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Sunday, September 23, 2012

Israel - Extremely Low Startup Failure Rate Reported

As many of you know, the start-up scene in Israel is especially vibrant - for example, although it is one of the smaller countries worldwide, Israel is #3 on the NASDAQ after the US and China...

It should therefore come as no surprise that the failure rate for start-ups in Israel is extremely low. The Israeli Central Bureau of Statistics released data on 2,047 companies operating in the realm of research and development between 2003 and 2008. The data set included companies in the following market spaces: semi-conductors, biotech, medical devices, communications, clean tech and electronic components.

Of the 2,047 companies analyzed, 1,746 (85%) were categorized as start-ups; of these fully 1,222 started up during the term examined. Five years later, 488 of 547 companies that had ceased to exist were startups. Of the 1,222 companies started up from 2003 to 2008, only 35% had failed!

As a comparison:
  • In Britain 33% of new businesses fail during the first three years.
  • In the US fully 55% of new businesses are out of business by the end of their fifth year of life

    For more on the success of the Israeli start-up community I highly recommed Start-up Nation: The Story of Israel's Economic Miracle