Toward a Thriving Innovation Nation

Israel today has two very distinct and separate economies: The Innovation Economy and the Traditional Economy. Each requires its own policies, talent and financing mechanisms to grow. Sadly, they have little in common, and seem to be pulling further apart

Eugene Kandel
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Eugene Kandel
Eugene Kandel, CEO of Start-Up Nation Central and Emil Spyer Professor of Economics and Finance at the Hebrew University of JerusalemCredit: pr
Eugene Kandel
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It’s true that this same process is unfolding in many places around the world, but in tiny Israel, with its unique set of challenges, these two economies – the Innovation Economy and the Traditional Economy – must learn to interact and co-exist in harmony in a single society. The country’s security and social fabric depend on it.

Israel’s Innovation Economy increasingly faces intense competition from both established and emerging global tech hubs. The world is hungry for top engineering talent, and Israel’s start-ups, tech entrepreneurs, and researchers are some of the most sought-after talent globally. The Government of Israel understands the competitive threat, and thus the Innovation Economy is less regulated and less taxed, but this is not enough anymore.

There are worrying signs that the Innovation Economy has been slowing down. While 8% of the Israeli workforce works in tech – the highest percentage anywhere – it is not enough. As competition intensifies and countries with vastly bigger populations join the innovation race, Israel’s Innovation Economy must rapidly grow, or it will shrink. If it grows fast and smartly, Israel can retain its place as one of the world’s main hubs of innovation. If it shrinks, Israel’s economy will suffer. The biggest obstacle to growth is the shortage of local tech talent: if companies can’t hire the skilled talent they need, they can’t grow. The other main obstacle is the limited connectivity of the Israeli tech sector to challenges around the world that it can address with innovative technologies.

Given its challenges and rapidly changing worldwide conditions – trade barriers, taxes on IP, data regulation – Israel’s tech sector needs a coordinated national innovation strategy that supports rapid growth. Such a strategy must ensure that Israeli tech firms have access to the world’s relevant challenges and markets, while creating optimal conditions for firms to start up and grow to their full potential in Israel. Strategy must be constantly reevaluated and modified to keep pace with rapidly changing business models and competitive environments.

Welcome to Start-Up Nation Central, a non-profit whose mission is to help Israel continue as a thriving innovation center, globally recognized as such. Our work focuses on addressing two main goals: to better connect corporations, NGOs and governments around the world to Israeli innovation; and to help identify and create the required conditions for technology companies to start up and grow in Israel. To be able to do this work we need to be trusted by key stakeholders, both within Israel and abroad. This is why SNC is structured as a non-conflicted, non-affiliated non-profit that represents the interests of the Israeli tech sector as a whole. We don’t charge for any of our services. Our goal is to help Israel’s innovation pipeline stay relevant and grow, and to continuously enhance the world’s connectivity to this pipeline.

We believe that SNC’s purpose and independent structure, as well as its flexibility to respond fast, allow it to augment and enhance the work of government, industry and NGOs, while maintaining a strategic outlook on the innovation sector.

SNC has three main pillars of activity: We collect deep knowledge about Israel’s innovation sector; we connect the sector to the world; and we help create a conducive environment for tech companies to grow in Israel. SNC gathers knowledge about all the aspects of the Innovation Economy, generating many types of insights, research reports and up-to-date statistics for various stakeholders. Through Start-Up Nation Finder, an innovation discovery platform we developed and continuously curate, we help anyone anywhere in the world get free, user-friendly access to the thousands of innovation companies, investors, hubs, research organizations, and multinationals that make up this ecosystem. Separately, SNC actively collaborates with large corporates, NGOs and governments who share with us their pressing challenges, so that we can find the tech innovations in Israel that could potentially address them. We also help develop the connectivity between Israel and nascent tech ecosystems through collaborations with large organizations in India and Africa.

SNC maintains a robust dialogue and partners with the Government of Israel, the industry and NGOs. We also develop long-term strategy and related policy proposals, analyze the effects of regulatory practices, and support various communities and regional innovation ecosystems. We specifically focus on the development of high-potential yet overlooked sectors like Agri/FoodTech; Digital Health and Industry 4.0.  These will impact people’s food, health, and jobs the world over.

We help identify and prepare new sources of talent with a special emphasis on bringing more women, Haredim, and Israeli Arabs into the Innovation Economy. With partners, we’ve designed innovative and ambitious pilot programs that aim to tap into this talent pool.

SNC is a dynamic organization, whose purpose is to connect the world to Israeli innovation, and to help nurture Israel’s innovation engine. Wherever our mission takes us, we will always strive to remain independent and un-conflicted. The credit for this goes to our philanthropic funders, whose strategic vision and dedication guide us and allow us to succeed in our mission.


Eugene Kandel is the CEO of Start-Up Nation Central and Emil Spyer Professor of Economics and Finance at the Hebrew University of Jerusalem.

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