Israel’s investment in startups is the highest in the world, as the Middle-East nation invests up to 4.5 percent of its GDP into startups - mainly those related to technology.
By June this year, Israel’s tech sector broke a new capital-funding record, with firms raising a total of USD 10.5 billion in only about 6 months, matching the total raised in the whole of 2020 – which had been a record year itself.
The majority of the funding from the government goes to cyber security, fin-tech, and enterprise solutions companies.
According to figures from the Israel National Cyber Directorate (INCD), in the first half of 2021, the country’s cyber industry witnessed 7 new cyber unicorns (private companies that are worth over USD 1 billion), in addition to more achievements, for example, registering more than 20 acquisition transactions at an estimated value of 4.7 billion dollars.
The INCD, among other responsibilities, works to maintain the posture and standing of the Israeli cyber industry by means of grants, accessibility to know-how and infrastructures and introducing the Israeli industry to foreign markets and customers.
Statistics continue to show that 1 out of 3 cyber unicorns in the world are Israeli, and 41 percent of global investments in cyber funding rounds are in the Middle-East country.
As a result of such impetus injected into the industry, Israeli companies have established themselves as some of the best in providing robust cyber-tech solutions that are used across the world, and this brings in a lot of money into the country, making up for the economic difficulty that would have resulted from the fact that Israel is not rich, as far as natural resources are concerned.
Such a model of doing things can also be beneficial for African countries, says Teddy Kaberuka, a Rwandan economic analyst.
"This sector of startups is one that needs high support. Israel is a very good example of countries where startups are well incubated and supported, and this brings a lot of growth. But in Rwanda, to the best of my knowledge, I don’t know any support given to startups. I would even say we don’t really have startups here, because young entrepreneurs are struggling to get the financial support and technical know-how from experienced experts,” he said.
He however noted that Rwanda should not prioritise only one sector while supporting startups, since the country’s context of advantage is not the same as that of Israel,
"Israel has put special focus on startups in technology because it is the sector where they have advantage, and it has worked for them. We have seen their best brains collaborating with Silicon Valley in developing tech solutions. But in my opinion, Rwandan shouldn’t prioritize sectors, because we still have an economy that can grow from any sector, ranging from agriculture, service sector, I.T and so on,” he said.
"Giving chance to many sectors would even give opportunity to different entrepreneurs, mostly those that are in rural areas. Some opportunities are rural-based, and if there is focus on one particular sector, this could limit the opportunity to support many entrepreneurs,” he added.