Monday, December 6, 2010


I have thought for quite a while now that Uganda’s economic planners should make a pilgrimage to Singapore and Dubai.

I haven’t been to Singapore but have read the founding father Lee Kuan Yew’s book “From Third World to First: The Singapore story” and believe it should serve as the prototype for development.

I have been to Dubai and what they have been able to conjure out of the desert in terms of infrastructure and a general corporate dynamic some say is unmatched except maybe by Hong Kong, is just a wonder. The harnessing of the private sector while itself becoming a super efficient state is something we badly need to learn.

And now I add Israel to the list of must visit countries for the men and women of the Planning ministry.

“Start-Up Nation: The story of Israel’s Economic Miracle” is a book that tries to deconstruct the economic success of the Jewish state.

To appreciate the miracle of Israel understand that this is a country, were it a square would not be as wide as the distance from Kampala to Masaka. Mostly desert, it was described by Mark Twain as a “desolate country … a silent mournful expanse.” It has a population of seven million people most of whom are at least second generation immigrants.

Since independence in 1948 Israel has lifted itself from a besieged backwater to a high tech hub, while growing its economy fifty fold and this despite fighting three wars and being in a state of perpetual tension, “Totally unmatched in the economic history of the world,” according to Israeli political scientist Gidi Grinstein.

At the bottom of small Middle Eastern country’s success is the entrepreneurial spirit of its people.

It has more start up companies per capita than any place else in the world. The amount of venture capital investment per person – another indicator of entrepreneurship, is nearly thrice that of the US and more than thirty times that of the European Union.

Innovation that often comes with start ups, is the only proven way of economies to stay ahead and provide for the increasing demands of not only a growing population but of rising demands that come with a higher standard of living.

This boom in entrepreneurial activity flies in the face of the perception of Israel, as not only being at the heart of an unstable region but that Israel’s very existence is not assured by its belligerent neighbours. A complicated subject.

The roots of this national spirit of entrepreneurship and innovation, authors Dan Senor and Saul Singer find in some rather unlikely places.

The fact that Israel – like the US, is a nation of immigrants who by definition are risk takers is key and has some useful lessons for immigration policy makers.

When added to the crucial role played the Israel Defence Forces (IDF) in fostering an informal approach to authority, a unique attitude to failure and serves as a demanding culling selection process of the country’s best talent, the country has come as close as one can get to formalizing the process of entrepreneurship.

The development of the military and avionics industry – an unintended consequence of an arms embargo, nurtured a cadre of high tech engineers and laid the foundation for the huge concentration of the high tech industries in Israel today.

A booming venture capital industry, initially promoted by the government, means local entrepreneurs have access not only to funds but to the mentorship needed to grow business and make them competitive on the international scene.

Everything was not planned at the inception of the Jewish state by wise man Ben Guiron, but forced into a corner by real existential questions, Israel like few other countries in the world has literary taken the lemon of its circumstance and turned it into lemon juice.

Which makes me wonder, what would have happened if the early Zionists had taken up Britain’s offer to settling in Karamoja?

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