Chapter 2 Israel’s Knowledge-Intensive Sectors: Innovation, Networks and Regions

Israel, characterized by various knowledge-intensive entrepreneurial firms, provides an interesting case study for examining sector-based differences and “small country” regional patterns. This chapter has a dual goal of exploring sector and regional differences of knowledge-intensive firms in Israel. The first goal is to depict similarities and differences between firms in three knowledge-intensive sectors: Life Sciences, information technology, and Cleantech. The second goal questions whether the geographical distribution of these firms across regions is associated with different levels of knowledge concentration and organizational homogeneity. Regional and sector-based differences were measured by firm-level network structures, funding patterns, and innovation proxies. One way analysis of variance tests were conducted for attaining these research goals. The main findings show that while most regions exhibit similar patterns of firm and network characteristics, many differences exist on the sector level that are associated with sector-specific attributes. These findings support the notion of a “small country inter-regional homogeneity effect.”