israel constitutes a case in point the socalled startup nation has a relatively small yet highly dynamic hightech sector which is the major driver of growth in the country while the rest of the economy consists of traditional industries and service sectors characterised by low productivity and low wages this dual economic structure has increased the levels of inequality and social unrest in the country lemarchand leek and tash highskilled workers in more productive firms progressively gain higher wages and benefit from regular onthejob training and from constant interaction with other highly skilled individuals ultimately increasing their innovation capacities in turn those working in less productive firms even with similar capacities see their wages stagnate or decline over time have fewer training opportunities and progressively have more difficulties move to highly productive jobs