David Lammy, the MP for Tottenham and widely considered to be a possible Labour contender in the next Mayoral elections, said although he did not expect the UK to mimic Israel's universal army conscription or influx of millions of immigrants, it could learn from the concept of a "start-up nation".
Lammy used an essay on the future of Israel Left for the Fabian Society to criticise the "short-termism" and quick-fix nature of British politics which meant politicians no longer took big risks or attempted big fixes.
"In Israel, there is an acceptance that the state can – when used in the right way – be the great enabler of growth and that you can ‘pick winners’ of sectors and succeed," Lammy said.
But he said such a scheme was stymied in Britain by the political culture.
"In Britain, our entire political culture is ensnared not only be short-termism but by the need for ministers to appear utterly convinced that their bill will solve absolutely every problem, fill every gap and answer every
"Can you imagine hearing this from the despatch box: 'We are not sure when this programme will break even, if at all. We are certain that many – in fact most – of these investments will fail and the money invested will be squandered. But I hope that in time – how long I don’t know – we will have created an environment where creativity and finance will be fused together, each spurring the other in a virtuous cycle of innovation and investment. Only then will we thrust Britain to forefront of the global economy and create jobs and prosperity for decades to come'."
The challenge was to create a UK-specific model for this kind of fund, Lammy said. "Just as Clement Attlee did not try to re-lay the Western Wall brick-by-brick when he promised to build a ‘New Jerusalem’, the modern Labour party must lay the foundations of our own ‘start-up nation’, not construct a replica," he said.
His comments come in the week that Palestinians in the West Bank renewed calls for economic independence from Israel, following a series of negotiations between Israeli and Palestinian finance ministries. Haaretz reported that Palestinians are keen to detach as far as possible from Israel's economy, and gain control over customs.
Israel collects customs and value-added taxes for the Palestinian Authority.
Lammy admitted in the piece that the constant threat of war, the occupation of the West Bank and mandatory conscription in Israel, as well as the mass migration of Jews to Israel, had been a great driver of economic success, and was not a model Britain could or should emulate.
"Ethical or not, there’s no denying that this rite of passage [compulsory service in the Israel Defence Force] has been the hotbed for innovation," Lammy said.
But a economic tactic it could attempt was the "no fear" culture amongst Israeli politicians, civil servants and investors, when it comes to entrepreneurship.
The Israeli government created its on venture capitalist fund from a $100m investment, which "now commands more than double the amount of venture capital investment per head than the USA and eight times that of Britain."
Another fund, the Office of the Chief Scientist, provides seed money to inventors, absorbing risk and exposing them to investors.
"To those of us that believe the state can be an accelerator, rather than a handbrake, to economic growth, there is a temptation to simply copy and paste these policies to the table office in the House of Commons," Lammy said.
"But which government has the courage to admit to what such a growth agenda entails, which leader has the resolve to stick by it in barren times and which media organisation would tolerate it? "
The Fabian Society report, Reflection and Renewal: Where Next For The Left In Israel? included other essays from James Morris, a former speechwriter for Ed Miliband, the leader of Israel's leftist party Meretz and Israel's first Labour Arab-Israeli politician.