Israeli business school exports secrets of a ‘start-up nation’

Source: Alamy

Hothouse powers: Israelis have a ‘born-global’ outlook

An Israeli business school claims to offer its international students some of “the secrets behind ‘Jewish genius’ and Israeli success” as a pre-eminent “start-up nation”.

Lahav Executive Education, which calls itself “the leading developer and provider of executive education in Israel”, forms part of the Recanati Business School at Tel Aviv University, the country’s largest higher education institution.

In recent years, Lahav has developed management programmes for entrepreneurs, executives and government officials, including joint international MBAs with the Kellogg School of Management, part of Northwestern University in the US, and shorter courses on doing business in Israel.

In December 2013, 20 young entrepreneurs selected by the South Korean government took part in an accelerator programme at Lahav. It is currently hosting a similar programme for 56 students from Argentina and Brazil and will shortly welcome a delegation from a large Italian bank.

So what are the specific advantages that an Israeli business school can offer?

Lahav literature suggests a number of reasons why Israel has “more high-tech start-ups and a larger venture capital industry per capita than any other country in the world” and why leading technology companies such as Apple, Google, Facebook and Microsoft “operate their largest and most productive labs and research facilities” there.

Compulsory military service “provides young Israelis with unique experiences and extensive responsibilities in a relatively autonomous environment where creativity, intelligence and the ability to improvise are highly valued”, Lahav says.

As a small country with a large immigrant population, Israel offers its entrepreneurs close proximity to investors and a “born-global” outlook based on an awareness that success can come only from looking beyond the restricted domestic market and “commit[ting] resources to international ventures”, Lahav claims. Government policies supportive of innovation and effective mechanisms for technology transfer between the academy and industry are also seen as important factors in Israel’s success.

All this may be true, but it can hardly be reproduced in Argentina or South Korea overnight.

“You can’t take the Israeli start-up model and do it in elsewhere,” said Udi Aharoni, Lahav CEO. What can be taught, however, is how to “penetrate the very closed ecosystem in Silicon Valley” that forms the core market for many tech companies, he added.

Mr Aharoni said he and his team explained to the Koreans: “You’re just like us. You’re very far away from your major market, speak what the Americans consider ‘a funny language’ and don’t understand the culture.”

Since the Israelis had found ways of overcoming such obstacles, their insights were transferable to other outsiders. American business schools, by contrast, might find it hard to understand the problems, he argued.

Among the regular visitors to the business school, as Mr Aharoni tells it, are “delegations from China representing very big companies”. In this case, Lahav’s approach is “all about collaboration”.

Israeli start-ups have “the advantages of cutting corners, being very flexible and moving very fast,” he continued.

“You can combine that with the Chinese ability to operate on a large scale. Then it’s a win-win situation. People from larger countries come and tap into the Israeli entrepreneurial mindset and our big ideas. Then they go away and upscale them elsewhere.”

matthew.reisz@tesglobal.com