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(photo credit: Ariel Jerozolimski)
Should the government not intervene soon to stem the country's ever-increasing "brain-drain," the local hi-tech and science sectors could suffer a serious downturn in productivity quality and quantity in the foreseeable future.
"The government has failed to advance the local sector enough to prevent our best hi-tech workers, scientists, researchers, academics and doctors from leaving the country for better opportunities abroad," Manufacturers Association of Israel President Shraga Brosh warned at the annual Sderot Conference for Society on Wednesday.
"Countries around the world, most notably the US, are gaining from all the talent they take from Israel, while our talent pool is shrinking at an alarming rate."
According to the Manufacturers, Israel has lost more than 25,000 hi-tech workers to electronics and software companies in the US over the past seven years as the government has continued to cut down the budget for research and development programs. Meanwhile, the Israel Academy of Sciences and Humanities reported earlier this year that 95 percent of Israeli doctoral or postdoctoral students studying in the US have no concrete plans to start an academic career in Israel.
"In order to combat this problem, the government must make this country optimal for entrepreneurship, investment and research and must improve working conditions and salaries," Brosh said.
Included among the factors that Brosh said contribute to the high rate of emigration among the country's scientists and academics is the relatively low purchasing power Israelis enjoy compared to citizens in OECD countries; the country's high tax level; the difficult and complicated bureaucracy faced by start-ups and the government's slashing of R&D funding.
Additionally, Brosh noted, the gradual squeeze of NIS 4.5 billion, since 2000, in research and development budgets has forced numerous factories to transfer their research and development activities to different countries around the world, where they receive significantly better financial packages.
Brosh called on the government to increase its R&D funding 12% by 2015, to reduce income tax to 40% by 2010 and reduce corporations tax to 20% within the next three years.
Separately, on Wednesday, Elisha Yanay, general manager of Motorola Israel, told The Jerusalem Post that the brain-drain will not affect the country's electronics industry.
"Israel, for better or worse, is a "mid-cost" country when it comes to the electronics market," Yanay said at at a meeting of the World Electronics Forum in Tel Aviv.
"Asia, which is currently by far the biggest electronics manufacturer in the world, is a low-cost market and Israelis are not jumping to leave the country for lower salaries in China and Japan."
The World Electronics Forum is a voluntary gathering of CEOs and directors of electronics industry associations worldwide. Founded in 1995, the WEF meets annually to discuss major topics of common interest to the various associations, exchange information and strengthen relations between electronics leaders for the benefit of the industries.