Israel, startup nation? not anymore, says Google study

Israel, startup nation? not anymore, says Google study

Study says main problem is low productivity rate compared with OECD countries.

By Amir Teig | Jul.16, 2013 | 4:40 AM

A fossilized public sector is causing Israel to fall behind the developed world in adopting new technologies, a study published by Google Israel on Monday said.

“The extent to which the Israeli public sector harnesses information and communications technology – doesn’t match its own national self-perception as a global leader in technology and innovation,” the study said, asserting that a laggard government is holding back the rest of the economy.“It is hard to imagine a truly innovative country without the government setting an example for integrating technology, either as a customer for advanced tools and methods, or as a supplier of innovative services,” said the study, which was prepared by the research firm Trigger-Foresight.

The main problem presented by Trigger-Foresight is Israel’s relatively low productivity compared with other developed countries. Israel ranks 24th for productivity among the 34 countries belonging to the Organization for Economic Cooperation and Development.

“In Israel, which obviously started out from a low position, closing the productivity gaps with OECD countries continued only until the 1970s,” the study said. “Since then Israel’s productivity growth rate has dropped to the same rates as other developed countries, preserving the gap between it and the leading countries.”

The report pointed to how the government has failed to bring technology to education, citing the “98 Tomorrow” program, which brought computers to schools but failed to provide teacher training or adjust the curriculum to the new reality. In 1998, computerization in Israeli schools was on par with developed countries; by 2006, it was far behind.

“In the last decade, an unacceptable gap has developed between the integration of ICT [information and communications technology] into all aspects of life and the reality in Israeli schools, and between Israeli schools and those in the other countries,” the report said.

Closing the productivity gap can only occur by adopting more technology and innovation, the report concluded, via a long-term national program to encourage the use of information technology.

“The countries ranking highest for innovation and use of information and communication technology invest much effort in advancing them,” the report said. “This entails a deep commitment that doesn’t stem from failure. These countries are very successful in carrying out programs with the clear vision that their inhabitants will achieve better quality of life thanks to the use of technology.”

The report recommends that Israel adopt a national plan that would be put into practice by a single, inter-ministerial and inter-sector body.

“Demographic changes, the growing digital gap between population groups, the shortage of quality labor in the information industry and other trends pose challenges towards achieving this goal. The integration of key populations in the workforce through ICT will help shrink the socioeconomic gaps and forge greater social cohesion.”

About bambooinnovator
Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (, the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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