Israel is basing its progress and prosperity on human capital (quality manpower) and unique knowledge. The outstanding expression of this is the development of an industry based on advance knowledge which in the last decade led Israel to an impressive average economic growth of 5%, of which 30% stem from high-tech industry (1). In spite of the recession in recent months forecast predict that the growth will continue in the intermediate and long range period.
Development of this kind is the outcome of a variety of processes which took place during this period and before, part of them target oriented processes. A central component in these processes is the advancement of R&D which created an impressive infrastructure of knowledge. This knowledge was translated into a variety of technologies with economic potential that were developed and applied by skilled manpower.
In the dynamic and competitive world we live in big and ongoing investment in R&D infrastructure is needed if we want to preserve Israel’s position, not to mention its advancement beyond the present situation. In this context, the news that investments in R&D in Israel in the year 2000 reached 4.1% of the GDP, stirred quite a lot of excitement. This is one of the highest investments rates in the world, if not the highest among the developed countries. There is a tendency, that on the face of it seems justified and logical, to see in this high investment rate a testimony to a correct policy in the area of R&D.
However, in order to examine in depth the national policy for investment in R&D one must take into consideration not only the overall investment but also its distribution among the different sectors and activities. In the framework of this position paper data will be presented on the distribution of investments in R&D together with an analysis of significances, based on a change in trends during recent years and in comparison with other countries. Analysis of the data, as shown later on, compares what is happening in Israel with what is happening in Finland and OECD countries for reasons to be given later.
The aim of this analysis is to raise issues of national R&D policy that in relating to it one also needs a quantitative point of view on investments in R&D and their meaning.
It is appropriate to emphasize that this analysis relates only to investments in civilian R&D, data of which is available to the public at large. There is no doubt that the defense R&D had an influence on the civilian sector too, thanks to the spillover of know-how and manpower that acquired its skill in the framework of the defense R&D. An in depth treatment of this aspect is impossible in the framework of the present position paper, and reference to it will be indirect.
