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Dan Senor speaks about Israel’s economic success
Investor highlights leadership, potential for innovation
March 4, 2011 | Becky Prager Staff Reporter
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An expert on the Israeli economy explained how the small nation has grown into a leading economic power as part of the Assembly Series.
Dan Senor, co-author of the bestseller “Start Up Nation: The Story of Israel’s Economic Miracle” and adjunct senior fellow for Middle Eastern Studies at the Council on Foreign Relations, spoke Thursday in Graham Chapel.
Senor explained Israel’s unique culture and dedication to leadership, innovation and determination. He argued that these qualities contributed to Israel’s economic success in entrepreneurship and innovation.
The paradox, explained Senor, is that Israel was able to achieve economic prosperity in spite of the many obstacles it faced.
“This is a country surrounded by adversaries, basically in a state of war since it’s been founded, with barely any natural resources, isolated in its region, a little [more than] 60 years old and smaller than the state of New Jersey,” Senor said.
With so little to work with, Senor said that Israel was forced to resort to an export economy, which is hard to do when 21 of the 23 nations in its vicinity boycott its economy.
Israel has almost no access to the market and investment capital of the oil-rich Arab world.
Despite these challenges, Israel has more companies in NASDAQ than all of Europe combined and ranks third after the U.S. and China. In 2008, it had more than twice the global venture capital of the U.S., 30 times that of Europe and 80 times that of China.
Senor explained that true economic growth is achieved through constant innovation, something that is impossible without the constant activity of small enterprises, including entrepreneurs, small companies and start-up companies.
“So staring at us is this model of a country whose economy is driven almost exclusively by small companies and start-ups, with the largest per capita start-up in the world,” Senor said. “The question becomes, is there anything in the Israeli experience that we in the West can learn from?”
Senor also cited important role of the immigrant in the growing Israeli economy.
Israel, explained Senor, is a land of immigrants. More than 70 nationalities are represented there, and two out of three Israelis are an immigrant or the child or grandchild of an immigrant.
“When you’re a country that’s so dependent on exports, having connectivity to all these networks around the world, with all these people on top of each other in an economic cluster—it’s like a turbo-charge to the economy,” Senor said.
Senor added that many of the economic success stories coming out of Israel started with an immigrant entrepreneur.
Senor also explained the role of the military in Israel’s economic success. Almost every Israeli goes through military training. Senor said that the leadership training experience that these young Israelis get while in the Israel Defense Forces is crucial to their later success in the business world.
The mentality in the military, and in the country itself, is never to let obstacles stand in your way and to try every solution possible, according to Senor.
“Their innovation comes from this uninhibited culture of problem-solving,” Senor said.
He gave the example of a coffee shop in Israel where a friend stops every morning, even though that shope had been blown up twice by suicide bombers in the past.
“When you wake up in the morning and don’t know if you’ll make it out of the coffee shop alive, you have a completely different perspective when it comes to economic obstacles,” Senor said.
The event was organized by Washington University Students for Israel and co-sponsored by Jewish Student Union, Chabad Student Association, St. Louis Hillel at Washington University, Delta Sigma Pi, the Olin Business School and groups from greater St. Louis.