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Tuesday, January 12, 2010

Smart Jews

In the New York Times, David Brooks writes of the shift in Israel from fighting and politics to technology and commerce.
The odd thing is that Israel has not traditionally been strongest where the Jews in the Diaspora were strongest. Instead of research and commerce, Israelis were forced to devote their energies to fighting and politics.

Milton Friedman used to joke that Israel disproved every Jewish stereotype. People used to think Jews were good cooks, good economic managers and bad soldiers; Israel proved them wrong.

But that has changed. Benjamin Netanyahu’s economic reforms, the arrival of a million Russian immigrants and the stagnation of the peace process have produced a historic shift. The most resourceful Israelis are going into technology and commerce, not politics. This has had a desultory effect on the nation’s public life, but an invigorating one on its economy.

Tel Aviv has become one of the world’s foremost entrepreneurial hot spots. Israel has more high-tech start-ups per capita than any other nation on earth, by far. It leads the world in civilian research-and-development spending per capita. It ranks second behind the U.S. in the number of companies listed on the Nasdaq. Israel, with seven million people, attracts as much venture capital as France and Germany combined.

As Dan Senor and Saul Singer write in “Start-Up Nation: The Story of Israel’s Economic Miracle,” Israel now has a classic innovation cluster, a place where tech obsessives work in close proximity and feed off each other’s ideas.

Because of the strength of the economy, Israel has weathered the global recession reasonably well. The government did not have to bail out its banks or set off an explosion in short-term spending. Instead, it used the crisis to solidify the economy’s long-term future by investing in research and development and infrastructure, raising some consumption taxes, promising to cut other taxes in the medium to long term. Analysts at Barclays write that Israel is “the strongest recovery story” in Europe, the Middle East and Africa.

Israel’s technological success is the fruition of the Zionist dream. The country was not founded so stray settlers could sit among thousands of angry Palestinians in Hebron. It was founded so Jews would have a safe place to come together and create things for the world.

This shift in the Israeli identity has long-term implications. Netanyahu preaches the optimistic view: that Israel will become the Hong Kong of the Middle East, with economic benefits spilling over into the Arab world. And, in fact, there are strands of evidence to support that view in places like the West Bank and Jordan.

But it’s more likely that Israel’s economic leap forward will widen the gap between it and its neighbors. All the countries in the region talk about encouraging innovation. Some oil-rich states spend billions trying to build science centers. But places like Silicon Valley and Tel Aviv are created by a confluence of cultural forces, not money. The surrounding nations do not have the tradition of free intellectual exchange and technical creativity.

For example, between 1980 and 2000, Egyptians registered 77 patents in the U.S. Saudis registered 171. Israelis registered 7,652.
Brooks discounts the role that military necessity has played in forcing Israel to develop technologies that have military applications. In other words, he commits the opposite error of Senor and Singer's Start-Up Nation (which I still haven't read - the publisher hasn't come through on a review copy yet), which over-emphasizes the army's role in technological innovation.

But Brooks is still an interesting read with a lot of great statistics about Israel and Jews that you can all use at cocktail parties. Read the whole thing.


At 12:15 AM, Blogger Unknown said...

With an Iranian threat the Israelis can still work remotely and still control their land. The amazing thing about smarts, which is something I think Brooks might not have, is that you can be anywhere, through social networks (and no I don't mean facebook and twitter, I mean real social networks like Judaism) keep you together. Israel is just about security, but even with the loss of security Jews can still innovate... and always will.

At 12:23 AM, Blogger nomatter said...

"Brooks discounts the role that military necessity has played in forcing Israel to develop technologies that have military applications."

Of course! If he wrote about necessities in military technology applications he would have to concede WHY. When it comes to Israel why would a true picture be painted? It seldom is.

At 12:24 AM, Blogger NormanF said...

Israel's most important asset is its human capital. While the Arabs waste theirs, Israel uses its own to its maximum advantage. The Arab World is locked into an old, self-destructive way of doing things. Israel is looking ahead to a bright future. Jews may not be smart politicians but they are good at learning from their mistakes and putting knowledge to good use. That's the most important story of the 21st Century missed by the anti-Israel crowd.

At 3:02 AM, Blogger Unknown said...

Too bad you have to cheat:

"The whole history of American Jewry is a tribute to the power of Jewish nepotism. Indeed, nepotism has been a positive and wholesome force in Jewish life for thousands of years. It is high time to acknowledge and even celebrate this fact instead of trying to keep it hidden like a shameful family secret."



At 6:56 AM, Blogger Unknown said...

Perusing the readers' comments on the Brooks article makes you realize the intellectual depravity of the NYT readers. THe idea of Jewish success in their minds must be explained by land theft and oppression of "indigenous palestinians". success must be stolen in their minds, not something created by hard work. this is the same crowd that supports obama is his plans for wealth redistribution.


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