The high-tech start-up companies at the core of Israel’s knowledge economy trace their roots back to the country’s unusual history. Israel is the product of a conscious historical process aimed at creating a state, an ideology and institutions through the Zionist movement, making it in effect a start-up enterprise wrought large. Israel’s knowledge economy was also helped by an early emphasis on education, the contribution of well-educated immigrants to the labor pool and the need to develop a domestic defense industry focused on electronics. The peace process that began in the early 1990s ensured greater political stability and enabled Israel to redirect its scientific resources to civilian applications. Finally, global telecommunications deregulation opened up new market opportunities for Israeli start-ups.