Bear in mind, when considering the relationship between Silicon Valley and Israel, this is not Detroit versus Tokyo. It’s not that sort of nationalistic, zero-sum rivalry.
It’s an additive relationship – one that is emerging as an instructive, vitally important transnational model for developing and selling new, transformative technologies. This is particularly true in cybersecurity, where the adversaries we fight are increasingly stateless or at least noncommittal when it comes to national allegiances.
The Israeli tech industry has grown beyond its original national defense focus to become a major aspect of the global “tech funnel.” More than 50 percent of Israeli export sales come from the high technology or life science industries. When it comes to generating new tech companies, Israel today places second only to the United States on a per capita basis. Israel has the world’s highest percentage of engineers, and the Israeli Defense Forces supply the private sector with tech talent pre-equipped with leadership and problem-solving skills.
In the long run, the best technologies gravitate to the top – and Israel generates some of the best. The playing field levels quickly. So why doesn’t Silicon Valley feel threatened by the rise of an alternate power center? Especially in cybersecurity, the two represent complementary strengths.
Israeli cyber startups are often the brainchildren of seasoned defense veterans: practitioners of cyber offense. They tend to examine a security challenge from a pragmatic, aggressive, attack-and-defend standpoint. That is exactly the perspective required today. Silicon Valley tends to prize solutions that are the most viable from a sales-and-marketing standpoint, but today’s security imperatives have raced beyond the typical (often cautious or budget-strapped) enterprise customer agenda. Israeli urgency, combined with pure tech expertise, is welcome here.
What can Silicon Valley offer Israel? Management and market execution. The isolation of many Israeli tech firms is a limiting strategy. We have a long history of bringing great, transformative, eventually dominant technologies to market and running the alliances, channel marketing strategies, and distribution channels that drive success. We also have a whole ecosystem of regular customers that come to Silicon Valley to see what’s new. The Israeli propositions that fare best in the marketplace invariably relocate their headquarters to California.
There’s definitely synergy potential here.
Israeli defense and intelligence connections run deep through the Tel Aviv tech sector. But I see no genuine reticence in Silicon Valley about it, despite wary and contentious commentary here about U.S. government intelligence and surveillance practices. Why? The most intriguing Israel tech propositions are often startups with less leverage. When such companies grow beyond the $100 million revenue mark and start mushrooming into enterprise businesses, with accompanying influence, that’s when those concerns arise, but by then a more transnational management model has usually taken hold. At any rate, so many of today’s big technology winners have roots in Israel.
(Full disclosure: I’m an investor in two Israeli technology start-ups.)
You’ll note that cybersecurity in the private sector is rarely, if ever, any longer marketed on patriotic or nationalist terms. The threat is global, as are many of the malefactors we combat. Cyber conflict is less and less between nations and more a cascade of face-offs between civilized, virtuous interests and roaming agents of criminality or mere chaos—another reason to cast off the obsolete Detroit-versus-Tokyo analogy.
For technology interests, the key to remaining in the forefront is bringing more transformative, well-secured technologies to market. Today, we see a disquieting emphasis among US companies on sales and marketing. We expend a lot of money competing with one another, but the long-term winners will triumph with superior technologies, not the most eye-popping marketing campaigns dressing up airport concourses or football arenas. Technology is job one, and that’s why a pragmatic, complementary alliance between Tel Aviv and Silicon Valley is so important to our long-run security.
