CHAPTER 3 THE HUMAN CAPITAL SHIELD
« It is an illusion to believe that the development of an advanced economic core can gradually encompass the entire economy of an underdeveloped country. The reality is that this only reinforces economic dualism. Experience shows that countries have been able to recover from almost total destruction and quickly rebuild a prosperous economy, and what characterizes these successes is not the importation of technologies but the level of education, organization, and discipline of the entire population. »
Ernst Friedrich Schumacher
« Why do foreign investors persist in trusting the Israeli economy even in a difficult geopolitical context? One answer, often cited by Shimon Peres, is linked to Israelis themselves. Foreigners do not invest in the country for its natural resources but rather for its human resources, which are much more valuable. The traits of Israelis are shaped by the conflicts and crises that mark the country’s life. The ability to be resilient and reactive in times of crisis, the reactiveness to challenges, and the pioneering spirit necessary in a country under construction are some of the skills valued by the CEOs of multinational corporations who buy Israeli companies. Henning Kagermann, former CEO of SAP, testifies to this: « Beyond a company, we bought a team, a state of mind that exists in Israel, and that is essential to the success of our company globally. »
Immigration and Cultural Diversity
At the end of the 19th century, the Jewish community in Israel was restricted and mainly consisted of Orthodox Jews, located in the holy cities of Jerusalem, Tiberias, Safed, and Hebron. Then, for a full century, the country’s history was marked by waves of immigration from all over the world, each bringing its own diversity and cultural wealth.
One of the most structured organizations of the time was the « Lovers of Zion. » Born in Russia in the 1880s thanks to Moshe Lev Lilienblum, a Jewish intellectual from Odessa, it quickly developed in Palestine. The Lovers of Zion embraced the Zionist ideology championed by Herzl because their hopes of integration in Russia were swept away by the many pogroms that occurred during these years due to a resurgence of antisemitism. The organization absorbed the small structures that shared the desire to return to Palestine. It focused mainly on helping immigration without supporting the political vocation of Zionism, out of fear that the Russian authorities would accuse it of dissent. It also established a fundraising system for the construction of organizational structures in Palestine. The Bilou, a radical organization integrated into the Lovers of Zion, helped found Petah Tikva, Rosh Pina, and Zikhron Ya’akov, three important cities today.
Faced with the influx of migrants, the Jews who already lived there (the Yishuv) quickly set up welcoming structures. From less than 100,000 at the end of the 19th century, the Jewish population, thanks to immigrants mainly from Russia, Poland, and Yemen, rose to 500,000 on the eve of World War II. Whether motivated by Zionist ideals or religion, Lovers of Zion or immigrants from the Balfour Declaration, fleeing pogroms and persecutions or survivors of the
Holocaust, Jews came from Eastern countries (Russia, Poland, Hungary, Romania,
etc.) and Western Europe (Germany, France, etc.). In the aftermath of World War II and following decolonization movements, they mainly came from the Maghreb, the Mashreq (Arab East), black Africa, India, and even Asia.
Aside from the « sabras, » whose ancestors never left the territory, Israel is a country of immigrants: the « olim. » In this melting pot, Israeli Jews represent a good part of the 130 nationalities present in Israel.
In this heterogeneous landscape, Russian immigration, following the collapse of the
USSR, occupies a special place. Very qualified upon arrival in Israel, Russian immigrants responded to the pressing demand for engineers following the development of the high-tech industry in the 1990s. This million migrants, far from slowing down the country’s economy, was an important driver of its expansion, especially due to a high proportion of scientists. The structure of the Israeli economy itself proved to be an ideal soil for them.
Coming from the long history of the Jewish people, its wanderings in the world and the knowledge it learned, Israeli cultural diversity has kept its experience of a way of life that is open and tolerant, a place where respect for differences is a guiding principle. This « melting pot » expresses itself on all levels from culinary traditions to artistic expressions.
David Harari, former President of IAI in Europe, recalls his first impressions as a new immigrant : « I wouldn’t say it was a shock, but it was still a striking cultural break. One anecdote: the first few days, I went to work in a suit and tie, it was September 1970. I was quickly made to understand that here the suit was worn occasionally, at weddings, but even then, it was not mandatory… The other moment of surprise was the secretary of our department refusing to do what I asked her to do. In France, something like that is inconceivable. The key was to adapt. Going from one form of culture to another, while making one’s expertise, qualities known. I took roughly a year to integrate into the company and have my work approach, my qualities and what I could bring, appreciated. »
Though it appears to be Western, the country is infused with a strong Middle Eastern character. The culture of transparency is omnipresent, regardless of whether it endangers the interests of a President or a Prime Minister. But this behavior is actually less impolite and more a desire for honesty and efficiency.
