Download On the ISRAEL 15 Vision

The Reut Institute
Designing a Future
Av, 5770
July, 2010
What is Reut?
• Established: 01.01.2004
• Objective: Providing Pro Bono Decision
Support to Government of Israel and its
agencies
• Financing: Community of 3,000 people and
150 donors
2
Why Reut?
Short, Unstable Tenures
Complex Challenges
Fragmented Parliament &
Gov
Volatile Environment
Short Term, Populist,
Sectarian conduct
Long term, Substantive
Broad View
Effectuate Change
Training Future
Strategists
Model to Emulate
3
ISRAEL15 Vision
To Become One of the 15 Leading
Countries in Quality of Life
Av, 5770
July, 2010
Israel Must Leap
Large Gap
Gaps continue
Developed
in Quality
Israel
Danger
of
Collapse
Countries
toofwiden
Life
Leapfrogging
is not
a luxury;
it isHeavy
a necessity!
security burden
Israel is 2nd in the world in the
Weak education system
export of Human Capital
Low participation in work force
According to The Economist Israel ranks
38th in Quality of Life
5
ISRAEL15 Vision
ISRAEL15 Vision: Becoming one of the
Rapid
Growth
Sustainability
fifteen leading
countries in
terms
of Quality
Preserving resources for
of LifeChange in the pace of
future generations
change
This Vision requires a Social and Economic
Leapfrog in order to close the gap in Quality
Inclusiveness
of Life between Israel
and other developed
All citizens
enjoy the fruits
countries
of growth
6
The Story of Israel’s Economy
US = 1
.8
Since then, Israel has grown by 1.5%
and has not closed the gap
1990’s
Immigrant Absorption
1950’s Immigrant Absorption
.6
60% of the US
.2
.4
Globalization
of Israeli market
1985 Stability Plan
30% of the US
The ‘Lost Decade’
0
1965-1967 Recession
1950
1960
1970
Israel leapt
between 1951-72
1980
2000 2007
1990
GDP Rate Compared to the US )1950-2007(
Source : Professor Ricardo Hausmann
7
.8
.6
Only 1 in 4 experience
Accelerated Growth
Only 13
“Economic Miracles”
.2
.4
Leapfrog
Almost all countries
experience Growth
0
Real GDP per Capita %
Growth, Accelerated Growth, Leapfrog
X
X+8
X+25
Years
9
Source :Prof.
Source:World
R. Hausmann
Bank,etGrowth
al., Growth
Report
Accelerations
The Public Sphere is Critical
Vision
Leadership
and
Politics
Labor
Market
Central
Unique
Dedicated
A
Shared
and
Public
Savings
and
Brain,
A pact
Elite
Future
Global
Elite
Investment
Sphere
Task
Forces
Development
Policy
Values
Institutions
10
Values
Future
orientation
Inclusiveness
Common Denominator for
Trust
Countries
that Leapt
A variety of
market economies
Pragmatism
11
Institutions
Central
Brain
Identifying
Trends &
Analyzing
Relevancy
Elite
Task Forces
Ability to
Execute
Decisions
Flexibility in the
Market
A Pact
12
New Deal in the Labor Market
Employers flexible to
hire and fire in return for
a commitment to keep to
employment laws
Government
Government provides a
safety net & training in
return for improvement
in competitiveness
Protect the
Worker not
the Job
Employer
s
Workers
Workers agree to flexible labor
markets in return for improvement
13
of Human Capital & safety net
National Development Policy
Drip irrigation
National asset:
Unique & global
Global trend:
agricultural
development policy
water shortage
pioneering
Israel’s
regions have an unexploited global potential
14
Growth in Israel is not inclusive:
The Periphery regions are Lagging Behind
19.9
34.2
346.3
13.7
31.5
56.5
6.1
60.6
4.8
11.3
30.4
23.6
60.6
94.9
31.3
49.8
71.6
32.2
Number
Jobs
‫משרות‬of
‫מספר‬
(thousands)
2006
)‫(אלפים‬
Income
Gaps
‫שיעור הפער‬
‫בהכנסות‬
5.1
62.7
6.9
53.8
30.9
7.7
52.5
of Poor
in
‫עניות‬%‫משפחות‬
‫ שיעור‬Participation
‫שיעור השתתפות‬
Families
Labor
‫העבודה‬Force
‫בכוח‬
North ‫צפון‬South ‫דרום‬
Center
Unemployment
‫שיעור הבלתי‬
Rate
‫מועסקים‬
Tel-Aviv ‫ אביב‬National
Average
‫מרכז‬
‫תל‬
‫ממוצע ארצי‬
15
Source: CBS, "Social and economic indicators" by districts in percentages, 2008.
The Result: Continuous Migration from the
Periphery
30,000
20,000
10,000
0
84-5 86-7 88-9 90
91
92
93
94
95
96
97
98
99
00
01
02
03
04
05
06
07
08
-10,000
-20,000
-30,000
North
Center
‫הצפון‬
Tel-Aviv
‫המרכז‬
South
‫אביב‬
‫תל‬
‫הדרום‬
16
Source: Based on CBS providers, by district, 1984-2008 (in thousands.
Challenge: How to Develop Israel’s
Periphery?
Old strategy
New strategy
Change from the outside
Israel is a small state: Uniform
government policies
Change from within
Israel includes a number of distinct regions
regional development policy based on
encouraging any type of employment unique assets
Import high-quality human capital
focus on local population
Distance is the main barrier
accessibility is one of the main barriers
17
Regional Leapfrog
Nature & Landscape
History & Heritage
How do regional leapfrogs occur in a
globalized world?
When regional assets meet human capital
Local Expertise
Climate
Human Capital
18
Compete
with
the Global
Wellness
Industry
Western
Galilee
Unique
Assets
Austrian Tyrol
Creative
Tourism
Wellness
Scientists &
Engineers
Swiss Alps
Dance
Health Food
Manufacturers
Olive Oil Secrets
Central Finland
Artists
B&B Industry
Medical Tourism
Natural Therapy
Health
food
Acre Walls
Technologies
Theater
Technologists and
Researchers
Israel is Not Talking Leapfrog
Growth
Leapfrog
No Vision
Vision Necessary
Policy
Institutions
Domestic Industrial Policy
Unique & Global Development Policy
Labor Market: conflict
Labor Market: Pact for Growth
Economics
Multidisciplinary
Local Government Ignored
Local Government Necessary
23
Israel15: National Obsession
15‫ישראל‬
Redeeming the Land
Making the Desert Bloom
Aliyah
Leapfrog
24
On the ISRAEL 15 Vision:
“This is a very impressive document, based on clear
thinking and a knowledge of the recent experience
and writing about growth at various stages of
development.”
Professor Michael Spence, Economics Nobel Prize
Laureate, and Head of the U.N Commission on
Growth and Development
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