Promised Land of Progress: How Israeli Companies Thrive Amidst Hostile Neighbours?

Israel has often been dubbed the ‘startup nation’ in two different connotations. Its entrepreneurial community boasts of some of the world’s most notable companies in the domains of cybersecurity, artificial intelligence and defence. On the other hand, the turbulent growth story of the Israeli state itself has earned it the moniker of ‘a startup among nations.’

Illustration by The Geostrata

This article argues that the former came into being because of the Israeli state’s necessity to innovate in order to survive. Founded in the middle of objections from its neighbours in 1948, the independent Israeli state was immediately launched into a war with the Arab League. 

Founding Prime Minister David Ben-Gurion hastily raised the Israel Defense Forces (IDF) by consolidating the Haganah and other Jewish armed groups into a singular body. 

Thereafter, defence became the first major breeding ground for Israel’s technological applications - the IDF proved to be a fertile hotbed for innovation and went on to form the base for the Israeli civilian tech ecosystem. 

WHAT PROMPTED ISRAEL AND THE IDF INTELLIGENCE CORPS TOWARDS RAPID TECH ADOPTION?

Prior to feverish arms acquisition efforts in 1948, the Israelis did not have any major combat assistance. It was only after an extensive arms smuggling operation that combat support divisions were mobilised and put into action during the war. This acquisition, particularly the arrival of 23 modified Messerschmitt Bf 109 fighter aircraft, won Israel the war and awakened it to the need for an advanced industrial base for mass manufacturing of weapon systems.

They were able to replicate this in two fronts in the 1967 Six-Day War, where their French-made fighters flew sorties into the Golan Heights against top-of-the-line Syrian MiG-21s and their armoured divisions bagged them the Sinai Peninsula with impressive tank formations against the numerically superior Egyptians. 

Parallelly, Israel realised that due to its small size compared to its neighbours, it would need to rapidly introduce technological counterbalances in the form of highly advanced intelligence gathering methods to supplement its armed forces. 

The period after the war saw the formation of the backbone of Israel’s intelligence apparatus - the Mossad and the Shin Bet were founded in 1949, and the Aman was founded in 1950. 

While the Mossad executed daring cross-border missions and special operations, the Aman quietly built its data collection streams. One of these internal streams was established in 1952 and made responsible for the collection and processing of signal intelligence (SIGINT). It came to be known as the Central Collection Unit, or Unit 8200. More than five decades would have elapsed before the existence of the unit would be publicly acknowledged. 

HOW DID THE IDF COME TO FORM THE BEDROCK OF THE ISRAELI ENTREPRENEURIAL COMMUNITY?

Today, Unit 8200 is the largest unit in the IDF , comprising thousands of soldiers. The conscription policy of the IDF acts as a feeder for the unit, and the 18-21-year-old enlistees are put through rigorous tests of hacking ability, psychology and team functioning. The scouting and grooming process for young talent starts in the late teen stage (16-18 years old) - Unit 8200 sources most of its recruits from the cream layer of after-school computer and coding programs. 

The young soldiers then serve for a short period and transition to civilian life after completing their required service.

Inside Unit 8200, the soldiers are tasked with handling stakes of enormous proportions - hacking into enemy government programs, breaking encrypted communication systems of hostile elements, relying on and processing satellite data to gain access to calls and messages and many more functions whose scope is classified. 

By the time they leave service, typically at 21-23 years of age, they have work experience in cybersecurity and technology that is unmatched by professionals their age in countries such as the US, the UK and Germany. 

This experience acts as a springboard for their career outside the military, and most Unit 8200 alumni go on to found and run successful startups. One of Unit 8200’s most prominent success stories is that of Avishai Abrahami, who after leaving the unit founded Wix.com, one of the world’s largest software companies that offers cloud-based web development services. 

Other prominent Unit 8200 alumni products include network security provider Check Point, satellite navigation software provider Waze and senior partners in venture capital firm Sequoia Capital. 

In a way, the entire Israeli startup ecosystem is incubated by the IDF. Tech companies within Israel and the Silicon Valley count Unit 8200 experience as one of the most valuable attributes that an applicant’s resume can have. Similarly, venture capitalists and investors are willing to make heavy bets on Unit 8200 alumni due to the advanced nature of their work experience. 

While someone with a university degree in cybersecurity would only have the requisite skills for an entry-level role, Unit 8200 alumni are equipped with a skillset and are prepared for challenges much further up the ladder. 

KEY TAKEAWAYS FROM THE CASE OF UNIT 8200

Since their inception, the state of Israel and its defence forces have played an indispensable role in cultivating Israeli talent to the advanced stage it is in today. Israeli tech developers, all of them ex-IDF service members, are one of the most skilled and sought-out workforces in the world. The rich and vibrant startup ecosystem is therefore a natural progression in this sequence of products forged in the process of navigating numerous existential conflicts. 

The Indian educational framework can absorb a few lessons from this case - the most important one being: place greater importance on experience than on formality, and give young minds ample opportunities to operate in challenging circumstances.

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BY ADHITYA BHARGAVA

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