Israelis also show great resilience, which combined with an obsession with immediate results, is certainly the source of a rich startup scene. In fact, the ability of Israelis to react and adapt to changes in the external environment is exceptional. When the tourism market plummeted in the early 2000s, those who depended on this sector were still able to quickly reorient themselves
professionally and create new opportunities. By targeting marketing and segmenting audiences, developing a varied offering in terms of destinations, accommodation, and leisure activities, and taking into account tourists’ concerns for nature and its preservation.
Thus, the Israeli Western-Eastern legacy has led to the emergence of character traits,
modes of thought and organization that are now rooted in the collective unconscious of the nation and contribute to the success of the economy.
Respect for hierarchy is quite low. This is explained by the liberal education received at school and the integrating role of the army. Due to the absence of social barriers, an officer can be replaced by a simple soldier in combat.
Meanwhile, Israelis react to the feeling of isolation in this tiny national territory by reversing trends and adopting a « globe-trotter » mentality, both in their private and professional lives. Thus, after military service, thousands of young Israelis seeking escape travel for several months, yesterday in Europe and North America, today mainly in South America, India and Southeast Asia. This rite of passage also explains the reasons why Israeli entrepreneurs often export themselves or at least think globally.
Beyond the population living in the country, the diaspora must also be added and its role is very important. It consists of two distinct branches: the Jewish diaspora and the Israeli diaspora. Both contribute to Israeli success, but in different ways.
The Israeli diaspora is often made up of young people who leave the country to join the most reputable universities or the most competitive companies. Many of them end up in prestigious American universities or in high-tech groups in Silicon Valley. But they never forget their origins and often contribute to the radiance of the Hebrew state wherever they are. Obviously, this brain drain is a bit worrying in the short term and raises much discussion. But in the long run, many of them return to Israel and bring their country the extremely enriching experience gained abroad.
As for the Jewish diaspora, although its members have different cultural origins, it shows a particular attachment to Israel. The diaspora is often the most faithful support and sometimes the only unconditional ally of the state, providing financial support but also moral and political support. This dedication is sometimes expressed through lobbying in political circles, such as AIPAC in the United States, or CRIF in France. Jews in the diaspora also finance many associative projects in Israel and invest in its economy.
The specific relationship to books and knowledge
The importance of education in the Jewish state comes not only from the need to rely on the « knowledge capital » of the entire population, but also from the great traditions of Judaism. The Jewish religion indeed gives it an important place. Professor Alain Michel, former Yad Vashem rabbi and historian, explains its significance: « When one goes back as far as possible in the time of rabbinic Judaism, one realizes that education is very important. Many texts link the history of the Jewish people to education. One can thus see that there was not a child who did not know how to read. In the Talmud, we see a difference between the literate and the popular environments, not in a negative sense, but in its most generic sense: the people of the earth, the farmers. »
The book has penetrated all stratas of society because of its centrality in Judaism. Within the Diaspora, 100% of the community could read. The discovery of old copies of the Torah written in large letters in synagogues proves this: in order for everyone to follow the service, the characters were large. Another detail from a Polish synagogue supports this idea: the words of the central prayer, the Amida, were written on the walls of the room. In earlier times, the Babylonian rabbis organized one to two large study sessions per year, and between 500 and 1,000 people attended. The rabbis organized these sessions in the spring and autumn for a very simple reason: at that time the farmers had finished their field work and could come to participate in the studies. The testimonies also affirm that these sessions were a great success among the farming populations.
In Poland, the first phases of a cultural revolution were initiated, allowing women access to Judaism. A book was written specifically for women, and the ultra-religious eventually accepted the creation of schools for women. This led to a higher level of education in the Jewish communities of the Diaspora, often making them more « cultivated » than the host populations.
A fundamental aspect of Israeli education is that citizens can improve their knowledge at any age, so there is no cut-off. The Hebrew University of Jerusalem has opened a section in which students are accepted based on their good results on psychometric tests, even if they did not obtain a high school diploma. They can then start their higher education while having the possibility to catch up on their high school grades. This opportunity also exists within the army. This is a concept intrinsically linked to the centrality of education.
Even before the creation of the state in 1948, leaders have emphasized education as a key value for the future. Education is a valuable legacy, a fundamental notion in Israeli society. In 1934, the Technion, the Hebrew University of Jerusalem, and the Weizmann Institute already existed. Although there has been a certain disengagement from the executive in the social sphere in recent years, the state still has a firm grip on educational programs. The system is driven by a desire to develop the population’s abilities.
