This year’s Independence Day in Israel coincides with the “anniversary” of Herr Hitler’s birthday.

An irony, perhaps. Where as the failed Austrian painter talked of a Reich lasting for a thousand years, Israel’s Third Republic, despite a constant and continuing existential threat, is in its seventh decade. I will let others evaluate all the reasons for the country’s success, but one of them is the economy.

In the summer of 1986, Israel abandoned the mechanisms of protectionism that had served the country so well during its first traumatic years. It is often forgotten that when Israel was forced in to the Six day War of 1967, it did so emerging from one its deepest recessions.

Leap forward to 2010, and we have an economy based on innovation. The country’s hightech sector is at the forefront of the global cleantech revolution. Many analysts argue that the world is in the middle of a new industrial revolution in communications. Maybe, and at any telecom conference, you will find dozens of Israeli companies.

This push towards new social wealth is not limited to the sciences. I am working with a start up which has developed a prototype to replace printed cheque books. And come Christmas December 2010, you will see Israeli chocs on sale in Wal-Mart. 

Israel’s economic fundamentals are sound. Adjusted figures show that the economy grew at an annual rate of 4.8% in the last quarter of 2009, which only India and China could beat.

Israel’s population stands at just under 7.6 milion people. Roughly 25% are not Jewish. Despite the real threats of Hamas, Hizbollah et al, the continuing need to incorporate all – new immigrants, minority sectors, hundreds of refugees from Sudan, etc – is a need that works in parallel with the theme of innovation.

Yes, Israel is often criticised by others for not doing enough to help with integration. There is justice in some of those comments, although I have yet to find a perfect county that can preach without fear of being accused of hypocrisy. In parallel, I can proudly say that the importance of integrating all is a strong feature throughout much of society.

Look closely and you will see how innovation feeds off this ability to use the talents of all. The enemies of the people of Israel – from Pharoah to Hitler and on to the present rulers of Iran – have repeatedly tried to eliminate such freedoms and failed. Here’s to the next 62 years, and many more after that.