The smaller the home market, the more globalized an economy must become

■"Punching above its weight," The Economist, 12 November 2005, p. 64.

The secret of Israel's success? Being so scared all the time means the government encourages a lot of specialization in security, so plenty of engineers to keep things safe. Israel leads the world in engineers per 10,000 employees (well over a hundred, with the U.S. next in the range of 70, then Japan).

But the real key is the smallness of the home market. Start-ups can't make it at home, so they become "mini-multinationals" at birth, typically targeting the U.S. market from the get-go.

Plus, Israel's society encourages the risk-taking necessary to become serial entrepreneurs.

If Steve DeAngelis has taught me anything, it's that running start-ups successfully is an amazingly complex skill set. You need a fast and furious society to let that happen. Conformity isn't the great social norm it might seem. Singapore might think it can technocratically engineer a biotechnology industry, but it'll probably end up loosening that collar and rolling up those sleeves some socially to make it happen.

And Israel's got that looseness down pat economically, despite the tightness on the security scene. That's why the one country with no energy reserves in the Middle East is actually its most globalized economy.