Why Some Countries Are More Innovative Than Others

Have you ever asked yourself what makes a country innately successful at innovation?

We can begin to answer that question by taking the two examples of the United States and Israel, probably the leading nations for their amount of technological innovation. The United States holds the highest number of patents per capita, and Israel has the highest number of startups per capital, compared to everywhere else in the world.

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Where does this success originate? Many people attribute it to characteristics the two nations share: heterogeneous and multi-faceted immigrant populations, huge government investment in defense (a catalyst for commercial innovation), strong democratic values, commitment to intellectual property protection and educational systems that emphasize independence, debate and experimentalism.

In my opinion, however, these reasons don’t completely account for the success of either country. Instead, I see it as a shared essence bubbling beneath the surface and binding these countries together as successful innovators

That essence, in my opinion comes from the fact that both countries share a deep respect for the entrepreneurial spirit because the countries themselves are quintessential startups.

A whole, equal to each individual part

We can compare both the United States and Israel to the geometric concept of a fractal -- an infinitely complex pattern which, when closely examined, contains the exact same pattern at both the smaller and larger scale. It’s basically a huge system whose even tiniest element is an exact microcosm of the whole.

The founding vision of the United States was that of a country with religious freedom and equality for all. This vision succeeded in persuading many immigrants to leave their native lands and build the new nation that would later become known as the “land of opportunity.”

With the start of the Gold Rush and the expansion west, the pioneering spirit deeply embedded itself into American culture. The willingness to take big risks, trust diverse groups of strangers and improvise quickly with few resources all became characteristics of the national identity and American vision. It shouldn’t be a surprise that these are also the most important qualities of any successful startup.

Israel reflects similar characteristics, albeit as a smaller, yet in many ways equally successful, startup nation. Home to just eight million inhabitants but also to 72 companies listed on the NASDAQ, this 66-year-old Middle Eastern country clearly merits recognition as a giant of technological innovation.

Like America, Israel was founded on religious freedom -- in its case, the freedom of Jews anywhere in the world to build a singularly Jewish nation, free from persecution. Israel's vision of a safe haven for Jews has succeeded in attracting a heterogeneous group of immigrants from around the world who started out with little or no resources.

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In the days of the early founding of the state, it didn’t matter who you were or where you were from -- only that you were helping to build the country.

A top-down approach to innovation

Without a doubt, some of Israel’s greatest natural resources are the minds, work ethic and innate confidence of its people. Often, they are aised to question the status quo and, when appropriate, challenge authority.

But there's more to it than that. In their bestselling book Start-up Nation, authors Dan Senor and Saul Singer give credit for the country’s global success to its supportive government policies. An example is the Israeli government's willingness to jumpstart innovation by extending substantial financial support of commercial R&D.

The results speak for themselves: Israel boasts the highest concentration of engineers in the world and has attracted more than twice as much venture-capital funding per person than has the United States, and 30 times more than the nations of Europe.

We see a similar approach coming from the U.S. government, which has reinforced the traditional belief in “The American Dream” by delivering tax breaks, investments and public policies that have fostered and even celebrated a culture of innovation.

Both the United States and Israel are very much "startup" nations. Whether focusing on aviation technologies, space technologies, the internet, nanotechnology or the mobile sector, they're constantly reinventing themselves by embracing risk, emphasizing innovation and encouraging individual freedom.

For both countries, these values start at the top of the government institutions and extend down to the corporate level, family structures and individual businesspeople.

Each nation has a a set of smaller parts that replicate the patterns of the whole; this makes companies both large and small microcosms of the nation to which they belong. And for both, success has occurred on a large national scale as well as among the many companies and organizations that make up the "smaller scale" -- just like fractals.

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