Israel has become famous as a start up nation. Just today, it was announced that Warren Buffet had made yet another purchase of Israeli high-tech, Ray-Q, which develops electrical solutions for military industries. The company is located in a modern industrial hub, near the country’s main airport.

Now travel a few hundred miles north, right to the edge of the Israel-Lebanon border, a region which mainly hits the headlines as Hizbollah and the Israel Defense Forces stand off from each other. There we can find Kibbutz Sasa. It’s all very picturesque, and the residents run some excellent local hospitality.

However, if you thought that the ideology and economic set up of the kibbutz movement went belly-up in the 1980s, it is time to think again.  Scratch the surface of Sasa and you find the hidden element of Israel’s success in commerce. It owns, totally or in partnership, several key factories.

Start with Plasson, whose sales of protective armour secure vehicles of the American and other armies around the world. Annual revenues come close to a billion dollars with the net profit level at a remarkable 25%. Sasatech employs hundreds of people, as it manufacturers a wide range of cleaning and packaging materials for domestic and industrial usage. We can add to the list a large ice cream factory, a leading diary farm and much more.

This week, the kibbutz invested in 20% of a milk cooperative, whose annual sales are calculated at around 85 million shekels, about US$30m. The intention is to create a line of high-end, quality cheese and yogurt products. Not bad results for a collective, stuck nearly 1,000 meter high amongst windy hills, and which has found itself in the middle of a war zone for much of its 65 year history.

And the punchline? Like much else in Israel’s economy, the kibbutz has learnt to survive and thrive despite the country’s on-going geopolitical nightmare. Maybe that helps to explain why the country continues to reach 3-4% annual growth, while much of the rest of the OECD is struggling.