For the past few decades, there has been constant chatter that SMEs – small and medium sized enterprises – comprise over 90% of commercial activity in most of the world’s economies.

Thus, start ups are a theme for conversation amongst economic planners. The gurus, like Seth Godin, love to expound on why SMEs have it rough.  Obama, as with many a good politician, never misses of photo opp with a local business owner. etc etc.

For Israel, often called a ‘start up nation’, enterprise and entrepreneurship appear to be in the blood. To reel off some stats as published in the newspaper this weekend, in a country of just over 8 million people, there are about 493,000 registered businesses, of which about half are considered one-person operations. Less than 1% employ over 100 people.

If the average monthly wage is slightly under 10,000 nis – almost US$3,000 – the average wage in a business with less than five workers is about 60% of this figure. Yet in 2012, 15% of small businesses were looking to close down. This number dropped to 2% for operations with more than 20 workers.

Israel’s economy is unique, certainly within the OECD membership. It is a democracy, which has to devote an unusually large amount of resources to defense. Around once in five years, everything grounds to a halt for a month or so, as business owners join the reserve army units  in order to protect the country against invaders. And for all that, for every year but one since 2003, the country has produced annual GDP growth of no less than 3%.

And one of the reasons has been a concerted effort – frequently confused by bureaucrats and treasury cutbacks – to invest in schemes to help SMEs. Two classic examples: (A) The Office of the Chief Scientist has a spectacular budget to partner high tech start-ups. (B) A mentoring scheme is in operation through local innovation centres, which allows new services, shops, non-profits, etc to employ the skills of experts at subsidised rates.

The latest competition to promote SMEs was again supported by the country’s largest bank, Bank Hapoalim. The winner, who started out only in 2011, is a chess champion, who now employs 23 people to teach the game to children in a fun way. A lighting company, a chef who specializes in ‘finger food’ for functions, a tailoress of unique clothing for pregnant women were all strong runners-up.

It is difficult to find a common factor that links these entrepreneurs together. Many of them were driven by core will to succeed, usually in the face of adversity. And many had a business mentor of some kind supporting them. All in all, there are some lessons here for bureaucrats and meddling politicians around the globe.