Study shows Israel No. 1 for R&D in global study

Central bank has the most positive impact on economic development of any country.

By NADAV SHEMER
May 18, 2011 23:50
2 minute read.
The Jerusalem Post

laboratory 311. (photo credit: Bloomberg)

Israel is still the world’s top investor in R&D as a proportion of its gross domestic product, and its central bank has the most positive impact on economic development of any country, according to a study published Tuesday by Swiss international business school IMD.

Israel ranked 17th overall in the school’s global competitiveness rankings, which polled 59 mostly developed countries. That ranking put Israel just ahead of Austria, (mainland) China and the United Kingdom, but it would have placed even higher had it not been let down by poor economic performance.

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Hong Kong and the United States tied for first, knocking third-placed Singapore from the top, while Sweden and Switzerland rounded out the top five.

The study has been published annually by the IMD World Competitiveness Center since 1989 and is considered a leading indicator of countries’ economic competitiveness. It assesses countries in four main categories: economic performance, government efficiency, business efficiency and infrastructure, with its data based on a set of key criteria combined with the results of a survey of top executives from each of the countries.

Israel fared particularly well in the infrastructure category, where it ranked first among all countries in the proportion of business expenditure on R&D, proportion of total expenditure on R&D, scientific research, informationtechnology skills, and public- and private- sector tariffs.

Under the category of business efficiency, Israel ranked first in entrepreneurship, flexibility and adaptability, and second for venture-capital and attitudes toward globalization. But it finished a lowly No. 54 for workforce participation and also scored poorly for image abroad.

In government efficiency, Israel was ranked first for the role of its central bank in economic development and second for investment incentives. But that was offset by its last-place ranking for immigration laws.

However, it was economic performance that really let Israel down, thanks to poor data on employment (No. 52), the cost-of-living index (No. 49), the relocation threat to its R&D facilities (No. 48) and export of goods (No. 42).

The Federation of Israeli Chambers of Commerce, which represents IMD in the country, said although the results were overwhelmingly positive, they show that Israel still faces many challenges, including a need to downsize the public sector and bureaucracy, to lessen the burden on the business sector and to increase workforce participation of minorities


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