Israel’s Reputation as ‘Startup Nation’ Is Fraying, Survey Finds

While Israeli technology prowess is as strong as ever, other countries are surpassing Israel as a high-tech brand

Refaella Goichman
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A model of a car displays Intel Mobileye sensor technology at the Intel booth during CES International, in Las Vegas, Nevada, January 9, 2018.
A model of a car displays Intel Mobileye sensor technology at the Intel booth during CES International, in Las Vegas, Nevada, January 9, 2018.Credit: John Locher/AP
Refaella Goichman

Has Israel begun to lose its reputation as a high-tech power? A recent survey of international high-tech executives and decision makers found that most couldn’t identify some of the country’s greatest tech success stories as Israeli. Meanwhile, rival countries are earning their own reputations as “startup nations.”

Participants were more likely to identify Israel as a religious center or for its religious sites (13%) than as a center of “technology” or “software” (10%) or as a center for “innovation” and “research and development” (8%). Among 3,000 people polled, only 22 identified Israel principally with the term “startup.”

The survey, which was conducted by Bloom Consulting for the nonprofit organization Vibe Israel, found that the moniker “Startup Nation,” which Israel was branded with a decade ago in a bestseller by the same name, is now shared by a lot of countries that have since emerged as startup powers in their own right.

Germany, Romania and Finland have all spawned large numbers of startups, it noted. The European Union has even created a benchmark for countries aspiring to the status.

Israel’s biggest tech successes, which include Check Point Software Technologies, Waze and Mobileye, were identified by only 16% of the business leaders as Israeli. Most thought that Waze was either American (it was bought by Google in 2013) or British.

When asked whether a product that was made in Israel would command a premium or discount to the average market price, the answer was the latter, to the tune of 0.3%.

In addition to the core survey of 3,000 business leaders in 10 of the markets regarded as most important to Israel, Bloom conducted interviews with senior Israeli economic figures, analyzed data from 20,000 people surveyed in the U.S. News & World Report best Countries Ranking and examined internet search data from 2016 on. Israel was compared to countries regarded as rival startup centers, including the United States, Estonia, Finland and South Korea.

The search data showed that Israel and the United States had led online searches for terms related to high-tech in 2016 but that their numbers had declined since then. Searches involving Britain, meanwhile, rose 16%, Estonia by 54% and South Korea by 30%.

The report found it particularly worrying that searches related to starting a business in Israel, such as “starting a company in Israel,” “taxation in Israel” or “investing in Israel,” had either fallen or shown no increase since 2016.

Israel needs to adopt new, unique branding that speaks to the post-coronavirus era, the reports’ authors assert.

Israel retains its reputational strength in cybersecurity and in health care. But even in cybersecurity, where Israel is ranked No. 2 after the U.S., the survey found respondents would pay only a 2% premium for an Israel product, compared with 8% for a U.S. one. In health care, where Israel is ranked No. 4, there was no premium. On average, respondents said they would pay 2% less than for comparable products from Britain, the United States and Singapore.

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