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Vision and Strategy for Economy and Society in a Global World

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Vision and Strategy for Economy and Society in a Global World Israel 2028 Vision and Strategy For Economy and Society in a Global World Presented by a Public Committee Chaired by Eli Hurvitz Edited by David Brodet Initiated and supported by the US - Israel Science and Technology Commission and Foundation March 2008 © US - Israel Science and Technology Foundation “Israel 2028” Logo design: Sveta Notis Design and printing: Codaf Ltd. Translation: Tamar Bash Israel 2028: Vision and Strategy For Economy and Society in a Global World Table of Contents Foreword 5 List of Participants 8 Executive Summary 13 Objectives, Policy and Recommendations 19 Part I: Historical Background, Vision and Strategy Chapter I: Introduction and Historical Background 31 Chapter II: The Vision 41 Chapter III: Dilemmas & National Strategy - A Mirror to Israel's Future 47 Part II: National Strategy - Economic and Social Realms Chapter IV: Israel and the Global Challenge 81 Chapter V: Institutional Changes in Public Service 99 Chapter VI: Leveraging Scientific/Technological R&D 113 Chapter VII: Traditional Industries and Services Sectors 141 Chapter VIII: Higher Education and Scientific Research 167 Chapter IX: Labor Policy 191 Chapter X: The Environment 213 Chapter XI: Physical Infrastructures 227 Part III: Macro-Economic Developments Chapter XII: Macro-Economic Developments 257 Appendix I: The Experience of Six Small Successful Nations 289 Appendix II: U.S. – Israel Science and Technology Collaboration 2028 303 3 Israel 2028: Vision and Strategy For Economy and Society in a Global World Foreword “Israel 2028: Vision and Strategy for Economy and Society in a Global World” is an extensive plan to achieve national objectives - rapid, balanced growth and reduction of social gaps – aimed at positioning Israel among the 10-15 leading countries in terms of economic achievement and quality of life, over the next twenty years. The plan addresses a broad range of issues: economy and society, government and public administration, globalization, and science and technology. It also discusses questions of policy on issues such as the labor market, national infrastructures, education, higher education, scientific research, traditional industries, and integration into the global process. These and other issues are discussed and presented as a mirror to Israel’s future and its position at the economic, social, educational and cultural forefront of the world’s nations. This expansive plan was created through the initiative of US-Israel Science and Technology Commission (USISTC) on the one hand, and individuals involved in economics, business, science and technology in Israel, on the other, who saw it as their civil obligation to undertake and promote this important mission, with the help of experts in the various fields. Initially, the plans’ initiators at the USISTC intended to concentrate on topics directly and immediately related to US-Israel cooperation, as well as to promoting Israel’s rapid growth and integration into the global process, primarily in the science, advanced technology and manufacturing infrastructure realms. However, given Israel’s complex reality, in which an advanced, globally-integrated economic sector exists alongside a broad sector that lags behind technologically and suffers from low productivity, and which is characterized by broad income gaps, significant education disparity and a low rate of participation in the labor force, it became clear to USISTC that rapid, sustainable growth, necessary for promoting cooperation with the US as well, is a multi-faceted development, whose existence depends upon a broad range of factors and policy measures, only part of which involve R&D and advanced technology. The other part involves promoting traditional industry sectors, advancing government and institutional quality, improving labor policy, expanding higher education, improving the school system, reducing social gaps, developing physical infrastructures and enhancing environmental quality. The various realms are closely connected and mutually influential, although these links are sometimes obscure. We believe that a valuable strategic plan must reveal these important connections as well as the critical factors that impede growth and reduction of social gaps; it must propose a multi-disciplinary policy to address these realms. The initiative of these individuals from the economics, business, science and technology realms in Israel was born out of the recognition that we, residents of the state of Israel, are responsible for shaping our existence and our fate in a changing, dynamic world. We are responsible for 5 Foreword shaping the state’s nature and character, to be left after us for future generations. Out of