Paul Graham, in his How to Be Silicon Valley essay (also discussed in Slashdot), mentions that a Silicon Valley requires that two types of people – nerds and rich people – live in the same city.
I noticed lack of mention of the Israeli experience in the discussions following the essay. The Israeli experience appears to confirm Graham’s thesis. The relevant areas in Israel (Jerusalem, Gush Dan and Haifa) are separated from each other by at most 1-2 hour long driving. They have several academic institutions, which have strong computer science and biotech departments (Weizmann Institute of Science, Technion, Hebrew University, Tel Aviv University, and more). There is another factor – military service in Hi Tech units of the army, which allows teams of people, who trust each other, to form. After end of their army service, those teams go on and build startups.
Israelis are also born entrepreneurs and risk takers. People who “made it” support new startups, like in the Silicon Valley.
Several years ago, this was not the situation in Israel. But several Israelis left for the Silicon Valley, and some of them were successful there. Some of the successful ones brought back to Israel their experience. Some culture was transferred also by Silicon Valley companies, which opened R&D centers in Israel (for example, Intel). Over time, attitudes and policies were adjusted to make the Israeli version of Silicon Valley possible.
Another country, which was successful in attracting High Technology, is Ireland. It was not discussed either, and I do not know how much cultural adaptation they made to the demands of Hi Tech startups.
