The formula to get out of the crisis: the Israeli secret to turn Argentina into a power

The story of Israel as the “startup nation“is world famous with several specialists addressing the fact that such a small country with so few inhabitants manages to be one of the most important innovative centers in the world. This is reflected in the records of investments made in Israeli companies during 2021, when they amassed the record figure of $25 billionan amount that exceeds by almost US$10,000 million all that was raised by ventures in Latin America during the same year-.

And whenever these records are broken in the country of Middle East the question arises about how the entrepreneurial ecosystem works there and -even more importantly- What should be done to copy the model that brought so much success to a country with a surface smaller than the Tucumán provincethe smallest in all of Argentina, and with less population than the Autonomous City of Buenos Aires.

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As explained by several specialists, The reason lies in the coexistence of an educational policy that promotes innovation, strategies planned at the state level that seek to encourage entrepreneurship, the fact that the vast majority of the economically active population has completed military service, and the enormous diversity of cultures that surround it. live together in the country thanks to its immigration policies.

Education is a fundamental pillar in the current entrepreneurial ecosystem that exists in Israel“, explains the teacher Roee OzeriVice President of the Weizman Institute and Ph.D. in Physics from that institution. “Both in the Weizman Institute and in the rest of the country’s educational institutions, it is accepted that several of the developments are proposed with the objective of being able to carry out a business“, he adds. And this approach is practically the same for all academic establishments in the country. A clear example is the Master of Business Administration with a focus on entrepreneurship that offers the Tel-Aviv University.

Professor Roee Ozeri, Vice President of the Weizman Institute.

The ecosystem became a well-oiled machine with entrepreneurs at the center, and around a series of tools such as venture capital (VC) funds, multinational investors, angels, technology units of the companies. Israel Defense Forces (IDF), incubators and accelerators“, Explain Denes Bandirector of the VC our crowdwhile adding: “And the role of the VCs is really important, because they are the ones who take the entrepreneurs in Israel and connect them with all the tools that surround them to do the projects in the most professional way possible. From financing and establishing a competent board of directors to product development to have a profitable sales strategy, everything can be provided by VC funds“.

The case of OurCrowd clearly illustrates the Israeli philosophy: an investment firm that works as link between small investors and companies that have not yet achieved sufficient growth to seek capital in the public sector, but that demand more important financing. “If you analyze the last 10 years of the technology market, you see how companies give more and more returns for those who invested during private rounds compared to public investment rounds,” Ban analyzes and then adds: “This happens because companies are launched on the public market at a much more advanced stage of their development, so they have no room for growth after going public.“.

From this VC they sought to take advantage of this to connect technology companies with the endless number of small investors who did not have the ability to enter during the private rounds but who did want to obtain the returns that usually appear in these stages. “If a doctor wants to invest $100,000 in a technological breakthrough in the pharmaceutical industry that hasn’t hit the market, he can only do so through our VC.“, assures Ban and then adds: “We allow small certified capitals to invest in the most promising industries in Israel with a floor of US$10,000, through the crowdfunding method.“.


While Israel is the world leader in entrepreneurship and is the country with the highest number of unicorns per capita in the world, the reality is that Argentina is not far from establishing an effective system that promotes entrepreneurship through joint work between the State, entrepreneurs and investors. “In our country there is an entrepreneurial community where accelerators, incubators with university support, public and private institutions, research centers, NGOs and some government programs to support entrepreneurs interact,” he explains. Silvina TerroniDirector of the Pilar Austral Business Park. “There are many entrepreneurs who think big, with challenging ideas, who embark on this process and generate quality jobs.“, he adds.

And a real interaction is that of the Austral University with the Business Park. In 2006 the educational institution signed an agreement with the German group Taurus investment holding to carry out a real estate development that would focus on the creation of enterprises. “The main objective of the Park is to facilitate the meeting between the corporate and academic worlds, focused on the development of new projects and ideas, access to research centers and seed capital, attracting talent and generating new businesses.Terroni recounts.

Another example is the work being done from the National Agency for the Promotion of Research, Technological Development and Innovation (R+D+i Agency)institution that seeks to promote the development of ventures with scientific approaches that in many cases require high levels of investment before they can be launched on the market as commercial products. “We take care of developing science-based ventures that require a longer development time before going on sale in their respective markets.“, develop Fernando Peiranoagency president.

With this in mind, they promote entrepreneurship programs in different fields of hard sciences in more than 75 educational organizations. At the same time, they carry out joint work with accelerators from different provinces, some of which are based on the Israeli model of incubators for startups, or with provincial organizations such as the SF500 project promoted by the Santa Fe government..

Fernando Peirano, president of the I+D+i Agency.

The sectors that stand out the most at the entrepreneurial level in the country are biotechnology. Among them, the developments linked to agriculture, food and health stand out. To these areas is added the chemistry applied to industrial processes“, affirms Peirano and then explains how the trends of recent years point to investment flows being generated with a very detailed and capillary analysis that evaluates the ideas that have arisen in the country. “A complementary promotion system is being created for entrepreneurs“, sentence. For his part, Terroni maintains that there are two clear development verticals: “The technological vertical with entrepreneurs and companies that develop software and artificial intelligence for different sectors (health, entertainment, automotive industry, among others) and the second vertical is scientific, with projects and lines of research ranging from the cloning of polo horses , rapid detection test for Covid, to the innovation of processes in the health industry that improve the patient experience“.

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With all these data in mind, many wonder if it is possible for the Argentine ecosystem to grow at the rate necessary to be able to compare with the situation that Israel is experiencing today. “Argentines have the skills and attitudes necessary to carry out new projects, with resilience as a characteristic that we exercise daily and allows us to continue in the face of adverse situations.says Terroni and adds:Unfortunately, the lack of clear rules, a weak economic situation, high inflation, strong free trade regulationsAmong other difficulties, they result in insufficient local investment and little or no foreign investment that slows down the development of entrepreneurship in Argentina.“.

These problems that Terroni describes are in part the same ones that the State of Israel suffered at the time. The clearest example was seen with its inflationary levels between the 70s and 90s. In that time span, average annual inflation in Israel was 100 percent, peaking when it was recorded in 1984, with a price increase of 373which the following year dropped to 308 percent.

But, with the monetary reform of 1985 that introduced the new shekel and established a policy to lower inflation, it was seen how the country managed to overcome this problem and the inflation rate fell to an average of 14 percent per year in 15 years. Since the beginning of this century, the increase in prices ceased to be a concern for the country. This coincided with the start of growth in the technology sector that led it to become one of the centers of innovation worldwide.

As, Terroni proposes: “There should be more initiatives such as the Knowledge Economy Law to encourage entrepreneurs and businessmen to continue innovating and growing. It is key to create a framework that allows entrepreneurs to overcome all obstacles and thus manage to scale their companies“.

The case of Israel can be a mirror where the country looks at itself and recognizes that there is an opportunity to exploit high-quality human resourcesthat today are exported around the world.

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