In the United States, Silicon Valley – the southern portion of San Francisco Bay that is home to the world's largest tech companies – is the hub of innovation. But now, attention is turning to Israel's Silicon Wadi.
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Silicon Wadi (Wadi means "valley" in Arabic) is located throughout the country, but primarily in the plains around Tel Aviv and in Ra'anana, Petah Tikva, Herzliya, Netanya, the academic city of Rehovot and its neighbor Rishon Le Zion.
Like the Valley, the high-tech industry in Tel Aviv grew significantly in the software boom of the 1980s and 1990s, according to the Financialist. New privately funded R&D firms from international companies popped up there, creating opportunities to maximize value in a small market before quickly selling the tech innovations to a bigger corporation, according to
The Financialist.
The prevalence of start-ups in Silicon Wadi is second only to its Californian counterpart, according to
VentureBeat. One of the reasons for this epicenter of Israel tech is the cultural ethics that prioritizes community support, a vast difference from the general atmosphere of Silicon Valley startups. Public grants and support of academic-based research is strong in Israel.
"Perhaps Israel isn't so far from its roots after all, and the kibbutz mentality is alive and well in the Startup Nation," notes VentureBeat.
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Tel Aviv is ranked fifth on the Startup Genome's list of top ecosystems for newly launching companies – behind only Silicon Valley, New York, London and Toronto, according to
AdWeek.
However, Silicon Wadi also has more startups per capita than anywhere else, and it has 61 companies on the NASDAQ,
Forbes magazine reports. Some reasons that set the Tel Aviv hub apart from its San Francisco sister include the strong relationships that help with networking, required military service for young men and women, causing quick maturity and development of problem solving skills, as well as Israel's welcoming atmosphere for immigrants, notes Forbes.
The Economist described Silicon Wadi another way: An act of patriotism. The executives of startups in Tel Aviv work hard and have great pressure to sell to bring honor to the Jewish Nation instead of building their companies. So, while startups in Silicon Valley may be selling for more, that may someday change.
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