I actually “borrowed” the title from an interesting article in the Journal of Economic Psychology’s January edition. Not a journal that I usually read, but my interest was triggered by a post in Marc Andressen’s blog. When I first saw the article (especially the introduction) that explained that “The strongest cross-national covariate of an individual’s entrepreneurial propensity is shown to be whether the person believes herself to have the sufficient skills, knowledge and ability to start a business. In addition, we find a significant negative correlation between this reported level of entrepreneurial confidence and the approximate survival chances of nascent entrepreneurs across countries.”

So I thought to myself “aha – I finally understand why there are so many high-tech entrepreneurs in Israel” – the national trait of over-confidence is actually causing the Israeli propensity to create startups. This actually fit pretty well with the findings that I mentioned in an earlier post on Age and the Israeli Entrepreneur. Then I looked a bit closer at the numbers in the article.

Turns out the article is about new business in general, not just high-tech, and Israel has an relatively low percentage of entrepreneurs that perceive that they have sufficient skills, knowledge and ability to start a business (only 30% of respondents, as opposed to 61% in NZ, 55% in the US – but only 11% in Japan, Israel is in the bottom third of the countries mentioned). So clearly it isn’t a national trait, but one that seems more localized to the technology community. Given that, I think there may be a different trait involved rather than just self-confidence. Since the Israeli technology community is relatively small (and pretty close knit – many having served together in the Army) I think another factor mentioned in passing in the article may play a larger role in Israel’s technology startup phenomenon - “Knowing other entrepreneurs is also positively associated with start-up propensity.”

Stumble it!

This entry was posted on Wednesday, October 10th, 2007 at 8:40 am and is filed under Israel, VC, Venture Capital. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.