Israel, a small country with a population of just over 9 million, has produced more successful tech startups per capita than any other country in the world. This level of industry has led to Israel’s nickname: the “Startup Nation.”

In 2022, there were 9,484 active high-tech companies in Israel. In this article, we will explore the reasons why Israel has become such a hotbed of innovation and entrepreneurship.

The IDF’s Influence

The Israeli Defense Forces (IDF) plays a significant role in Israel’s success as a startup nation. Many of the country’s entrepreneurs and startup leaders have served in the IDF, as Israel is a country with mandatory conscription.

Many of Israel’s entrepreneurs credit the IDF for giving them skills and experience in areas such as technology, leadership, and problem-solving.

The IDF has a number of technology units, such as the 8200 Intelligence Unit and the Talpiot program, which are known for their cutting-edge technology and innovation. Many of the soldiers who serve in these units go on to found startups or work in the technology industry after completing their service.

On top of the skills that these entrepreneurs learn in the army, the networks they build provide a strong foundation for their future entrepreneurial ventures.

The military also provides opportunities for soldiers to learn about and experience different aspects of the business world, through programs such as the “Entrepreneurs in Training” program, which helps soldiers to develop business ideas and connect with potential investors.

Unit 8200

“Unit 8200 is a technology unit within the Israeli Defense Forces that plays a significant role in Israel’s success as a startup nation,” explains Ben Sweiry, the founder of Dime Alley and ex-soldier in the Israeli army.

“The unit – probably the IDF’s most famous – is responsible for signals intelligence and cyber warfare.”

“Unit 8200 is made up of highly skilled and highly educated soldiers, many of whom go on to become leaders in the technology industry after completing their service. The unit is known for its cutting-edge technology and innovation. Its soldiers are equipped with valuable skills and experience in software development, data analysis, cybersecurity, and other areas.”

Many of the soldiers who serve in Unit 8200 have gone on to found startups or work in the technology industry after completing their service. The unit has produced a number of successful startups, such as Check Point Software Technologies, a cybersecurity company that is now one of the largest in the world.

The unit also plays a significant role in the Israeli startup ecosystem by providing mentorship and networking opportunities for entrepreneurs. Many of the soldiers who served in Unit 8200 remain connected to the unit after completing their service.

The Yozma Programme

The “Yozma” program was launched by Israel’s government in 1992. The goal was to help veterans to found and develop their own startups. The government scheme made $20 million available for startups.

The government would retain 40% equity, but partners were given the option to cheaply buy out that stake with interest after 5 years. This meant that under the Yozma Programme, many Israeli startups were provided with the funding that they needed to get off the ground.