Despite its small size, Israel lists 93 companies on the Nasdaq — more than India, Japan and South Korea combined. In 2016 investors sank $US6 billion ($7.7bn) into Israel’s more than 6000 start-ups. Google, IBM, Apple and Intel all have research-and-development centres located there.

Many people look to the Israeli education system to explain this success. During my two years as Minister of Education I have come to understand that although Israel’s schools are good, our secret weapon is a parallel education system that operates alongside the formal one. This is where our children learn to become entrepreneurs.

Israel’s shadow education system has three components. The first is our heritage of debate — it’s in the Jewish DNA. For generations Jews have studied the Talmud, our legal codex, in a way vastly different from what goes on in a standard classroom. Instead of listening to a lecture, the meaning of complex texts is debated by students in hevruta — pairs — with a teacher offering occasional guidance.

Unlike quiet Western libraries, the Jewish beit midrash — house of study — is a buzzing beehive of learning. Since the Talmud is one of the most complex legal codes ever gathered, the idea of a verdict is almost irrelevant to those studying. Students engage in debate for the sake of debate. They analyse issues from all directions, finding different solutions. Multiple answers to a single question are common. Like the Talmud itself — which isn’t the written law but a gathering of protocols — the learning process, not the result, is valued.

The second component of our shadow education system is the peer-teaches-peer model of Jewish youth organisations, membership-based groups that we call “movements”. Teenagers work closely with younger children; they lead groups on excursions and hikes, develop informal curricula, and are responsible for those in their care. As an 11th-grade student, I took fifth-graders on an overnight hike in the mountains. Being given responsibilities at a young age helped shape me into who I am today.

The third component is the army. Because we are constantly defending ourselves from Islamic terror, 18-year-old boys and girls are drafted into the military for stints of two or three years. Young Israeli adults must literally make life-or-death decisions every day.

As a 23-year-old officer in 1995, I led 70 soldiers behind enemy lines. The covert mission required me to prepare my troops, mobilise people and equipment, build contingency plans, and function under immense physical and mental pressure. These situations teach a person how to execute plans — or adapt and improvise.

Consider a hypothetical 19-year-old soldier in the intelligence corps, analysing aerial photographs or intercepted communications. She must decide if the material in front of her indicates an impending attack or not. This isn’t a rare occurrence. Thousands of Israeli soldiers experience it daily.

Good teachers in vibrant classrooms are necessary for children — and nations — to succeed. Schools provide a base of literacy, mathematics and social interaction. But Israel’s extra-curricular system goes further. Peer-led debate and intellectual dialogue enhances learning. Actual responsibilities, like caring for younger children, nurture growth and maturity. Real-life tasks show young adults how much they are capable of achieving. These are the principles that anyone wishing to replicate Israel’s success should emulate.

Two qualities are needed to change the world: innovation, to think of new ideas, and entrepreneurship, to turn those ideas into reality. That is the essence of today’s economy. The way to create citizens steeped in the ethos of both is to give children, at a young age, the room to try.