Israel has seen great success in its tech industry development in recent years.
In 2014, 12 Israeli companies listed on NASDAQ, three of which had a market value above US$1 billion, with Mobileye being the largest and best known.
The iconic Israeli tech innovator designs and develops technologies for driver assistance systems and its market value is close to US$9 billion.
The country, which has about the same population as Hong Kong, shocked the market in the 1990s when tech firm ICQ was acquired by America’s AOL for US$287 million, putting Israel on the global map of new technology.
ICQ went on to become an important source of inspiration and encouragement for Israel youth, Dr. Dominic Chan, honorary project director of the Center for Entrepreneurship at the Chinese University of Hong Kong, writes in the Hong Kong Economic Journal.
Startup entrepreneurs in general believe if ICQ, of which the founder and its team share similar background, can make the achievement, there is no reason they cannot pursue their own dreams.
Over the past two decades following the success of ICQ, Israel has nurtured many mature startup owners who have ample experience in creating a new business.
Many are veterans in a certain field and know very well the problems that need to be solved. Some have set up more than one new company.
They are relatively mature and know how to work with investors.
If there is a key difference between Hong Kong and Israel, our lack of star companies like ICQ and a less developed startup ecosystem would be it.
Numerous Israel tech firms have spent a long time on research and development and have accumulated a deep understanding of specific technologies which cannot be easily emulated and serve as a strong entry barrier.
Such a “moat” is often crucial in fending off new rivals and raises the chance of survival of a startup, Chan says.
Hong Kong startups have varying degrees of success, but in general, they don’t have proprietary technology and are usually matching platforms serving different markets such as the job market, the tutoring market or the property rental market.
Like Hong Kong, Israel is a small market with only seven million people. Israel startups realize the limit of the domestic market and usually set their sights on the global market.
But Hong Kong startups are more geared toward the local market.
It has taken Israel two decades to get to where it is now.
Hong Kong will need more time to build up its own tech industry. Chan says we should learn from Israel’s success and see how and where we can improve.
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