When it comes to hi-tech startups, Nobel laureates and computer innovation, Israel has few equals. It attracts more venture capital that any country outside the United States. The world's top technology giants, including Microsoft, Intel and Google, have set up key research facilities here. And it boasts the most foreign companies traded on the tech-heavy Nasdaq stock market. Now, a country whose only significant resource is its brain power finds itself losing its best and brightest - with one out of four Israeli academics working in the US because of low pay and limited research budgets at home. The Manufacturers Association of Israel recently announced that 25,000 hi-tech employees left the country in 2007 - an increase from the previous year. Serious attrition from Israel could undermine a creative culture that has helped pioneer everything from Internet telephone calls to instant messaging to firewall security to pills with microscopic cameras. "We don't have manpower and we don't have resources and we never will. The only thing that maintains life here is brains," said Dan Ben-David, a professor of economics and public policy at Tel Aviv University, who has researched the topic at length. "We don't have the luxury of getting into the trap of mediocrity." Ben-David says his data gives Israel what amounts to the worst brain-drain problem of the developed world - six times that of the average European country. "We abandoned an entire generation," he said. Aaron Ciechanover, winner of the 2004 Nobel Prize in Chemistry, has been one of the fiercest critics of the trend. Last month, the Technion professor compared the escape of Israeli scientists to that of Jewish scientists from Germany prior to the Holocaust. "Those who left will not return," he said. "They are eating away at another foundation on which the State of Israel exists." In Israel, Oded Galor was one of the country's top economists, Hod Lipson was a pioneering robotocist and Eran Perlson was a promising PhD student researching Lou Gehrig's Disease. All three are now pursuing promising academic careers at Ivy League universities in the US, and none are planning to return to Israel anytime soon. "I enjoy the science," said Perlson. "But I also expect that I can make an honest living doing it and have a family that can get by." Israel suffers from an antiquated academic structure that eschews reform, has paltry salaries for top professors and a steep slashing of government financing, all of which have resulted in a dramatic drop in the number of full-time academic positions. The malaise in Israeli academia was brought home recently by a three-month university strike that nearly wiped out the current academic year. Unlike other countries, brain drain here is seen as an existential threat. Good science is essential to national security, fueling breakthroughs that put Israel at the forefront of missile technology and other defense measures needed to safeguard it from its enemies. "We look at hi-tech as something that will not only save the economy, but it is also something that is saving us, every day," said Ben-David. In its early years, while fighting for its survival, Israel built a half-dozen top-flight universities. The hi-tech boom followed in the 1990s when the country's infectious entrepreneurial spirit was nurtured by generous government backing of R&D. The military proved to be a fertile training ground for promising engineers, and a million immigrants from the former Soviet Union gave a sharp boost to science and technology. Last year alone, Israel drew more than $1 billion in international venture capital. But Ben-David says Israel's achievements could be at risk if top minds continue to flee. His research shows the trend is most dire in the fields Israel excels at most. In computer science, for instance, 33 percent of professors now teach in the top 40 universities in the US. In economics, the figure stands at 29%, including 2002 Nobel Prize-winner Daniel Kahneman, who teaches at Princeton. "Apparently we are really, really good, because if our people can penetrate the top American universities at such a rate, that means we have world-class universities," BenDavid said. "That is the bright side. The flip side is that we are doing something very, very wrong if we can't keep them here." Between 1976 to 2005, the number of academic slots in the US grew by 29%. In Israel, they dropped by 35%, according to BenDavid. Statistics aside, the perceived slide in educational standards here has been characterized as nothing less than a national shame. "The people of the book have forgotten the book somewhere," BenDavid said. After years of ignoring the threat, the government finally seems to be taking it seriously. "If we do not take a stand today, we will lose the global campaign," said Industry, Trade and Labor Minister Eli Yishai. He recently commissioned a poll to discover what would bring back the ex-pat Israelis. He also dispatched officials to the US to lure them back personally and offered tax breaks to those who return. Roee Madai, an assistant to Yishai, said that about half of those surveyed said they would like to come home but couldn't find a job that offered enough professional satisfaction. "Their experience in Israel was not good - people with doctorates were offered jobs as technicians, something that is not befitting their skills," he said. So, Madai set off to the US in April on an optimistic recruiting trip. "If I can bring back 10 people, I will feel that I have done my part," he said. "We are starting a snowball effect here." To help him, the government announced a drive to persuade its citizens to return home this year by offering tax breaks, employment and small-business loans. The project, dubbed "Coming Home," includes a 10-year foreign income-tax exemption to any of the 650,000 Israelis who live abroad, including some 450,000 in North America, according to government figures. For some, it might already be too late. Perlson, a 36-year-old post-doctoral student at the University of Pennsylvania, said his dream was to advance ALS research in Israel and would be willing to earn much less to do so. But that remains a long shot, he said. "I have a better shot of working at Harvard than at Tel Aviv University," he said. Galor, who was ranked as one of the top economics professors in Israel, is now a full professor at Brown. He said he is making about eight times as much as he did in Israel, where he had to take on side jobs to adequately support his family. "If all things were equal, I would prefer to be in Israel. But there are restraints in the universities that do not permit those in Israel to devote their time to the full extent to research," he said. "At the moment it is simply impossible economically and it is impossible academically." Lipson, a 40-year-old professor at Cornell, recently designed an "evolving robot" that can learn how to repair itself after being damaged. He sees an upside to Israeli students training abroad, saying it's "one of the reasons that Israel is on the map academically." But to stay competitive, he said, Israel had to offer a promising option to which to return afterward. Ben-David warns the consequences of Israel's brain drain could be catastrophic. Israel's exceptional current crop of professors is aging, with nearly one-half of the entire senior academic staff aged 55 and above. With mass retirement just around the corner, the question remains, Who will replace them? President Shimon Peres, Israel's most prominent champion of scientific advancement, said the challenges the country faces have evolved over time. "Until now, our main problems were material, now they are more intellectual, scientific and spiritual," he said. Peres said he's taking the braindrain problem seriously, but has faith Israel will be able to maintain its excellence. "It is a tradition of the Jewish people not to be satisfied," he said. "We introduced to history dissatisfaction, and dissatisfaction is the source of our creativity."