By the year 2000, Israel plans to complete a unique “science city” in the Carmiel area that will serve as a model for the rest of the world, according to Prof. Arieh Lavie, chief scientist for the Israel Ministry of Industry, Trade and Tourism.
This complex will be another kind of Zionist pioneering, Lavie said in a recent Interview here with the Jewish Telegraphic Agency. “Just as the kibbutz served as a social experiment as well as a means for agricultural production, our future science city will be a social experiment as well as a means for high technology industrial production.”
Lavie envisions the prototype area as populated by some 100,000 and stretching along a 70-kilometer strip north from Carmiel to Maalot, in the western Galilee. He believes this location has good potential for housing and science-based industries, such as genetic engineering, medical and educational electronics, and production of fine chemicals and pharmaceuticals.
The future “city” will not only solve economic problems, but also social problems such as integrating Arab citizens and absorption of immigrants, he believes. It will challenge Israel’s post-industrial population, as the kibbutzim attracted earlier pioneers. Larger salaries and profits from exporting sophisticated products will pay for a higher quality of life and excellent educational facilities.
TWO BASIC BUILDING BLOCKS
Lavie and Raphael Benvenisti, managing director of Israel’s Investment Authority in the Ministry of Finance, discussed the role of high technology industry in bolstering Israel’s economy. According to Benvenisti, “Israel has the two basic building blocks for the growth of high technology industries: a high percentage of academics and a concentration of research institutions.
“Forty percent of new immigrants have degrees, and a high percentage of our young people go to universities.” He says that in addition to employing a large proportion of academics, high technology industries use newly developed processes to create innovative products.
Lavie says that Israel has the largest number of academics per capita in the world, with over 10,000 scientists and 20,000 engineers. In a population of only 3.8 million, Israel boasts of seven research institutions: Technion-Israel Institute of Technology, Hebrew University, Weizmann Institute of Science, Tel Aviv University, Bar Ilan University, Ben-Gurion University of the Negev and University of Haifa.
While Lavie plans for the future “city,” he deals with current realities. He promotes research and development within industry, so that Israel can achieve economic prosperity through innovative high technology. His short term goal is to enable Israeli industries to reach an export level of $1.3 billion in sophisticated locally developed products by 1982, and $2 billion by 1986. (Such exports totaled $783 million in 1979.)
FOUR-PRONGED STRATEGY
His four-pronged strategy is: development of specific knowledge in certain fields; exploitation of Israel’s local conditions to full advantage; government incentives to encourage research and development; and international cooperation in funding such projects.
To encourage Israeli industries to develop high technology products, his office administers government subsidies for research and development, usually amounting to 50 percent of the cost. “Our only advantage and our most important natural resource is our educated manpower,” he explains. “We don’t have capital, cheap labor or energy; to compete, we have to be innovative.”
Both Lavie and Benvenisti are active in promoting cooperative ventures in high technology with other advanced countries, especially the United States. More than $20 million of joint industrial research and development projects have been signed with American companies and investors in the past year, with Lavie’s office promoting joint efforts through loans, grants and other incentives, he said.
All types of foreign involvement are encouraged, including establishment of wholly owned subsidiaries eligible for the 50 percent support offered by the government. (Results of these subsidized research and development projects are to be commercialized in Israel, unless not economically justified.)
EXAMPLES OF SUCCESS FOR HIGH TECHNOLOGY
As examples of successful high technology industries here, Benvenisti mentions the following: Dadiron, an electronics firm (communications); Israel Aircraft Industries Ltd.; Elscint Ltd., a leader in medical imaging (nuclear medicine, computerized tomography and ultrasound); Sci-Tex Corporation, which designs, manufacteres and markets computer-aided design systems for the textile and printing industries; and others. High technology industries based on raw materials for chemical fertilizers, pharmaceuticals and pesticides include Israel Chemicals Ltd., Makteshim and Teva Pharmaceutical Industries Ltd.
Israel seeks foreign involvement with its high technology industries in three ways, Benvenisti says. First, there has recently been a major effort to sell shares on the American Stock Exchange. Such companies as Elscint Laser Industries and Sci-Tex are already on the market, and several other industries are planning to issue stock in America soon.
There is also foreign ownership of Israeli corporation, with some American firms in partnership with Israeli companies. Benvenisti cites Motorola Israel Ltd., which is currently manufacturing the Matarol 2000, a computer-controlled irrigation system. In addition, foreign venture capital is used to finance research and development in Israel. At least $10 million has already been invested this way, he says.
BUSINESS VENTURES WITH FOREIGN FIRMS
A delegation of American businessmen here in February to discuss potential investment included representatives of seven corporations with over $1 billion per year turnover, according to Lavie.
This mission was sponsored by the Office of the U.S. Trade Representative, in cooperation with other U.S. government agencies, the government of Israel, and the private sector Israel-U.S. Joint Business Council. President Reagan sent his personal endorsement for the success of the trade mission.
More than 150 foreign firms currently cooperate with Israeli firms, including over 20 joint ventures. Among them are 28 “Fortune 500” corporations. A foundation created by the American and Israeli governments in 1977, the Bi-National Industrial Research and Development Foundation, is actively funding new joint projects.
The Archive of the Jewish Telegraphic Agency includes articles published from 1923 to 2008. Archive stories reflect the journalistic standards and practices of the time they were published.
