Academia and Economic Growth

Priority must be given to allocating Israel’s resources to education, especially to the universities.


By Moshe Arens

(A version of this column appeared in Haaretz on May 12, 2010.)

Much research has been carried out over the years on the causes of economic growth. In recent decades, in the age of the technological revolution, it has been recognized that the availability of scientific and technical skills are the primary motor propelling countries’ economies. These skills are acquired in the countries’ educational systems. At the top of the pyramid of an educational system stand the universities. The quality of the universities is a good indication of a country’s economic growth potential.

In certain cases another element can be added to this evaluation, namely the immigration of skilled scientific and technical personnel who add to a country’s reservoir of skills. Here, too, high-quality universities play an important role, as they serve as a magnet for talented young people from abroad who come to study at these universities and frequently stay after completing their studies, contributing to the economies of their host countries.

The outstanding example of this phenomenon is the United States of America. It is a world leader in science and technology, a country that can pride itself on having some of the world’s best universities. Talented and skilled immigrants, many attracted by American universities, continually add to the large pool of home-grown talent and knowledge. One need only look at the publications of some of America’s best universities, like Harvard, MIT or Caltech, to see the large number of foreign students attending America’s best universities. This has been an important factor in spurring constant economic growth in the United States, outpacing most countries.

Israel is another outstanding example of the relation between skills in the sciences and technology among the population and economic growth. For a number of years the country’s economic growth has been linked to the development of high-tech, and a good part of foreign investment has gone to this fast-developing sector. A very substantial boost to Israel’s innate capabilities has been the large immigration from the former Soviet Union in recent years, some having already obtained much of their education there, others who continued their education in Israel. A significant part of Israeli economic growth in recent years can be credited to them.

The conclusion from this analysis is that priority must be given to allocating the country’s resources to education, especially to the universities. These budgetary allocations should be seen as investments in the country’s human infrastructure, investments that will bring large returns in future years that will benefit Israel’s entire population.

However, when looking today at the state of Israel’s universities, almost all of them suffering from severe financial problems, it seems that government budgets in recent years did not take account of the relationship between the quality of the universities and the country’s economic growth. What’s worse, one result of the universities’ poor financial situation is that many talented students who go abroad for their graduate studies do not return, and many university lecturers end up teaching and conducting research abroad. Some of Israel’s best academic talent is today in America.

It is high time that this situation be rectified. Government allocations to universities, and to research at universities, must be increased substantially. The number of universities has to be increas ed.

There is no reason for the dogmatic insistence, one that seems to be supported by the existing universities, that no new universities be established, even though Israel’s population has increased greatly since the last of the universities received recognition. A special program should be initiated to bring back the many Israeli academics currently abroad because of the lack of opportunities at Israeli universities in recent years. We need an accelerated program to raise the academic level of Israeli universities, providing budgetary incentives for academic achievements. And consideration should be given to degree courses in science and technology in English, tailored to students from abroad.

Israel can probably make no better investment at the present time. The return on the investment for the nation’s economy is certain, and it will not be long in coming.

Translate »