ABSTRACT
How did Israel become a “Start-Up Nation” – the Silicon Valley of the Middle East? In this chapter we argue that, in contrast to existing narratives, the rise of Israel’s high-tech sector was the result of a state-led project that dates to the 1970s and originated within the context of Israel’s corporatist economy. Building on emerging scholarship on the topic as well as our own work, we highlight how a myriad of policies and reforms – an innovation policy – introduced in this period proved crucial to the development and eventual success of the Israel’s technological sector. Far from simply a top-down project imposed by the state, this was the outcome of a corporatist-like arrangement in which Israeli state elites coordinated policies with representatives of both the private and labor-owned (Histadrut) industrial sectors. Finally, we show how the sector’s development and evolving embeddedness within global “technocapitalism” has transformed the very political-economic regime that previously supported its early success. Specifically, we consider technocapitalism’s role in changing labor relations, undermining unionized employment and advancing the professionalism of HR management. We also highlight how this process increased income inequality, while at the same time contributing to the growing labor market integration of individuals from marginalized social groups.
