The engine for Israel’s competitive advantage and growth is not technology, it is creativity. So says Mr Margalit founder and chairman of Jeruzalem Venture Partner.

If you think about it, Israels technology sector cannot rely on its own market (the army) nor on its neighboring countries and markets for its growth. Companies have to be global by design. Some say that Israel’s success depends on a well funded scene of hyper smart elite entrepreneurs that can rely on a broad well educated mass of workers. To continue its growth Israel’s technology sector and entrepreneurial scene had to solve two problems; First, it had to become less dependent on ties with the army and; second, it had to transform its technology focus from clever technology to customer focussed innovation that moves global consumers.

Going forward, in the current economic climate, Israel must also be able to deal with less foreign funding for their entrepreneurial scene.

What is most interesting is that Israel’s entrepreneurial scene shows the power of FDI coming from leading global corporations buying startup companies. A lot of major Cities are focused on developing intellectual capital and talent but they lack focus on funding that was so instrumental to Israel’s technology success.

What do think are great examples of Cities that have balanced talent supply, technology transfer and venture funding?

To read more about this topic, please visit the article Israel: Invention tension, by Tobias Buck, published in Ft.com.