Another factor in Israeli success must have been immigration. It's the last of the settler "frontier" states, and it has an open door immigration policy for people of Jewish ancestry.
I definitely believe this makes an impact. From a biased American perspective, if I was a non-Israeli Jew living in a country that was outside of the US, Canada or Western Europe, and I am young and seeking more opportunity, moving to Israel would look like a very attractive option. Israel is very happy to woo young, and educated minds to their country which brings in fresh perspectives, which I would assume is great for startups, especially he many that target global markets.