A common question floated on the subject of risk is whether a culture or country has more of a risk propensity than another. I’ve touched on these cultural attitudes in previous posts: American – ‘Failuremag.com’, Japanese – ‘Harmony and Humility’. Now, I’ve come across another examination into this area in a post coincidentally enough called ‘Embracing Failure’ and written by a ‘Bruce’. In this instance, he looks at the cultural attitudes to risk and failure in the country of Israel. His piece is based on a book “Start-Up Nation: The Story of Israel’s Economic Miracle” by Dan Senor and Saul Singer. What is intriguing is not just the geographic and cultural characteristics (Israel) that seem to have an impact, but also those of the a particular prevalent industry (military).
“Israel’s ability to launch a large number of innovative high tech businesses is staggering given its small size. The authors point out that recently Israel’s share of the global venture capital market was around 31%, more than all of the United Kingdom, Germany, and France together. Moreover, after the United States, Israel has more companies listed on the NASDAQ stock exchange than any other country, including all of Europe combined.
“The explanations are varied, including compulsory participation in the Israeli army, which provides young people with intensive, competitive training and the responsibility to solve problems in a sometimes hostile environment. One factor, however, seems just as applicable on the personal level as it does on the national level. Senor and Singer claim that Israelis have a cultural tolerance for “constructive” or ‘intelligent’ failures. In the military, ‘there is a tendency to treat all performance – both successful and unsuccessful – in training and simulations, and sometimes even in battle, as value-neutral. So long as the risk was taken intelligently, and not recklessly, there is something to be learned.’ This translates into the business world as well, where “most local investors believe that without tolerating a large number of failures, it is impossible to achieve true innovation.”