Public sector holds back Israel

James Riley
Editorial Director

As incredible as it sounds for a country as successful in the startup sector as Israel, the country’s low productivity and the slow uptake of technology by government is putting a drag on its economy.

According to a report published by Google Israel, the country’s public sector does not nearly match the rest of the country in innovation. And public policy efforts to bring the country’s relatively low productivity levels in the broader economy to match OECD countries have stalled.

The study, prepared for Google by research and consulting house Trigger-Foresight and reported by the Haaretz newspaper, said a backwards public sector was causing Israel to fall behind the rest of the world in the uptake of new technology.

“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,” the Trigger-Foresight report 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,” saying the slow uptake of technology was a drag on the rest of the economy.

The report said low productivity in Israel was a problem. The country ranks 24th for productivity among 34 OECD countries. While it had previously made productivity improvement a priority to close the productivity gap with the OECD, that effort had stalled.

It pointed to a failure by the Israeli Government to bring technology into education. It says a 1998 program which brought computers into schools had failed to provide adequate teach training, or to adjust curriculum to the ICT reality. The result has been that that computerisation in schools had been on par with the OECD nations in 1998, but by 2006 had fallen far behind.

These are all themes that very familiar to policy-makers in Australia. In this country, productivity flat-lined after 2000, made modest improvements in the later years of the noughts, but have tanked in the past three years.

And we are having the same discussions about technology in schools – and developing curriculum to go with it – as part of a program to improve productivity growth.

In Israel, Trigger-Foresight concludes that the productivity gap with the OECD nations can only occur through the adoption of technology and innovation through a long-term national program to promote ICT.

It also recommends that the country adopt a national plan that is put into action by a single, cross-portfolio, inter-sector body.

“The countries ranking highest for innovation and use of information and communication technology invest much effort in advancing them,” Trigger-Foresight 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.”

“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.”

There is nothing in these actions that would not make the same sense for the Australian situation. These are generic goals and responses.

In Australia productivity is certainly on the national agenda – we know this because the Prime Minister is sitting down this week with the Business Council of Australia and the union leadership.

The ICT sector is not a part of the conversation. We are nowhere.

Do you know more? Contact James Riley via Email.

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