At an age when many young adults are just entering the workforce in entry-level positions, Gidi Cohen was leading an elite software development unit charged with building information security solutions for the Israeli military.

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"I was 21, running significant budgets, with tons of projects under development and lots of people reporting to me," recalls Cohen, who served from 1987 to 1992 in the Israeli military's intelligence corps.

Having command over large projects at such a young age accelerated his technology and management experience, says Cohen, who co-founded analytic software maker Vigil Technologies in 1998, and security risk management vendor Skybox Security in 2002. The military atmosphere in Israel supports innovative and independent thinking - attributes you'd expect an entrepreneurial start-up to promote. "That gives you a very good jump-start later on," he says.

Cohen isn't alone in parlaying his military experience into a high-tech career. Israel is known worldwide as a breeding ground for entrepreneurs. With 69 Israeli companies listed on Nasdaq, it's second only to Canada in the number of foreign countries on the exchange. Among the country's more recognizable success stories are security vendor Check Point Software and VoIP pioneer VocalTec Communications.

In concentration of new technology companies, Israel most resembles Silicon Valley, says Adam Fisher, a general partner at Jerusalem Venture Partners, a venture capital firm established 12 years ago to help create and fund early-stage companies in Israel. Take any technology start-up in the U.S., and odds are that one of its competitors is an Israeli company, he says.

One reason is the independent nature and penchant for risk taking that characterize Israel's 6.5 million people. "They're not afraid to fail or to risk suffering to create a better life," Fisher says. "That willingness to prove themselves over and over again is what created the environment today."

Israelis have learned to create opportunities without dwelling on potentially bad outcomes, adds Philippe Szwarc, CEO of Arel Communications and Software, a videoconferencing platform vendor founded in Israel.