The pioneers of the Israeli project established four specific tasks to be achieved: (1) encourage « systematic establishment » of Jewish farmers, peasants, and artisans in Palestine governed by the Turks (Israel at the time represents a tiny part of the Ottoman Empire); (2) « organize and unify » the Jewish people through organizations worldwide, openly and without breaking the laws; (3) strengthen the national consciousness and feeling of Jews; and (4) act to gather support from governments.
In this perspective, the Alliance Israélite Universelle, created in 1860 to fight anti-Jewish hatred, made a name for itself in the field of education. It developed a school network aimed at « modernizing » Jews of the East to allow their emancipation. Marc Eisenberg, the current president of the Alliance, declares as follows: « The values of the Alliance are to teach the values of Judaism to children in an open, tolerant, generous and modern manner. » According to its president, the institution follows the principle that « particularism is a means and universalism is an end. »
After the creation of the state in 1948, the Alliance opened popular schools in Jerusalem, Haifa, Tiberias and Tel Aviv, as well as a school for the deaf. In 1950, these schools and Mikve-Israel became the responsibility of the Israeli Ministry of Education, but the Alliance still funds these educational institutions. In Israel today there are half a million people who are former students of the Alliance.
Figure 3.1: Mikve Israel High School in 1870.
In 1906, the first Hebrew high school was created in Herzliya, north of Tel Aviv, so that all new immigrants could communicate. The language in which the Jewish nation would reconstitute its unity, modern Hebrew, had been advocated, thought about, developed and disseminated in the meantime by a committed Zionist, Eliezer Ben-Yehuda. He was from Belarus and an active witness to the language challenges in the land of Israel between French, English and German, and Sephardic Hebrew. This new nation and this dream of a state was to have a national language capable of unifying the exiles of the Diaspora in their project.
Figure 3.2: Herzliya Hebrew High School.
In 1906, alongside the creation of the first Hebrew high school, the Bezalel Institute was founded by Professor Boris Schatz, one of the founding fathers of the Royal Academy of Art in Sofia, Bulgaria. Its name refers to the artisan who was tasked with constructing the Tabernacle in the Bible, which housed the Ark of the Covenant containing the commandments.
The Bezalel Institute aimed to « train Jerusalemites in the arts and crafts, consolidate original Jewish art, and find a visual expression that could create a synthesis between European artistic traditions and Eastern European Jewish traditions, as well as integrate it into the local culture of the Land of Israel. » It experienced ups and downs, including being forced to close its doors during both World Wars, before experiencing significant growth.
Today it is a partner of the Hebrew University of Jerusalem. Since 1952, it has been co-funded by the government and was awarded the title of “Academy of Fine Arts and Design” in 1969. Thanks to its quality teaching and renowned professors, it has become internationally known, attracting American students as well.
In 1929, during its 16th Congress, the World Zionist Organization created the Jewish Agency for Israel in Palestine under the British mandate (the defeat of the Ottoman Empire in World War I led to a redistribution of its territory geographical areas between France and the United Kingdom).
At the same time, universities were created that are today among the best in the country. The prestigious Hebrew University of Jerusalem (built on Mount Scopus to the northeast of the Old City, in Jerusalem), opened its doors on April 1, 1925, during a ceremony attended by eminent scholars, leaders of the Jewish communities of the Yishouv, and British dignitaries, including Lord Balfour, Albert Einstein, Sigmund Freud, and James de Rothschild participated in the first board of governors of the University.
Although it only had three research institutes at the time of its opening and only 141 students, by 1947 it had become a renowned institution, counting more than 1,000 students. The 1948 independence war isolated the campus, but alternative solutions were implemented: construction of the Givat Ram campus to the east of the Old City began in 1953.
A few years later, the life sciences campus was developed in the southwest of Jerusalem, in partnership with Hadassah Hospital in Ein Kerem. In 1981, the Mount Scopus University regained its importance and has continued to grow ever since.
Organisation of the Education System
The Israeli educational system was unified in 1953 by the National Education Law. It is funded by the state – except for independent schools and private schools – and school is mandatory for eleven years for all children aged 5 to 15. Reforms are currently trying to extend the period of compulsory education to twelve or thirteen years, leading students to stay in education until at least 16 years of age. The state allocates around 8% of its budget to education funding, a rate that the top performing countries of the OECD sometimes struggle to reach.
