The State of Israel does not have a growth plan, not even for five years

This is stated by Eric Ben Hamo, former CEO of 3COM and Palm at the Ra'anana conference on the national high-tech policy. He calls for an immediate improvement of the education system and the state of the infrastructure so that in 20 years a higher proportion of the population will benefit from the success of high-tech and Israel will be one of the ten leading countries in GNP per capita

As someone who looks at the Israeli economy from the outside and cares about it, the situation is not encouraging. This is what Eric Ben Hamo, chairman and CEO of the investment fund Ben Hamo Global Ventures and former CEO of two large companies in Silicon Valley - 3COM and Palm - states in the closing session of the Ra'anana Conference on National High-Tech Policy. Ben Hamo called for the expansion of investment in education in order to put the economy on a path of balanced growth that will benefit all parts of the population and not just the high-tech decile.

Ben Hamo initiated the organization IVN (Israel Venture Network) a few years ago and serves as the chairman of the organization. IVN is a philanthropic organization that works to improve education, society and employment in Israel, and among its members is a long and distinguished line of high-tech people from Israel and the USA.

"Most American businessmen who look at Israel focus mainly on the vibrant high-tech economy, which is similar in its vitality and other characteristics to the one we live in in California. This is an economy based on innovation and risk-taking, and this is also evident in the activity of the venture capital fund industry that began in the nineties, but less than 10% of the population share in the success of high-tech. Despite the relatively low rate of participation, Israeli high-tech successfully competes against Silicon Valley, Boston, China, India and Eastern Europe. However, outside of high-tech, the traditional economy in which the majority of the public in Israel is engaged continues to exist and it has not benefited from the boom. "

"The result of the existence of two separate economies is an increase in the gap between the rich and the poor, a gap that is perhaps the largest in the OECD countries. If you peel the onion, you see that this is a country where a small part of the population participates in the labor market at all, only 55% mainly because of the Arabs and the ultra-Orthodox. This low participation rate hurts the economy and cuts the rate of growth that the economy could have grown," says Ben Hamo.

To solve the problem, Ben Hamo calls for improving both the physical and the educational infrastructure. We must invest in the education system. The entire high-tech industry depends on innovation and everyone is concerned about the constant decline in the quality of education and the inability to carry out reforms. For the past seven years, IVN has been trying to help projects in the field of education and we know the field well. Unfortunately, every attempt to reform the education system has so far failed, not because those who sat on the committees were bad people, but because it is a long-term change and the politicians don't think about the long term at all."

"Another problem related to the neglect of education is the brain drain. I have more and more Israeli friends in the US, most of them professors who have declined not because of their personal salary, which was not one of the best either, but because of the drastic cuts in research budgets. The problems continue throughout the education system from kindergartens and elementary schools through high schools to universities. We must change direction and stop the deterioration in order to influence the fate of the country."

"In addition, the government must improve the physical infrastructure. It took China a year to build a Maglev train between the Shanghai airport and the city itself. In Israel, it is impossible to build subway infrastructure in decades. It's a question of priorities. "

His father-in-law claims that it is impossible to allow things to continue in the usual Israeli mess. "The State of Israel is the only one that does not have a plan for growth. China has a plan for the next 50 years on how to become the strongest power in the world. Even a democratic and decentralized country like India has a 25-year plan. Israel does not have a plan for growth even for five years. I hope this will change. In recent years, I have been working with the Israel Technology Foundation, which developed the vision 'Israel 2028 - a vision and socio-economic strategy in a global world', a comprehensive plan for the next twenty years to achieve rapid and balanced growth and reduce social disparities. If we want to become one of the ten countries with the highest GDP per capita, we will have to raise the GDP per capita from 22 dollars in 2007 to 50 dollars within 20 years. To get there we will need an average growth of 4.5 percent per year for 20 years per capita or 6% per year in total GNP. This may not be as much as China's growth of 9-10% per year, but much more than the 2% per year on average in the last 20 years in Israel. Growth must be balanced and this can be achieved, among other things, by improving education.

Ben Hamo called for the reduction of bureaucracy that interferes with business and to conclude, Ben Hamo spoke about improving the offer of investments in the cleantech fields where the venture capital funds do not have the knowledge and experience they have gained in the high tech fields, but for Israel this is an essential field in which it can become a Power House.