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An entourage of 50 Australian entrepreneurs, innovators, investors and business leaders recently returned from Israel on a mission to discover the secrets behind Israel’s startup scene.

Led by Assistant Minister for Innovation Wyatt Roy, the one-week trade mission focused on how Israel’s startup ecosystem has grown to attract more investment per capita than any other country in the world. In 2015, Israel’s 6000 startups attracted $US5 billion. Australia has only $300 million invested in 1500 startups, despite having nearly three times the population. US high-tech stock exchange, NASDAQ, lists more Israeli companies than India, Singapore, Japan, Korea and all of Europe combined. So what has made Israel’s startup scene so successful? What can Australia learn from the Startup Nation?

1. Fostering a Startup Culture

Israel has one of the world’s highest concentration of startups. With 40% year-on-year growth for startups in Tel Aviv, the main contributing factor to its booming startup scene is the role of its innovative culture.

They have a nation engaged in innovation. If you ask a mother what career they want for their kid, a lot of them will say they want them to start up startups,” says Sarah Pearson, Chief Executive of CBR Innovation Network and attendee of the Australia-Israel innovation trade mission.

Australia’s startup culture is relatively new, mostly concentrated as startup incubators and accelerators. Startups need to be studied and appreciated by schools and universities to breed talent and create new opportunities. An increased focus on STEM (science, technology, engineering and mathematics) subjects will lead to a stronger entrepreneurial ecosystem. Australia can easily foster a startup culture founded on our high enrolment in tertiary education and safe business environment. By leveraging our capital and talent, we can lead innovation in the Asia-Pacific and beyond, and keep Australian talent from being poached overseas.

2. Attracting R&D and Talent

Israel is a global leader in research and development. Roy refers to the country as the “global golden standard when it comes to innovation.” The amount Israel spends on research and development is currently 4% of GDP. In Australia, this is a mere 2.4%. Australia currently allocates around $9 billion a year for research. The government needs to examine its role closely, whether it is sharing more of the data it collects or developing more infrastructure to boost connectivity, innovation and productivity. Taking Israel’s lead, Australia must focus its research and development on industries where it can have a competitive advantage such as agriculture or mining.

Australia should also aim to attract new talent into the country to boost its research and development. Last month, Israel launched a ‘startup visa’ to allow entrepreneurs from around the world to work at startups in Israel for up to two years. While the visa is currently on an invite-only basis, the initiative helps to cement the country as a global centre for innovation. Australia can implement similar initiatives to break down borders to attract talent as well as forming collaborative agreements with other countries to allow entrepreneurs to move more freely.

3. Moving Away From Natural Resources

Israel has been unable to rely on natural resources for its economic growth. Instead, the country has invested heavily in technology innovation to address issues such as access to water. Today, Israel is leading the world in salt desalination technology.

Australia has enjoyed 25 years of uninterrupted economic growth, in part due to the mining of gold, diamonds, coal, and iron ore copper. 72% of our exports by value over the last 12 months were from natural resources. Australia’s future growth must move away from resources in the ground to resources in the cloud. Diversifying and making a stronger commitment to innovation will be crucial to our global competitiveness and future prosperity.


There’s never been a better time to be a startup founder in Australia. The Israel-Australia trade mission is the strongest message yet that the government is supporting an entrepreneurial culture of disruption and innovation. The government must continue reforming laws to reduce regulatory friction and make it easier for startups to get off the ground. Nothing is stopping us from becoming one of the biggest startup ecosystems in the world. But we must seize this momentum and opportunity.


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