Tel Aviv: The heart of Start-up Nation

There’s a fight taking place among some European capitals to be the primes inter pares of tech hubs. London, Berlin, Paris, Dublin are all trying to claim the throne. But there is already an occupant, and it is unlikely that any of the pretenders are going to dislodge it: Tel Aviv. Israel is the start-up nation, and Tel Aviv is its hub. Ron Huldai, the mayor for the last 13 years, has seen the city transformed; in 1998 it was nearly bankrupt, now it has a triple-A credit rating from Standard & Poor’s. Mr. Huldai is an unlikely champion. He’s a retired air force brigadier-general with 26 years of service and a former headteacher of the Herzliya Hebrew Gymnasium, the school that was responsible for the rebirth of Hebrew.

‘I Did Not Create Beaches in Tel Aviv’

When you try to push Mr. Huldai on what he did to make Tel Aviv a center of entrepreneurialism, it’s a bit like pushing string. “I didn’t do anything,” he says. What advice would he give to other cities, such as London or Berlin? “I can’t give them advice. I don’t think I did anything by myself. I did not create the beaches in Tel Aviv.” When pushed harder, he can think of just two initiatives: public Wi-Fi in the city’s open spaces, and providing a library and center for start-ups to meet and have coffee. Just as you are beginning to think this is all a waste of time, he explains his strategy. It is nothing to do with high-speed Internet or venture capital or any of the mechanics of running a business. His strategy is about the people, not the organizations.

“We are creating a good place for hi-tech people to live in — I am doing it for the people working in hi-tech,” he said. There is a parallel with the positive steps he has taken to make Tel Aviv a gay-friendly city. After his election, he successfully embarked on a policy supporting the LGBT community. The city was recently named the world’s best gay city‎. “It is about building an environment that is supportive,” he said.

The Field of Dreams Model

One of his first objectives was trying to renovate the main street, Rothschild Boulevard. It was rundown and dirty, and the banks were threatening to move out. It was a key move. The street is now a bustling, active thoroughfare with numerous stalls. Young people like to hang out there.

“Tel Aviv had become a city that people used, not a city they lived in,” he said. Mr. Huldai’s strategy is the “Field of Dreams” model — if you build it, they will come. Make the city a place where the sort of people who run start-ups will want to be. Most digital media entrepreneurs are young, countercultural and attracted to cities that are vibrant, diverse and international. As he proudly said in his presentation, one-third of the city is under the age of 35, and there is one bar for every 200 residents.

That Israel is a start-up heavyweight is without doubt. A recent report commissioned by the city identified 600 start-ups in Tel Aviv/Yafo. Mr. Huldai’s vision is to attract more foreign investment, and more international students and workers. He is pressuring the government to change visa requirements. There are significant obstacles. The city’s own report, commissioned to look into furthering the city’s tech ambitions, highlights the size of the local market and talent pool, the high cost of living, language, increasing competition, bureaucracy and location as obstacles.

But, says Mr. Huldai, “The main issue is the perception of the situation and the perception of the state of Israel.” And this is getting worse, not better. “The whole attitude of the people around the world to Israel is different to what it was 30 years ago,” he said.

Source Wall Street Journal