Guest Columnist: Nobel intentions

Israel is being pulled up by a tiny class of the most intelligent and resourceful, not because of the educational system but in spite of it.

By DAVID ROSENBERG
Nobel Prize Laureate Dan Shechtman 311 (R) (photo credit: REUTERS/Baz Ratner)
Nobel Prize Laureate Dan Shechtman 311 (R)
(photo credit: REUTERS/Baz Ratner)
Dan Shechtman not only won the Nobel Prize this year, but his discovery in many ways epitomized the Israeli ethos.
His first reaction at observing quasi-crystals was “no such creature exists.”
But he didn’t turn off his electron microscope and ignore what he saw because accepted science said it was impossible. He explored further, verified his finding, withstood the assaults on his reputation by the defenders of orthodoxy and ultimately prevailed.
There is little doubt that Shechtman is poster boy par excellence for Israeli innovation.
But what has it gotten us? Nothing to scoff at: A disproportionate number of Nobel and other prizes, some impressive achievements on the battlefield and in defense technology, and a lot of start-up companies.
Unfortunately there is also a list of what Israeli brainpower hasn’t got us. It has, by and large, failed to create and sustain large multinational corporations that prove their mettle by competing in global markets. Instead, broad swathes of the Israeli private sector are inefficient and uncompetitive, unable to create enough jobs, pay the salaries or deliver the goods and services at the prices and quality of an advanced economy.
How did we become so smart and so stupid at the same time? Look no further than your neighborhood school. Amid the Nobel Prizes and multi-million-dollar technology mergers, there is a tendency to ignore how seriously the educational system, from kindergarten through the universities, is failing. For a country supposedly so dedicated to its intellectual resources, we spend less per pupil on education than the average for OECD (Organization for Economic Cooperation and Development) countries. In fact, spending at the university level and higher actually fell between 2000 and 2008. Israel has more university graduates than any other OECD country except Canada, but it is the only one where the proportion of university-educated people is falling (43 percent for those aged 25-34 versus 45% for the adult population).
We get what we pay for, maybe even less. The OECD Program for International Student Assessment (PISA) routinely puts Israeli students at the bottom of the rankings. In 2009, Israeli students scored fourth from the bottom of OECD countries in math and science and fifth from the bottom in reading. In math performance, Israelis scored closest to Turks, a country with a booming economy but not one based on knowledge industries.
Israel is being pulled up by a tiny class of the most intelligent and resourceful.
They plod through the morass of elementary and high school, get their real education in thinking and other skills in elite army units and then thrive at university here or abroad. They produce our Nobel prizes and great science. The most commercially minded turn their intellectual property into hi-tech companies.
But that’s where they stop. The idea is developed and patented, the product might be brought onto the market – and then the company is sold. A recent Reuters story noted that Israel has been overtaken by China as the foreign country with the largest number of listings on the Nasdaq Stock Market because Israeli start-ups prefer to be bought out than to stay independent, go public and grow.
The track record for Israeli companies expanding and developing into true multinationals capable of competing in the great big world is poor. There is Teva, a few other companies several sizes smaller and then the list trails off.
A lot has been written about why Israel hasn’t been able to produce a Nokia (a standard that should be revised, given the Finnish company’s recent performance, but nevertheless a valid concern).
It’s not a question of patriotic pride, but an issue for all of Israeli society to be worried about.
Hi-tech start-ups provide a small number of jobs, mainly for the cutting edge and creative elite. Big multinational companies (which in a tiny country like ours are the only kind of truly big companies there can be) create lots of jobs for the great middle – the well-educated, skilled, competent and reasonably intelligent – who won’t wow the world with the next big advance in telecommunications or biotechnology but know how to engineer it into a workable product, set up a production line, plan a marketing campaign, manage the company’s finances, personnel and logistics, and undertake a host of other unsung but skilled and well-paid tasks. Those are jobs that tend to be ignored as we marvel over another Nobel prize and laud Jewish brainpower.
The best can overcome the mediocrity of our educational system. Others succeed by imbibing the country’s freewheeling, can-do atmosphere. But too many of the rest enter the workforce without the skill sets required by a modern economy. A hi-tech entrepreneur deciding whether to keep his company independent has any number of forces working against him – the demands of his venture capitalist backers to cash out, the complications and cost of complying with securities laws – but I would suggest that the difficulty of filling out the ranks of managers is a major factor as well. It might also explain why so many start-up entrepreneurs who dreamed of bigger things crashed.
It would be unfair to blame all the economy’s ills on education. Many of the inefficiencies are the inevitable consequence of being a small country, isolated from its neighbors, burdened with heavy defense expenditures and increasingly weighed down by the haredi population, which as it has grown has created an intolerable burden on the economy by refusing in principle to contribute any productive labor.
But a failing educational system strikes right at the heart of the economy’s most powerful asset – its people and their intellectual resources – and is entirely in our power to fix. By comparison with making peace with our neighbors or changing the socio-dynamics of a religious community, it’s a straightforward and simple investment with significant a return.