RD and High Tech: Fundamental Components of the Israeli System

R&D and High Tech: Fundamental Components of the Israeli System

Despite its size , Israel has gained a good reputation in R&D and academic research (determined by the number of scientific publications per capita, Israel publishes about 1% of the world's scientific papers ^[5] ).

The country has over 1,000 R&D-based industries, including many small new start-ups and software houses which, already in 1994, accounted for over half of Israel's $15 billion in exports. The key to Israel's situation in the high-tech sector is its highly trained population; in 1993, some 20% of the employed industrial (manufacturing) work force had college degrees. The figure is even higher when the software sector is included. In fact, about nine in every 1,000 Israeli workers (all sectors) are engaged in R&D. This rises to 30 per 1,000 within the manufacturing industries. This well-trained work force triggered the entry of multinational companies to Israel.

The rapidly growing high-tech industry has the potential to grow at an even faster rate. In terms of productivity per employee, Israeli high tech still has a long way to go compared with international standards. Although output per employee in the industry is $160,000 per year, some other countries boast an output of upward of $250,000 per employee per year.