Israel's economy

This strikes me as a leading factor behind Israel's prosperity:

Throughout the 1980s and the 1990s there were additional liberalization measures: in monetary policy, in domestic capital markets, and in various instruments of governmental interference in economic activity. The role of government in the economy was considerably decreased.

...Beginning in 2003, the Ministry of Finance embarked upon a major effort to decrease welfare payments, induce greater participation in the labor force, privatize enterprises still owned by government, and reduce both the relative size of the government deficit and the government sector itself. These activities are the result of an ideological acceptance by the present policy makers of the concept that a truly free market economy is needed to fit into and compete in the modern world of globalization.

It's also worth nothing that Israel has free trade agreements in place with European Union, the United States, the European Free Trade Association, Turkey, Mexico, Canada, Jordan, Egypt, and in December 2007, became the first non-Latin American country to sign a free trade agreement with the Mercosur trade bloc.

During the 1990s Israel accepted over one million immigrants into the country, which is simply huge for a country that began the decade with a population of just under 5 million.

The country is home to a high-tech industry cluster knows as Silicon Wadi.