New Book Tells Secrets of Israel's Success and Importance of Taiwan-Israel Ties

A good book not only provides deep insights derived from the author's observation of his subject, but also inspires the vision of the readers, broadens their horizons, and possibly creates future opportunities for them. One example of such a "good book" that we saw recently is the Taiwanese edition of the Start-up Nation - The Story of Israel's Economic Miracle, a long-time New York Times, Washington Post, and Wall Street Journal bestseller.

The publication of the Chinese version is timely, because interaction between Israel and Taiwan has been steadily increasing. Relations between the two small, high-tech-oriented nations have proven highly successful, and two-way trade reached US$1.2 billion in 2008.

The book is difficult to categorize. It is about business, of course, but it also has a strong cultural content. It goes a long way toward explaining Israel's outstanding achievements in the area of start-ups, but also provides a clear description of Israel's history and its spirit of struggle for survival.

The book was launched in Taiwan recently by the Israel Economic and Cultural Office (ISECO) in Taipei and Ecus Publishing House (a member of the Sino Group). Among the VIPs who spoke at the launching were Raphael Gamzou, Israeli Representative in Taiwan; Chang Jin-fu, minister without portfolio and deputy convener of the Executive Yuan's Scientific and Technology Advisory Group; John Kuo, chairman of the Sino Group; and David Chang, vice president of Idesia Biometrics.

The Book

Publishers Weekly Online, an international news book publishing and marketing website, provides this description of the book: "With the highest number of startups per capita of any nation in the world and massive venture capital investment, Israel is one of the world's entrepreneurship hubs. (Dan) Senor, senior fellow at the Council on Foreign Relations, and (Saul) Singer track Israel's economic prowess using a number of factors, including the social networks and leadership training provided by Israel's mandatory military and reserve service, a culture of critique fostered by centuries of Jewish tradition and an open immigration policy for Jews that continually restocks Israel's population with motivated people from around the world-all of which foster a business climate in which risk is embraced and good ideas are given a chance to grow."

Some excerpts from other reviews:

"There is a great deal for America to learn from the very impressive Israeli entrepreneurial model... Start-up Nation is a playbook for every CEO who wants to develop the next generation of corporate leaders." (Tom Brokaw, special correspondent for NBC News and bestselling author of The Greatest Generation)

"In the midst of the chaos of the Middle East, there's a remarkable story of innovation. Start-up Nation is filled with inspiring insights into what's behind Israel's dynamic economy....a timely book and a much-needed celebration of the entrepreneurial spirit." (Meg Whitman, former CEO of eBay and Republican nominee for governor of California)

"No one else, in my judgment, has written regularly about Israel in recent years with more clarity than Singer." (William Kristol, editor of The Weekly Standard)

"An edifying, cogent report." (Kirkus)

The Book's Importance

During his talk, Gamzou used a Bible story about Abraham, the father of the Jews, bargaining with God to illustrate how the Jewish people dare to challenge, negotiate, and debate.

"I can say the most interesting thing about Israelis is the culture," Gamzou continued, quoting a friend. "Israelis are not so disciplined. From the age of zero, Israelis are educated to challenge, ask questions, debate everything. For summing up, I would say in our culture we have the liberty, and we encourage our next generation to pose questions, to take challenges, and not to take everything for granted. So under such a culture, it's easy to have innovative ideas. And that maybe answers the question of why the volume of start-ups in Israel per capita is so high."

Joanna Lei, founder of Hope Agent Corps and Professor at Fu-Jen Catholic University, said that the book provides much new thinking for Taiwan. For example, she said, to join the army provides numerous training opportunities for young people and helps the younger generation to develop various kinds of personal links with army comrades from all social and economic levels. That is a good lesson for the Taiwan government, she said, which plans to switch from conscripting soldiers to taking volunteers.

Ophir Gore, director of economic affairs of ISECO, said that there are some major similarities between Israel and Taiwan, such as a small area, lack of natural resources, high pressures from surrounding nations, and lack of acceptance of its sovereignty by other nations.

If they tied up, Gore said, Taiwan and Israel could achieve a win-win and complementary status, because Taiwan is internationally known for its strong technical processing, manufacturing, and product commercialization capabilities, while Israel has very strong capability in basic science and new-technology R&D. The partnership between the two nations is becoming more and more important, he noted. For Taiwan, he added, the global information technology (IT) market has entered into a mature stage with little space for high margins in manufacturing, while banks in Taiwan have plenty of money but no nowhere to go for suitable investment targets.

Gore suggested, especially, partnerships between Taiwan and Israel in the fields of biotechnology, pharmaceuticals, and high-tech medical equipment.

Forming Partnerships

David Chang, vice president of Idesia, which helps his company and others in Israel and Taiwan to form start-ups, find technological partners, and seek manufacturing and marketing partners, said that over the past 10 years he has successfully mediated six partnerships between the two nations and has other cases ongoing. "In general, the results are very fruitful and constructive," stressed.

In answering a question from the press, Chang said his experience has been that in most past cases, Israeli companies have sold their high-technologies or technical products, such as software and electronic parts, to Taiwan. Taiwan has acted as an integrator, he noted, adopting these imported technologies and components for making finished products and marketing them globally. In short, he said, Israel has played the role of a supplier to Taiwan.

In recent years, however, the situation has changed due mainly to the booming development of Taiwan's semiconductor industry, which has turned the island into a supplier, providing IC-making and packaging services to Israel. But in many cases, the ICs that Taiwan ships to Israeli companies are sold to local IT firms that use them to make and market finished products.

Chang thinks that in the future the partnership between Israel and Taiwan will turn toward technology licensing. "In the modern 3C (computers, communications, and consumer electronics) and IT industries," he added, "no company can develop all the new technologies, so they have to rely on partners." He expects Israeli companies to license more new technologies to Taiwanese partners.

Investment shows another trend. Taiwan has money, and some of its big state-run funds have invested in venture-capital funds in Israel. One of these is the National Development Fund, which has invested in Israel through Giza Venture there because it does not understand conditions in Israel. "Why don't Taiwanese companies directly invest in Israel instead of indirectly through the national fund?" Chang asked. "Local companies should know their needs best, and go directly to Israel to find suitable partners. I think that's the Taiwanese companies' next step for making themselves more internationalized."