[tinyhouse]

One possibility is that in rich countries with less corruption where people can have high-paying jobs that are not stressful and can still have plenty of personal time, the incentive of looking for alternatives (like starting you own business) is not that high. Another way to put it is that in Israel it's more of a survival culture and many people see entrepreneurship as a path out. There are many countries similar to Israel that are less innovative; this can be explained by the fact that Israel is still an advanced country with good universities and military that always needs to improve.

On the other hand, entrepreneurs are usually independent people who really value freedom and don't like to work for others. Regardless if they can find a good job or not. So I'm not sure if my first theory holds. Maybe Israelis are just more independent then the average European (which can be explained by the culture and environment too).