2000 – 2010 Israel Competitiveness 2000 – 2010 Israel 2021.

Israel Competitiveness 2000 – 2010

Israel 2021

• competitive ranking has been decreasing constantly;

• What does it (really) mean?

• No such thing as “general Competitiveness”

• 12 distinct pillars comprised of • Ranks in 90 Parameters:

Israel - General Trend

Israel GCI Rank

10

12

14

16

18

20

22

24

26

28

2004 2006 2007 2008 2009 2010

Israel GCI Score

4.5

4.6

4.7

4.8

4.9

5

5.1

5.2

5.3

5.4

5.5

2004 2006 2007 2008 2009 2010

Substance is in the “Little” Details..

0

10

20

30

40

50

60

70

80

90

100

1st pillar: Institutions

2nd pillar: Infrastructure

3rd pillar: Macroeconomic stability

4th pillar: Health and primary education

5th pillar: Higher education and training

6th pillar: Goods market efficiency

7th pillar: Technological readiness

8th pillar: Business sophistication

9th pillar: Innovation

2004

2006

2009

Stages of Research

• STAGE 1: Israel over time

• 9 View Points• Tracing main tendencies• Strength & Weaknesses

in 90 parameters

• STAGE 2: Israel v. 133 Economies

• Isolating 21 economies – Israel’s neighborhood

• Are there typical pillars of Strength or Weaknesses?

STAGE 3: Comparing all findings

with IMD reports

012345678

2006

2009

Israel - Main Findings

• Main reasons for deterioration are:– Governmental bureaucracy & unstable policy;– Market Dominance– Education System– Infrastructures;– police services.

• Main Strengths:– Innovation

• Scientific R&D, Patents, Capacity– Entrepreneurship– Technological readiness

Mapping Weaknesses

Mapping Strengths

Israel-Hungary: comparison between all 12 GCI pillars

3

3.5

4

4.5

5

5.5

6

6.51st pillar: Institutions 5%

2nd pillar: Infrastructure 5%

3rd pillar: Macroeconomic stability 5%

4th pillar: Health and primary education 5%

5th pillar: Higher education and training 8.5%

6th pillar: Goods market efficiency 8.5%

7th pillar: Labor market efficiency 8.5%

8th pillar: Financial market sophistication 8.5%

9th pillar: Technological readiness 8.5%

10th pillar: Market size 8.5%

11th pillar: Business sophistication 15%

12th pillar: Innovation 15%

New Zealand* 20

Israel 27

Israel-New Zealand: comparison between all 12 GCI pillars

3

3.5

4

4.5

5

5.5

6

6.5

1st pillar: Institutions 5%

2nd pillar: Infrastructure 5%

3rd pillar: Macroeconomic stability 5%

4th pillar: Health and primary education 5%

5th pillar: Higher education and training8.5%

6th pillar: Goods market efficiency 8.5%

7th pillar: Labor market efficiency 8.5%

8th pillar: Financial market sophistication8.5%

9th pillar: Technological readiness 8.5%

10th pillar: Market size 8.5%

11th pillar: Business sophistication 15%

12th pillar: Innovation 15%

New Zealand*20

Israel 27

Israel-Austria: comparison between all 12 GCI pillars

3

3.5

4

4.5

5

5.5

6

6.51st pillar: Institutions 5%

2nd pillar: Infrastructure 5%

3rd pillar: Macroeconomic stability 5%

4th pillar: Health and primary education 5%

5th pillar: Higher education and training8.5%

6th pillar: Goods market efficiency 8.5%

7th pillar: Labor market efficiency 8.5%

8th pillar: Financial market sophistication8.5%

9th pillar: Technological readiness 8.5%

10th pillar: Market size 8.5%

11th pillar: Business sophistication 15%

12th pillar: Innovation 15%

Austria 17

Israel 27

What are the Deterioration Engines ?

Institutions - Public sector: deterioration Factors

0

10

20

30

40

50

60

70

80

90

100

2001 2002 2003 2004 2006 2007 2008 2009 2010

1.08 Burden ofgovernmentregulation

1.14 Organizedcrime (1.11)

1.15 Reliability ofpolice services

Concentrations level

0

20

40

60

80

100

120

140

2006 2007 2008 2009 2010

Goodsmarketefficiency

Extent ofmarketdominance

Infrastructure: Deterioration Factors

0

10

20

30

40

50

60

2001 2002 2003 2004 2006 2007 2008 2009 2010

2.02 Quality ofroads

2.03 Quality ofrailroadinfrastructure

2.04 Quality ofportinfrastructure

Deterioration in education components

• During 2001-2004 Israel ranked as a leading country in Education paramaters

• As of 2004, Israel’s ranking severly deteriorating (see also PISA exams).

0

20

40

60

80

100

120

2001 2002 2003 2004 2006 2007 2008 2009 2010

Secondaryenrollment

Quality of theeducational system

Quality of math andscience education

Quality ofmanagement schools

The Eminent Danger –

Deterioration in Strength Engines

Innovation as a reflection of Israeli Education (2001-2010)

• Borrowed time

• how long will it take for the deterioration in EDUCATION will be erase Israel’s competitive advantage in INNOVATION?

0

10

20

30

40

50

60

70

2001 2002 2003 2004 2006 2007 2008 2009 2010

4.10 Primaryenrollment

5.01 Secondaryenrollment

5.02 Tertiaryenrollment

9th pillar:Innovation

Conclusions for a New Beginning..

• Israel has very definite “Power Engines”• All of them rely heavily on Human Capital

(Education)

• Israel Weakness are also concrete & Steady:– Outdated Public Sector– Concentration– Connecting Infrastructures (Ports & Roads)