Under very adverse conditions, Israel has become one of the world’s leading knowledge economies. At a time when high technology, science, energy conservation, and medical research have become the hottest economic sector, these very things have emerged as the country’s leading industry. Thus Israel’s economy is uniquely based purely on technology and innovation. But the phenomenon has created two problems. The first is the sustainability of the model and the second is the social costs it has entailed in the form of income inequality and poverty. This book examines the rise of the country’s knowledge economy and its consequences using macroeconomic data, interviews with industry players, academic studies, and media reports.