Israel is enjoying an impeccable reputation as one of the start-up friendliest places on the globe. What do you think is Israel’s key to such success? What do you think needs improving?
There are several factors that have made Israel’s startup scene so successful. An innovation cycle based on synergies between market opportunities, government support, an open business culture, and a large ecosystem has enabled Israel’s rich ecosystem to thrive. This innovation cycle is made possible by the cultural aspects that shape the Israeli population such as multiculturalism, a willingness to take risks, ambition, and flat hierarchies, which all lead to a special readiness to act quickly and to “just go for it”.
Another important factor is “necessity”, as we would say in German “Notwendigkeit ist die Mutter der Erfindung” or in English “Necessity is the mother of innovation”. The State of Israel is relatively small, lacks natural resources, and is often confronted with water shortages that lead to food shortages. Innovative ideas are of utmost importance to ensure the population’s survival.
However, there is always room to grow. The country could benefit from furthering the incorporation of the Arab population into the high-tech sector as well as from the relaxation of work permits, which would allow more foreigners to enter the country, leading to even more growth and diversity.
How would you describe the current trends in Israel’s startup scene?
Currently, Israel is focusing on the following trends:
Cybersecurity, AI & automation, digital health, and climate tech.
Cybersecurity has always been an important field in Israel due to its necessity. AI & Automation are specifically focusing on the robotics field. The digital health sector has always been a topic of focus; however, the pandemic situation has strengthened it specifically in the telemedicine field.
In the climate tech sector hydrogen is becoming a focus topic. With startups such as H2Pro, the companies are trying to find new ways to produce, to store and to distribute hydrogen.
Given this great reputation and conditions, what makes Germany such an
attractive destination for Israeli Startups?
Germany is one of the leading countries in the European economic area and has
the largest market within the European Union. This is accompanied by a large
industrial sector that is known for its diversity. Furthermore, the central location
of the Federal Republic of Germany with its progressive and economically strong
neighboring countries such as France is also very lucrative from a geographical
point of view. Especially the membership in the European Union makes further
markets more easily accessible and thus holds great potential for expansion.
Besides that, the pressure in Germany and Europe to keep up in the areas of
digitization and innovation is high. High-tech companies from Israel can
counteract this pressure with innovative ideas and solutions and thus offer one
of the best possible cooperation. Israelis, on the other hand, can learn from
German organizational talent how to scale processes sustainably and develop
long-term strategies.
The CEO of our AHK Israel, Grisha Alroi-Arloser, summed it up very well:
Israelis show Germans how to fly and Germans show Israelis how to land safely
and smoothly.
How do you prepare your startups for the tour and Germany?
It is important to sensitize Israeli startups to the intercultural differences that
exist between the two populations.
While work and private life merge in Israel, Germans prefer a strict separation of
these spheres. This includes very simple issues such as the formal tone and the
necessary politeness in everyday business life, which in Germany means, for
example, not to address a potential business partner by his first name or to be
punctual at appointments.
Furthermore, Israeli startups need to be prepared for the fact that processes in
Germany are more organized, thus things are moving slower.
We do recommend our startups to participate in the well-organized pre-startup
program of the Start.up! Germany Tour as it offers a very good opportunity to get
business insights from German companies about the German market and its
business culture.
What do you think is the main advantage of the tour and what would you change to make it even better?
One of the most important advantages is certainly the internationality of the tour and with it the opportunity to get to know not only German companies but also startups from all over the world. Thus, the tour offers an amazing platform to make new contacts and learn about new trends and ways of thinking.
The only thing we would change to improve the tour, would be to allow even more startups the chance to participate in person and not just virtually.
