Start-up Nation

foundation that generates both innovation and entrepreneurship; what it lacks are policy fixes to further amplify and spread these assets within Israeli society. Fortunately for Israel, it is probably easier to change policies than it is to change a culture, as countries like Singapore demonstrate. As the New York Times’ Thomas Friedman put it, “I would much rather have Israel’s problems, which are mostly financial, mostly about governance, and mostly about infrastructure, rather than Singapore’s problem because Singapore’s problem is culture- bound.”¹²

Conclusion

Farmers of High Tech

The most careful thing is to dare.

—SHIMON PERES

AS WE WAITED IN ONE OF THE ANTEROOMS of the President’s House, we were not sure how much time we would get with President Shimon Peres. At eighty-five, Peres is the last member of the founding generation still in high office. Peres began his career as a twenty-five-year-old sidekick to David Ben-Gurion and went on to serve in almost every ministerial post, including two stints as prime minister. He also picked up a Nobel Peace Prize along the way.

Abroad, he is one of the most admired Israelis. At home, his reputation is more controversial. Peres is known primarily as the father of the 1993 Oslo accords, which were famously instituted with a handshake between Yitzhak Rabin and Yasir Arafat in the presence of Bill Clinton on the White House lawn, but which came to symbolize, to many Israelis, false hopes, terrorism, and war.

It is hard to exaggerate Peres’s impact on Israel’s diplomacy, but this is not what we were primarily interested in talking to him about. Less well known, but no less significant, was his role as a serial entrepreneur of a very unique sort—a founder of industries. He never spent a day of his life in business. In fact, he told us that neither he nor Ben-Gurion knew anything about economics. But Peres’s approach to government has been one of an entrepreneur launching start- ups.

Peres grew up on a kibbutz before the founding of the state. It wasn’t just the social and economic structure of this Israeli invention that was innovative; its very means of sustenance represented a huge departure. “Agriculture is more revolutionary than industry,” Peres was quick to point out as we finally settled into his book-lined office, surrounded by mementos from Ben-Gurion and world leaders.

“In twenty-five years, Israel increased its agricultural yields seventeen times. This is amazing,” he told us. People don’t realize this, Peres said, but agriculture is “ninety-five percent science, five percent work.”

Peres seemed to see technology everywhere, and long before Israelis themselves thought in such terms. This may have been one of the reasons Ben-Gurion backed Peres so strongly; the “Old Man” was also fascinated by technology, he told us. “Ben-Gurion thought the future was science. He would always say that in the army it’s not enough to be up to date; you have to be up to tomorrow,” Peres recalled.

So Ben-Gurion and Peres became a technological tag team. Peres and American swashbuckler Al Schwimmer started dreaming up an aeronautics industry while flying over the Arctic in 1951. But when they got back to Israel, they were met with stiff opposition. “We can’t even make bicycles,” ministers told Peres, in days in which a nascent bicycle industry was indeed failing, refugees were continuing to flood into the country, and basic foodstuffs were still being rationed. But with Ben-Gurion’s backing, Peres was able to prevail.

Later on, Peres’s idea of starting a nuclear industry was similarly written off. It was seen as too ambitious, even by Israeli scientists in the field. The finance minister, who believed that the Israeli economy should focus on textile exports, told Peres, “It’s very good you came to me. I shall make sure you won’t get a penny.” So with typical disregard for the rules, Ben-Gurion and Peres somehow funded the project off-budget and Peres went around the established scientists, turning instead to students at the Technion, some of whom he sent to France for training.

The result was the nuclear reactor near Dimona, which has operated since the early 1960s without mishap and has reportedly made Israel a nuclear power. As of 2005, Israel was the world’s tenth-largest producer of nuclear patents.¹

But Peres didn’t stop there. As deputy minister of defense, he pumped money into defense R&D, to the dismay of the military leadership, which, perhaps understandably, was more concerned about chronic shortages of weapons, training, and manpower.

Today, Israel leads the world in the percentage of its GDP that goes to research and development, creating both a technological edge critical to national security and a civilian tech sector that is the main engine of the economy. The key, however, is the way the entrepreneurial nation building Peres embodies