Becoming one of the 15 Most Developed

Nations8th Herzliya Conference

January 2008

Mobility of Resources

Investments

Human Capital

Technology

Countries Compete

The Competitive ApproachThe Competitive Approach

Israel is Growing but not Israel is Growing but not LeapfroggingLeapfrogging

Israel

Ireland

South Korea

0.

2.

4.

6.

8

Inco

me

Per

Cap

ita

Rel

ativ

e to

US

USA = 1

Western Europe

1950 1960 1970 1980 1990 2000 2007

Leaping into the Top 15Leaping into the Top 15

Israel

Austria

Portugal

Hong Kong

JapanHolland

New Zealand

Canada

USA

Finland

Singapore

Spain

Denmark

Italy

Iceland

AustraliaSweden

Norway

Switzerland

Ireland

Luxembourg

$15K

$20K

$25K

$30K

$35K

$40K

$45K

$50K

$55K

6.250 6.500 6.750 7.000 7.250 7.500 7.750 8.000 8.250 8.500

Quality of Life

Inc

om

e p

er

Ca

pit

a

15ישראל

Economist Quality of Life Index - 2005

Growth Leapfrog

Leapfrogging Differs from Leapfrogging Differs from GrowthGrowth

3% is good At least 6%

Incremental changes in products/exports

Requires leadership, vision and carrying capacity

Competitive comparisonTime-based comparison

Sharp changes in product/export composition

Collaborative vision not necessary

Recipes exist

Does not narrow gaps

No single formula

Narrows gaps

Sophistication Now = Leapfrog Sophistication Now = Leapfrog TomorrowTomorrow

MDG

PRY

BGD

JAM

ECU

BOL LCA

LKA

COL

HTI

PER

KEN

IDN

BLZ

CHL

DZASAU

OMNTUR

TTO

IND

GRC

ROM

THA

CYP

CHN

HRV

PRT

MYS

BRA

HUN

AUS

MEX

ESP

KOR

NZL

SGP

NLD

CANUSADNKSWE

DEU

IRL

FINISL

CHE

Product Complexity in 1992

GD

P G

row

th 1

992-

2004

Hausmann et. al., “The Product Space”

Vision

Design, Management and Execution of Policy

Public Sphere

EnginesUnique Challenges and Opportunities

Public Discourse

Indicators

Commonalities of Countries that Commonalities of Countries that LeaptLeapt

8Competitiveness of the private sector

29Competitiveness of the public sector

Israel’s Economic Problem is Israel’s Economic Problem is GovernanceGovernance

Worker productivity

Labor force participation rate

R&D

Human capital

No mid-tech

10

1

35

Rank:Rank:

3

Trust

Public/Private Cooperation & Trust: Public/Private Cooperation & Trust: RequiredRequired

Private Sector

Investment

Public Sector

Legislation and Infrastructure

IsraelIsrael1515: National Obsession: National Obsession

Leapfrog

Aliyah

Making the Desert Bloom

Redeeming the Land

ישראלישראל1515

Reut Website Conference Booklet

Becoming one of the 15 Most Developed Nations