Wind-Down Nation?

November 30, 2009

Social Sciences & Humanities

Ask my wife — every week I come up with one sure-fire, world-changing, patent-worthy invention. My latest is an iPhone app that will tell me a person’s name when I hold the phone up to his or her face.

Of course none of these inventions make it past the I-tell-her-and-she-rolls-her-eyes stage. The difference between me, a wannabe inventor, and a real high-tech entrepreneur is I don’t know the first thing about technology. The difference, in a word, is education.

“Start-up Nation: The Story of Israel’s Economic Miracle,” by Dan Senor and Saul Singer, published this year by the Council on Foreign Relations, is burning up the Zionist bestseller lists. The book documents how Israel, a country the size of Delaware with the population of a large city, has become such a high-tech juggernaut.

Israel boasts the highest density of start-ups in the world, more Israeli companies are listed on the NASDAQ exchange than companies from the entire European continent, and, in 2008, per capita venture capital investment in Israel was 2.5 times greater than in the United States, 30 times greater than in Europe and 80 times greater than in China.

After the United States, Google CEO Eric Schmidt told the book’s authors, Israel is the best country for entrepreneurs.

What “Start-up Nation” shows is that Israel’s economic miracle is no accident. Many qualities unique to the Jewish state account for its entrepreneurial prowess — not least among them the pioneering ethos and the sacrifice, ingenuity and camaraderie demanded by army service.

But a fundamental building block of success is education, specifically a great university system. Israel has eight universities and 27 colleges, four in the world’s top 150 universities and seven in the top 100 Asia Pacific institutions. These are the engines that churn out Israel’s technological miracles.

And the engines are in trouble.

“What we are harvesting now was planted 30 years ago,” Rivka Carmi, president of Ben-Gurion University of the Negev (BGU), told me during a visit to Los Angeles last month. “I’m pessimistic about what will happen 15 years from now, with huge cuts in higher education.”

Israel has decreased the funding to its universities — in BGU’s case by 6 percent — leaving administrators like Carmi scrambling.

In Israel, the state pays for salaries and operating expenses, but development and expansion must come from additional monies raised. And Israelis have not developed a culture of alumni giving.

“If I said we get $20,000 a year from alumni, I’d probably be exaggerating,” Carmi said.

Meanwhile, in this economy, pledges from supporters outside Israel are down 50 percent. Carmi worries that Israel, by not making education funding a bigger priority, will lose its best and brightest.

For her part, Carmi said despite the cuts she won’t touch the scholarships for top students, or funding for research into water, information and solar technologies — areas on which her university’s — and Israel’s — future rests.

“But,” she said, “I’m pessimistic.”

Carmi’s foremost concern may be her students, but Israeli leaders should know that something else is riding on Israel’s high-tech achievement: American Jewish support.

The popularity of “Start-up Nation,” the constant Diaspora emphasis on Israel’s economic miracles, point to an underlying reason for Israel’s strong support among American Jews — its achievements. We have taken to Israel like a Jewish parent to a bright child. Don’t underestimate the power of kvell.

Were Israel’s students’ test scores to drop, its gush of high-tech wonders to dry up, its innovative businesses to shutter or move abroad, its creative talent to resettle in the Palisades orParis, the American Jewish relationship to Israel would more than likely cool.

There are practical reasons for this — many wealthy American Jews’ strongest ties to Israel are through investment and business relationships.

But there are also psychological reasons — for all the care and support Israel requires, it had better be special. On every pro-Israel supporter’s car there’s an unwritten bumper sticker: My Other Country Is An Honor Student.

Last week, another top Israeli educator came through town. Fifteen years ago, professor Uriel Reichman founded the Interdisciplinary Center (IDC) in Herzliya as Israel’s first truly private university. (Some 70 percent of its donations came from the country’s own successful entrepreneurs.)

In that short time, the IDC has become a world-class center for research and teaching in a variety of topics, including counterterrorism.

At a private breakfast in Beverly Hills, Reichman said Israel must act like the seafaring nations of the past, whose ships sailed all over the world but whose profits came back home. To succeed at this, Reichman said, Israel has no choice but to dedicate itself to education.

“In the long run, that will determine our future,” he said. “Our minds are the only resources we have.”

Government subsidy alone is not the answer, Reichman said. “It kills initiative.” He said Israel should adopt a “mixed model” to finance higher education — private funding, student loans, research grants — while using government funds and other resources to improve public education at the elementary and high school levels.

Carmi and Reichman may disagree on the exact role government should play in saving Israel’s education system, but both agree the situation is critical to keep the Start-Up Nation from winding down.