Title: The IVA 2005 conference The Future of the Israeli HighTech Industry: The Educational Challenges
1The IVA 2005 conferenceThe Future of the
Israeli High-Tech Industry The Educational
Challenges
- Prof. Manuel Trajtenberg
- The Eitan Berglas School of Economics,
- Tel Aviv University
- June 2005
2Sources of Israels competitiveness in High Tech
- Israel positioned itself as world-class player in
High Tech (e.g. 4th in patents per capita). - High Tech (ICT) contributed 1/3 of growth of the
Israeli economy during 1990-2000 - Human Capital
- main source of Israels comparative advantage in
High Tech comprises entrepreneurship, ingenuity,
daring (hutzpa), - but first and foremost education!
3Necessary conditions for acquiring useful Human
Capital
- Access to top education, from grade school to
Ph.D., including - Solid base in pillars of ST math, computer
sciences, English - Broad disciplinary range new ideas come from
recombination (e.g. bio-informatics, nano,
etc.) - Exposure, first-hand experience with cutting-edge
scientific research.
4Indeed, Israels High Tech Boom of the 1990s
- Lead by the generation born in the 1960s
- went to school in the 1970s, when Israeli pupils
were on top of the international achievement
charts, -
- attended Israeli Universities in the 1980s,
golden era, when e.g. Israel ranked first in
scientific publications per capita.
5Does Israel still hold a Human Capital advantage?
- Barely
- Deterioration of School system, decline in
scholastic achievements, increase in of
ultra-orthodox in entering classes. - Explosion in number of college students, but deep
cuts in budgets for Academia, decline of Research
Universities. - The generation born in the 1980s Went to schools
of poor quality in the 1990s, now entering
declining universities not a rosy prospect
6The Challenge from the Globalization of ST
- Moreover, Israel faces now,
- Global, stiff competition in RD
- Surge of emerging economies into global RD
arena Indias SE students 300,000 per year! - Israel can no longer count on comparative
advantage in plain vanilla RD, but needs to, - climb up the ST ladder,
- compete in cutting-edge ST fields
- needs top-notch academic research
7Focus onThe Decline of Israeli Universities
- Quantity versus Quality, 1990 2002
- 120 increase in number of students
- 33 decline in expenditure per student
- 2. Increasing gap between salaries of professors
in Israel and in the US
Brain drain, very hard to recruit new faculty
8Students in high education in Israel1986 - 2000
2000
1990
9(No Transcript)
10Relative wages of professors and of software
programmers Israel vs. US
2 2.5 times higher
66 higher
Brain drain
11Case in point Tel Aviv University, largest in
Israel
- Shrinking faculty from 1,400 in 2000, to 1,000
by 2006 - Aging faculty 50 older than 55 (in the US
30) peak research productivity in the 40s - In 2004/05 100 retirements, 10-20 hires.
- Financial crisis years of budget cuts gt
deficit, huge actuarial debt (pensions, etc.).
1250 older than 55
30 older than 60
13The decline of Universities continuedworrisome
facts
- Widespread unawareness of implications of decline
in quality of universities for High Tech, for
growth confusion getting degrees vs. academic
research. -
- Government looks the other way virtually only
policy budget cuts, further dilution of
resources. - Bind the government controls both the income of
Universities (tuition), and most of the expenses
(salaries) no degrees of freedom!
14An Agenda for Renewal of Israeli Academic Lead
- To climb up the ST ladder and compete globally,
need major shift in priorities towards academia - Emphasize research quality in allocating
resources to academic institutions, e.g. increase
budget of ISF (for competitive research grants). - Introduce flexibility and hence competition let
tuition, salaries vary across fields
institutions - Develop advanced research infrastructure
- Facilitate the return of young Ph.D.s from the US
(today bureaucratic and financial obstacles)
15Towards a partnership between Academia and High
Tech
- The High Tech sector (including the OCS and VCs)
should, - become an advocate for the rebirth of academic
excellence - forge alliances with academia in frontier
research - Universities should,
- Engage in a closer dialogue with industry to
supply needed graduates, research infrastructure. - Open their doors to commercialize research