this recognition was born the need to shape a clear, consistent strategy that ensures the realization of the great potential of Israeli society and economy, in order to meet Israel’s unique internal and external challenges. The common view of the Commission and the group from Israel as regards the issues facing the economy and society, and the agreement they achieved as regards the goals the state must adopt, produced a shared effort whose outcome is the plan presented here. The work of formulating the plan continued for nearly two years, and was based on considerable research and knowledge at the service of the members of the working groups. It examines Israel’s fundamental issues, elucidating them in a multi-disciplinary discourse, and integrating the various chapters into one paper with a unifying approach that identifies the mutual influences and the connections between the various realms and issues. The plan profited, on the one hand, from the high academic ability of its members from the science and research world, as well as from the considerable knowledge, expansive perspective and rich experience of others from the practical world, on the other hand. All members worked out of recognition of the plan’s importance and a sense of urgency. In 2028, Israel will mark its eightieth year. Most of the founding generation, which lay down the foundations for the Israeli state’s independence, will no longer be with us, but we owe it to them and to coming generations to make all efforts possible so that Israel, the dream of so many, not only survives, but fulfills its historic mission as an exemplary nation. The building of the Israeli nation is a process that will continue for many years to come; its foundations were created during pre-state times and the state’s early days. It is our duty to add another layer to fortify this building. We believe that Israel cannot afford to have mediocre levels of economy, science and technology, government and security. It cannot allow large social gaps or the strengthening of the forces that crumble it from within. The great challenges that Israel faces at home and abroad require the building of a quality education system, world-class science and technology infrastructure, an outstanding economy, and a society based on justice, tolerance, conciliation and social solidarity. The strategic plan is wide-ranging and presents numerous essential issues in detail. It is intended for adoption and decision-making by the government of Israel and to serve as a platform for public discussion. Public agreement will facilitate fulfillment of the plan. Realizing the vision and attaining the ambitious, important objectives presented by the plan require determined national leadership that sets clear, transparent, long-term economic, educational and social priorities, and implements the proposed strategy for the sake of Israel’s future. This plan was created by an extensive team that included many people. As stated, its formulation 6 Israel 2028: Vision and Strategy For Economy and Society in a Global World was initiated by USISTC and the group from Israel, and was funded by the US-Israel Science and Technology Foundation (USISTF). We wish to thank the Samuel Neaman Institute at the Technion, and Shaldor, who assisted in research and funding. A public steering committee headed by Eli Hurvitz led the mission and was very active in the shaping of the document and its content. Research teams with various areas of expertise, from Israel and abroad, were responsible for preparing the materials and writing the chapters. Michal Eitan directed the project’s complex administration with talent and dedication. Yarom Ariav, Yoram Gottgeld, Prof. Elhanan Helfman, Ariel Weiss, Dan Tolkovsky, Prof. Manuel Trachtenberg, Dr. Karnit Plug and Alex Keinan read the draft of the plan and contributed valuable comments. A heartfelt thanks to all who took part in this important, comprehensive endeavor and to all who contributed comments to improve the plan. David Brodet Editor-in-Chief 7 List of Participants List of Participants STEERING COMMITTEE US-ISRAEL SCIENCE & Eli Hurvitz (Chairman) TECHNOLOGY FOUNDATION Chairman, Teva Pharmaceutical Industries MEMBERS David Brodet (Editor-in-Chief and Director) Arnold Brenner Chairman of Board, Ben Gurion University Board Member Former Director-General, Ministry of Former Vice President, Motorola Finance Ann Liebschutz Dr. Eli Opper Director Chief Scientist, Ministry of Industry, Trade Dr. Denis Simon and Labor Board Member Major-Gen. (Res.) Prof. Isaac Ben-Israel Provost and Vice President of Academic Professor of Philosophy, Tel Aviv University Affairs, Levin Graduate Institute, The State Member of Knesset University of New York Former Director, MAFAT, Ministry of Defense ADMINISTRATION Yoram Yahav Michal Eitan (Director) Director, Technion Institute of Management
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