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Israel’s Technological Prowess and Entrepreneurial Successes
Israel’s dominance in defense and technology has its origins in the country’s tumultuous beginnings and inherent
fighting spirit against more populous nations at its borders. Also, Israel’s high-tech boom was fuelled by grants to
scientists, military-research projects, engineers and scientists immigrating from the erstwhile Soviet Union, and the
sprouting of foreign semiconductor factories. Large-scale immigration from Russia and East Europe helped augment
Israel’s human capital. Especially, the Russian scientific expertise helped trigger a technology revolution in Israel....
Venture Capital
The Israeli Venture Capital (VC) industry is said to be the largest industry of its kind, outside the United States. It
was born in 1985 when Dan Tolkowsky, head of Athena Venture Partners created a $25 million fund. With 100 active
funds and over $10 billion23 under management, Israel’s VC industry is one of the most vibrant sectors in the country
(Exhibit IX). In a land with a population of 6 million, that capital helped start up 3,000 companies, one for every 2,000
inhabitants.24 As the global demand for IT products is on the rise, the future looks rosy for most Israeli high-tech
companies...
NGT’s Dilemma
NGT, established in July 2002, is part of the National Incubator Programme that supports and encourages entrepreneurial
projects in the fields of technology and biotechnology. Five IsraeliArab businessmen along with their Jewish
partner, Davidi Gilo, founded the venture. It is the first of its kind, owned by Jewish and Israeli Arab business people,
to encourage entrepreneurs from both quarters. NGT’s business model combines equity and investments to help
support the entrepreneurs in their enterprise (Exhibit XI). Israeli Arabs account for one-fifth of the population; yet lag
behind Jews. Economic disparities separated the Jewish and the non-Jewish population. It is believed that their
exclusion from the Israeli military made them economically backward. Absence of social networks affected their commercial
activities and impeded their growth...
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