used to be part of a society. But we knew at that time that being part of society you have to show yourself, you have to prove yourself. So we were, we the Jewish people, we had to put a lot of influence, a lot of emphasize on studying of learning. We wanted to show ourselves better than the surrounding neighborhood. So the idea of the principle of learning and asking questions, starting not now in the 19th century or the 20th century. It goes back to the days of Talmud which is a second phase after the old testament, after the Bible.
So, there is a clear line between the old days, two hundred, two thousand years ago and today to Albert Einstein. All of them throughout the centuries and the years we have been asking why? Why is this that and not the other way? The idea of challenging what seems to me the status quo is also part of the identification card of Israel as a start-up nation. Asking question, challenging this status quo. Not taking no for an answer, failing, I’ve heard many speakers who are talking that failure is not the end of the world. I think in Israel it is not only this attitude which is “not the end of the world” but we use it as a leverage for success.
You start again. You think again. You never give up. You learn it in the army. You learn it at home and you implement it once you become an entrepreneur. So the element 3 is education. These are to summarise some of the virtues which you learn in the, it is called DNA attitude curve in aristocratic culture. You can see here the least challenging question everything strong drive we are very much motivated because we know that if we don’t do it for ourselves nobody will do it for us and solution-driven approach to real problem, cost-effective going global ect.
Those are all the virtuals that you can find in an Israeli entrepreneur. I’ve heard the stories about Israelis companies startups who went to the united states kicked out well kicked out through the door then came back through the window. kicked out again but at the end of this process, they were very successful in presenting and doing business with the counterparts of the United States. So don’t give up, don’t give up. Try to use failure as a leverage for your success and this is sometimes in the civilian life you have to pay a lot of money for this failure but in the army, you can afford yourself to take a failure and to make it a success story because again in the back of the mind of every Israeli is the principle of necessity. If we don’t do it nobody else will. We’ll do it ourselves.
Ladies and gentlemen, I’ll show you the map of the Middle East, I will go and I’m coming again to the Middle East. Look who are our neighbors. Do you want to change your neighbors with our neighbors? I don’t think so. No. There is no cross-border trade, there is no cooperation even though we have some peace agreements with our neighbors. Their region is very hostile. Not only hostile. Israel is located in semi desert area. You know the story about Moses. The big prophet who took Israel from Egypt, right? You know the story. Two elements I would like to mention here. He took us 40 years in the desert and in the end, he brought us to the land of Israel. A land which is half desert, no water, the climate is very bad, no place for real agriculture and for this we were wandering in the Sinai, Sinai peninsula for 40 years.
Not only this, Moses stutterd and when he went up to the mount Sinai, to help this encounter with God at that time he was given the Ten Commandment to be given to Israelite. God told him you take these Israelites and take them to was a thought that he wanted to sad Canada but he said no, Canaan. Canaan is the old name for the land of Israel so what can I tell you. We came to the land of our forefathers which is really a desert. No natural resources, no water, yes in the last couple of years we found some natural gas offshore Israel in the Mediteranian, no oil. I mean it could give taking us to Saudi Arabia, this would have been another story, so we came to a place which has no natural resources but one natural resource is our key for success. This is the humor, the human resource.
From the very beginning, from the 1948 we have decided to invest in our human resources in the men and the women who live and were born in Israel. That’s why we dedicated so much for research and development. This is why we invest so much in education in my humble opinion, not enough. The teachers in Israel are underpaid, but in principle, we understand the need the necessity to invest in our people and this is a strategic decision that has nothing to do with politics. All governments from the right or from the left follow this principle, the human resource that men and women in Israel are our biggest asset. I mentioned necessity before. Necessity forces us because of our natural conditions forces us to depend first and foremost on ourselves. That was my friend, the American ambassador here before.
America is our biggest friend and we have very close relationship with Unites states and also with Europe but in time which we were for example offered to join NATO or to have defense pact with the United States we are a little bit reserved because once we do it, we lose our independence to react when we have to react and I don’t have to mention you our neighbors from the north and from the south Hamas, Iran all this Jura sataric area in which we live in forces us to depend first and foremost on ourselves. After talking about this I would like to mention just before I finish a film which also in this field Israel has become one of the leading countries in the world and this is cybersecurity.
Yesterday your Minister Božinović paid the visit to Israel, he signed two agreements. One with the minister of the interior in Israel of cooperation and renewed agreement and then he went and signed MOU with the center of anti-terrorism in one of the leading colleges in Israel in the field of anti-terrorism and today he signed another MOU with our cyber authority on cooperation in the field of cyber and cybersecurity. Ladies and gentleman, I invite you to look at what Israel has been doing in the last 10 years in the field of cyber and those who are thinking of investing or to be dealing with the issue of cyber and cybersecurity, my door is open. Not only for cyber.
Before we finish, I would like to leave you with the message that if you don’t inovate, you will perish. If you don’t innovate, you will not be successful and in order to innovate, you have to think in the four or five principles which I shoved you as I said at the beginning, you cannot copy-paste. You don’t have a magic formula but these principles for those young creation can be a role model to follow and if they want to develop it, Israel is open to you. Israel is open for your business. Israel is open for the cooperation and also Israel is ready to show you more closely those principles which I shared with you today.
So either you innovate or you perish and with this, I would like to say thank you and leave you with this.