Israel's lack of public infrastructure spending excludes the country from being home to the top ten e-commerce business environments.
(photo credit: NIR ELIAS / REUTERS)
Start-Up Nation may be punching above its weight in churning out entrepreneurs, but Israel is stagnating when it comes to its overall ability to adapt to disruptive technological change.
Israel has slipped to 20th place from 11th worldwide out of 82 countries ranked, according to a technological readiness report published this week by The Economist Intelligence Unit, the research and analysis division of British media company The Economist Group, the publisher of the weekly magazine The Economist.
For the 2018-2022 forecast period, Israel and Great Britain are tied, according to the report, which measures general Internet access, digital economy infrastructure – such as e-commerce, e-government and cybersecurity – and so-called “openness to innovation,” gauging the number of international patents granted and R&D spending.
When it comes to private per capita investment in R&D, Israel ranks No. 1 in the world – allocating some 4.3% of its GDP to research. But that’s not enough to make up for significant underspending on broadband and transportation infrastructure.
From 2013-2017, Israel ranked on par with the US and other mostly Western European countries.
“Internet access to broadband, speed, we simply haven’t invested enough in infrastructure,” Prof. Dan Ben-David of Tel Aviv University and the Shoresh Institute, told The Jerusalem Post. “The government isn’t doing what it should in terms of infrastructure. Yet the private sector is going above and beyond in Israel.”
The lack of public infrastructure spending excludes Israel from being home to the top 10 e-commerce business environments.
And even in cyber-security preparedness, Israel lagged behind many developed nations – surprising, given the country’s growing share of worldwide cybersecurity R&D. (Last year, Israel enjoyed some 16% of all global private investment in cybersecurity.)
Israel is ranked 20th, according to the Global Cyber-Security Index, published by the International Telecommunication Union (ITU), a UN agency. It measures a country’s cybersecurity capabilities in protecting its infrastructure – such as its smart electrical grid – along with legal, technical and organizational capabilities, including public awareness and intra-state cooperation.
Again, it comes down to a question of whether the government is spending enough on maintaining general infrastructure. The Economist, the OECD and the IMF all say that Israel isn’t doing enough.
At the same time, Israel is enjoying more private business investment per capita than any other country in the OECD – or among the grouping of wealthy, industrialized countries.
“We’re almost off the charts in terms of business sector investment in R&D in Israel,” Ben-David said, adding: “When you look at the results of patents, we for the past 20 years have been above the G7 countries – in terms of the number of patents per capita GDP.”
When it comes to e-government, or public services being offered on the web, Israel ranked No. 2 in the Middle East/North Africa region, behind the United Arab Emirates.
Ben-David counseled that the report isn’t clear-cut, given that it’s an aggregate of many different indexes.
“I would take this Economist index with a grain of salt. In parts of it, we’re really bad. In other parts, we’re really phenomenal.”