A big part of its success was the collapse of USSR. So luck and ability to self-reflect and realize on their fortunes and execute on that lucky break... In the 90's they had a population of 4mil and something 300k Soviet immigrants were arriving every year. A large proportion of them was highly educated people. And those people who sent rockets to space were cleaning the streets... So what they did right was just take money from US grants and give that money to everyone who wanted to build something and asked for it. They have built these huge warehouses/offices called "hothouses" on the outskirts of cities, put the unemployed scientists there, gave them some money and said build something.

Yes, I think a lot of thier curreny success comes from "exchange" with larger countries and a natural incentive to develop e.g. military technology. I guess it is similar to places like Taiwan.

If you removed all the US companies, restricted immigration and didn't allow people to go abroad to study it isn't clear how well they would do. From what I hear it is no dream to be young in Israel today. Also there seems to be a surprising amount of shady things coming out of Israel. Anything from spam and exploits to binary options and outright fraud. Which would suggest that people don't have better opportunities.

Wow I had no clue about this. Any interesting books/articles that you can recommend on this topic?

I think this book https://en.wikipedia.org/wiki/Start-up_Nation mentions it, but I don't know any source that writes in details about it. All from my memory of seeing relatives and friends that worked for Soviet research institutes --> sweeping streets in the desert sun at +40 Celsius ---> working on interesting hardware/software projects. It's amazing how people can thrive and pull out of the lows if you give them a hand. Completely the opposite happened to people in Russia, these research institutes were shut down and people just succumbed to alcoholism. Decades of knowledge were lost or just transferred to the US defense industry.

I really enjoyed reading "Start-up Nation" by Dan Senor and Saul Singer. Some clues, and lots of inspiration there.

But why does this happen in Israel? They don't benefit from the huge capital flows and single market of the US

I could be wrong but from what I read a while ago it's that there's not much traditional resources to export (Farming, Mining,..) and instead there's a focus on R&D and exporting technology. There's probably also a very high amount of R&D in the military sector that's subsidies as they have a very high export rate there (Elbit, Rafael,...).

> there's a focus on R&D and exporting technology

Mandatory military service produces a disciplined and well-networked population. Israel also benefits from sensible commercial law and relatively efficient courts, two things India grossly lacks.

Zionism

When a B is considered a poor grade by your mother and you are simply expected to be on top of your class, it does wonders. Genetics probably play a roll too, but that discussion is not allowed here.

Not Jewish culture, but Jewish genetics.