Beyond Tel Aviv: How the rest of Israel is truly becoming a ‘Startup Nation’
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Photo Credit: israeltourism

In general, the “Startup Nation” has mostly referred to the Israeli city of Tel Aviv. Here’s how Jerusalem, Ashdod, and Nazareth, among others, are stepping up their startup game.

California’s Silicon Valley has for years been eyeing with growing interest what has come to be known half-jokingly as “Silicon Wadi,” the Israeli startup scene.

And indeed, ever since “Startup Nation” became Israel’s official nickname, the country boasts that it is the place, second only to its California role model, for creating new businesses and achieving best exits. But in general, the “Startup Nation” was mostly referring to the city of Tel Aviv.

In recent years, however, that has started to change, with more and more startup centers dotting the Israeli map.

Technological companies have been spread out around the country since the 1960s, and especially with the advent of computer systems in the ’80s and the Internet boom in the late ’90s. Israel was an important player, but never as important as other technological hubs in the industrialized world.

Over 5,000 startups established in recent years now operate in Tel Aviv, with a population of 415,000. This makes Tel Aviv the high-tech hub exceeding, per capita, other players such as Paris, Moscow or New York, with the most engineers and tech professionals in the world, percentage-wise.

Does that mean that this fairly small city has something more special to offer and that Tel Avivians are more entrepreneurial than the residents of a city like Beersheba, for example? Apparently not, but that has only started to be obvious in the past few years, which have seen 600 to 900 start-ups launched annually.

Jerusalem, Ashdod, and Nazareth could become Israel’s next big high-tech hubs

The development of Jerusalem as a high-tech center, for example, is mainly being steered top-down. The city is the only centrally located place to enjoy the status of a top development location, entitling technology-based companies and investors to benefit from the best grants and tax incentives available in Israel today. These include R&D assistance grants of up to 60% of approved R&D programs, significant corporate tax reductions or unique grants of up to $160,000 for young companies established in or moving to Jerusalem.

In the coastal Mediterranean town of Ashdod, the high-tech environment was created by the municipality’s entrepreneurial approach to the city’s development. Thanks to cooperation with industry leaders, Ashdod is going to shine bright on the startup map within the next few years. TheHive Ashdod by Gvahim – a startup accelerator – created the first wave of young entrepreneurs living their dream in the south of Israel.

New incubators, such as the food tech program established by the Office of the Chief Scientist, together with the food giant Strauss, will move to Ashdod next year. The city is planning a hub and other incentives to draw young companies.

Nazareth – the bottom-up example – may be the least obvious place on the startup map, but after starting the first Israeli Arab accelerator nazTech in 2013, the city is on a fast track in its development. Now, with companies such as Beam Riders and Optima Design Automation, Nazareth proves that the Startup Nation is not only about Israeli Jews.

There are many more incentives that are expanding the map of the Startup Nation to its natural borders. Beersheba, Modi’in, and the Arava region are other places worth noting, proof that the Startup Nation is not an overnight marketing stunt, but a desert country rich in human resources.

Featured Image Credit: israeltourism at Creative Commons

This post was originally published on i24 News

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Monika Rozalska

About Monika Rozalska


Monika co-manages a startup accelerator TheHive Ashdod by Gvahim – a program for internationals, Israelis and new immigrants in Israel to create successful startups in the startup nation. She helps entrepreneurs with communications and branding, strategy and go-to-market.
Her interests include startups, innovation and its management, technology transfer and investor-startup relations.

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