Amir Cohen / REUTERS

How Israeli Conscription Drives Innovation

Could Similar Policies Benefit Europe?

Ofer Familier, a 35-year-old Israeli, works as business development director of Vayyar Imaging, a successful start-up that makes radar-based imaging sensors for breast cancer. At first glance, this work seems to stand apart from his former duties in the Israeli air force intelligence corps, where he completed his three-year mandatory military service. But in a larger sense, Familier’s stint in the military has been crucial to his entrepreneurship—as it has for that of many others. Two years ago, Nadav Zafrir, the head of the Israel Defense Forces’ signals intelligence department, left to launch a start-up tracking cybercrime. It swiftly raised $18 million in venture capital funding. There are hundreds more stories like theirs.

The IDF’s conscription system has brought great benefits to Israel’s economy. The armed forces meticulously place talented conscripts in technological, combat, and intelligence units. The skills that the conscripts acquire are a significant benefit to them in the civilian labor market after they leave. As Familier told me, “Technical intelligence units in the IDF are like Harvard. You form networks and end up doing business together.” And, he added, “as an 18-year-old conscript in the IDF, you’re given a lot of responsibility about life-and-death decisions, you make command and management decisions, you decide whether to continue an operation.”

The country’s booming high-tech sector, which yielded most of the country’s 1,500 new start-ups in 2015 and accounts for 40 percent of its exports, is to a large extent powered by former conscripts from such elite units: although only 20 percent of young Israelis are selected for technological and combat units, 60 percent of high-tech workers have served there. Eran Yashiv, a Tel Aviv University economics professor who also heads the economics and national security program at the Institute for National Security Studies in Tel Aviv, has for years monitored the economic effects of the draft. “Conscription is human capital formation,” he told me. “The private sector benefits from the training the armed forces provide.” The Chief Economist Department

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