Beginning in the 1990s, the Jewish state began producing small, innovative companies in the high-tech sector—many of which became wildly successful—earning the title, coined by Saul Singer and Dan Senor, of the “start-up nation.” But the new challenge facing the country, in the view of many economists, is allowing these small players to grow into big ones. Simon Griver argues that, even as the creation of new businesses has slowed, this process is already underway:

In 2018, . . . five Israeli tech companies completed financing rounds of more than $100 million and an additional thirteen companies raised more than $50 million. In 2019, seventeen Israeli tech companies completed financing rounds of more than $100 million and an additional fifteen companies completed financing rounds of more than $50 million. In 2020 so far, despite the COVID-19 crisis, seventeen companies have completed financing rounds of more than $100 million and eighteen companies have completed financing rounds of more than $50 million.

Most of the companies raising more than $100 million in a financing round have hundreds of employees and offices around the world and it is probably no longer appropriate to call them start-ups. . . . So it’s looking like the start-up nation is developing into scale-up nation. [Meanwhile], the number of start-ups in recent years has been decreasing. According to Israel’s Central Bureau of Statistics there were 4,363 early-stage start-ups in Israel in 2018, down 6 percent from 2017, and the number has since probably declined.

That is still a very large number and the Central Bureau of Statistics speculates that it might well be that the fall in [the number of] early-stage start-ups is actually a very positive thing. The Israeli ecosystem has matured since the early 1990s and the hit-and-miss nature of venture capital back then has been replaced by a more seasoned judgment by investors of whether an enterprise is likely to succeed. So only the fittest start-ups are likely to find the investment to get them up and running.

On Tuesday, a Hizballah drone attack injured three people in northern Israel. The next day, another attack, targeting an IDF base, injured eighteen people, six of them seriously, in Arab al-Amshe, also in the north. This second attack involved the simultaneous use of drones carrying explosives and guided antitank missiles. In both cases, the defensive systems that performed so successfully last weekend failed to stop the drones and missiles. Ron Ben-Yishai has a straightforward explanation as to why: the Lebanon-backed terrorist group is getting better at evading Israel defenses. He explains the three basis systems used to pilot these unmanned aircraft, and their practical effects:

These systems allow drones to act similarly to fighter jets, using “dead zones”—areas not visible to radar or other optical detection—to approach targets. They fly low initially, then ascend just before crashing and detonating on the target. The terrain of southern Lebanon is particularly conducive to such attacks.

But this requires skills that the terror group has honed over months of fighting against Israel. The latest attacks involved a large drone capable of carrying over 50 kg (110 lbs.) of explosives. The terrorists have likely analyzed Israel’s alert and interception systems, recognizing that shooting down their drones requires early detection to allow sufficient time for launching interceptors.

The IDF tries to detect any incoming drones on its radar, as it had done prior to the war. Despite Hizballah’s learning curve, the IDF’s technological edge offers an advantage. However, the military must recognize that any measure it takes is quickly observed and analyzed, and even the most effective defenses can be incomplete. The terrain near the Lebanon-Israel border continues to pose a challenge, necessitating technological solutions and significant financial investment.