Start-Up Nation: Israel's Economic Miracle

JERUSALEM, Israel - How does Israel - one of the world's smallest countries - produce more startup companies than many of the world's most developed nations?

It's a trillion dollar question and the answer can be found in a new book investigating this modern phenomenon.

With a population of slightly more than seven million people, Israel leads the world per capita in technology startup companies.

One reason for Israel's leading role is its military and the kind of innovative leaders it produces.

"Veterans of the Israeli military, once they retire, join the commercial market and they apply the different cutting edge technologies in the medical market, telecommunications, cellular market, etc.," Israeli economic analyst Yoram Ettinger told CBN News.

As a result, Israel is credited with developing technologies like the cell phone, voice technology, and even the Intel Pentium chip.

Israel also puts a premium on research and development, with many more people per capita in this field than any other country in the world.

For example, in the Jewish state, 140 people per 10,000 work in research and development. The U.S. is number two in the world, with 85 people per 10,000.

"It just shows you how robust the human factor is here in Israel, and the outcome has produced per capita more cutting edge technologies than any other country in the world," Ettinger said.

A new book called Startup Nation, the Story of Israel's Economic Miracle, by author Dan Senor, examines how tiny Israel is a technological giant in today's global economy.

It argues that Israel is not just a nation but a state of mind, and its old fashioned chutzpa goes a long way toward economic prosperity.

It also shows how other nations - and individuals - can learn from Israel's example.