A prestigious international report reveals that Israel has the third highest rate of entrepreneurship and the highest rate among women and among persons aged over 55 in the world.
By Simon Griver
Research conducted by Dr. Miri Lerner and Yoash Avrahami of Tel Aviv Universitys Faculty of Management revealed that for every 100 Israeli men who start new businesses, 64 Israeli women also begin a new economic enterprise. This compares to 60 in the U.S. and 51 in Canada.
The Tel Aviv University study was part of an international survey carried out by the Kansas City-based Global Entrepreneurship Monitor (GEM). The study covered ten countries, and found that Israel ranked third after the U.S. and Canada in the overall level of entrepreneurship, but was well ahead of the U.K., Italy, Denmark, Finland, France, Germany and Japan.
Dr. Lerner noted a major ideological shift in Israels culture over the past decade away from the socialism of the countrys founding fathers and towards new social norms, which stress individualism, materialism and independence. "The entrepreneur has become Israels culture hero; a role model and a figure to be respected and emulated by many of the younger generation."
Such role models include Eva Hoffman, 53 and her daughter Anna, 25, who emigrated 11 years ago from Hungary. In 1996, they opened SIS Computer Information Institute in the southern city of Ashkelon. Now with two branches, the institute has trained more than 8000 students in all areas of computer sciences and employs 42 people, many of them former students.
"We did a lot of market research before we opened," explains Eva, "and we found that people were prepared to pay for first-class training. So we are more expensive than our rivals, but we offer better value courses."
The survey also found that Israel has the highest proportion of business ventures started by nascent entrepreneurs in the over-55 age group. "These findings suggest that significant entrepreneurial potential is to be found among men and women embarking on a second career, after early retirement," explains Dr. Lerner.
One of these older entrepreneurs is Shmuel Katz, who arrived from Russia in 1992. Katz, 65, founded Ceramight Ltd. in the southern city of Dimona. The company produces ceramic composites with high thermal resistance. Among its investors are the U.S. jet engine manufacturer Pratt & Whitney.
Israel ranked first among GEM countries in the rate of informal investors. About 6.4% of the adult population makes personal investments in ventures started by others, suggesting that a high proportion of Israelis are financially backing family and friends. And not surprisingly, considering the emphasis on high-tech in a country that also has the highest rate with respect to R&D transfer entrepreneurship (i.e. high-tech start-ups in such areas as communications, information technology, biotechnology, electronics and medical devices).
The change in direction in Israels economy has been reflected in enhanced economic performance over the past decade. According to the Central Bureau of Statistics, the countrys Gross Domestic Product (GDP) rose from $66 billion in 1993 to almost $100 billion last year, while annual per capita income increased from $12,500 to nearly $17,000 over the same period.
Avigdor Yitzhaki, Chair of Israels Small Business Authority, is happy about the GEM report. "The findings affirm the important role played by entrepreneurship in national economic growth of developed countries," he says, "and they affirm our appreciation of small businesses."