According to Denis Charbit, a professor of political science at the Open University of Tel
Aviv, « The country fulfills the two essential functions in education, which are first of all to offer knowledge and to accompany its learning (mathematics, writing, reading, history, geography, etc.), but also to promote identity. It should also strive for universality while forming the individual, through socialization and sensitivity to belonging. National Education must be driven by this dual mission. »
The system must also be attentive to its students and be able to identify very good students: « At the Open University of Tel Aviv, there is a special program for high school students who have not yet received their high school diploma: a 16-year-old was able to obtain a mathematics degree. However, those responsible for this program ensure that the teenagers submitting a file do so of their own will in order not to handicap the student, who could end up hating higher
education, and more broadly competition. It is also the responsibility of the state to identify talented students very early on.
On this point, it seems that National Education is fulfilling its duties by showing a certain sensitivity to excellence. At several stages of their schooling, children take selection tests. There is a real attachment to the individual subject. Nevertheless, this does not seem to exist in the Arab sector.
New generations are indeed increasingly obtaining diplomas, increasing the proportion of 25 to 34 year-olds with A or B level qualifications to 42%. This rate reaches 40% for subjects aged 45 to 54. The secular public system has set itself the mission not only of educating citizens, but also of preparing them for working life. As Julia Resnik, a professor at the Hebrew University of
Jerusalem, explains, the country is working to create « national subjects » in the education system through a certain « curriculum ». Teachers raise awareness among children about the theme « A nation with a right to a state », then « A nation by right of religion », then « A state for a persecuted nation » and finally « A state for all its citizens. »
The main subjects of these themes are the study of the Bible, history and literature. The Ministry of Education encourages extracurricular activities. All these methods have contributed to making young children true citizens, concerned about the future of their country and particularly imbued with both the history of the state and the Jewish religion.
The Technion
Laurent Zecchini of the newspaper Le Monde mentioned the Technion (www.technion.ac.il) as follows: « The Technion campus is located on one of the hills that overlook Haifa Bay. At the foot of one of these hills, Mount Carmel, lies the Silicon Valley of Israel: the high-tech park of Matam associates Israeli start-ups with all the big American names, such as Microsoft, Intel, Google, Yahoo and IBM. It is in this incubator that the Technion finds its energy and students find opportunities. The recipe that has allowed the oldest university in Israel to acquire its reputation for excellence remains uncertain. »
Figure 3.3: Aerial view of the Technion campus.
The Technion is a renowned institution of higher education and research located in Haifa, Israel. It is known for producing highly skilled engineers and producing groundbreaking research in areas such as defense, computer science, medicine, nanotechnology, electrical and civil engineering, mechanics, management and architecture. 75% of Israeli engineers, 70% of start-up founders and leaders, and many world-renowned discoveries such as the Rasagiline, a treatment for Parkinson’s disease, a new method of environmentally friendly electricity production and desalination, recognized expertise in microsatellites, etc. come from the Technion. With departments grouped into five faculties, including mathematics and computer science, physics, chemistry, biochemistry and biology, students have a wide range of options to choose from.
One of the keys to Technion’s success is revealed by Benjamin Soffer, a technology transfer specialist. « Twenty years ago, » he says, « the heroes of Israeli society were generals, today they are entrepreneurs. »
The results are there. If 50% of Israeli exports are concentrated in the field of high technology, it is because there is the largest concentration of high-tech companies outside of Silicon Valley in Israel. There is another, more political reason: beyond the priority given to research and development, Israel’s isolation in the Middle East makes it difficult to trade with its neighbors and pushes it to look beyond its borders, especially to the United States, to form partnerships.
It also looks to Europe, as demonstrated by Muriel Touaty, ex-director of Technion France: « The Technion has not only acquired its letters of nobility in France, but it has also become a strategic and undeniable interlocutor for cooperation with industry and the political and institutional world where impressive networking has been done. Over a hundred cooperation agreements with French industry have been signed in the fields of water, energy, biotechnology and medicine. In the academic field, all of France is covered: CNRS, INSERM, all universities and the Grandes Écoles and notably ParisTech. »
The Technion’s story began in Switzerland, in Basel, in 1901, at the fifth Zionist Congress. The decision to create a Jewish university in the heart of the Ottoman Empire was not obvious, but the first stone of this « institute for technical studies » was laid in April 1912, nearly a century ago, in a place chosen by David Ben Gurion, in the heart of the Carmel forest. its founding fathers. To a large extent, the Technion served as a melting pot for the Israeli army, which drew its specialists from it for decades. This reciprocal influence continues to play a major role in the success of Israel’s first scientific and technological university, which is also the country’s largest center of applied research. Israel sends its students to university late, after they have completed their military service. Paradoxically, this is what creates the strength of the Technion.
Figure 3.4: Inauguration of the Technion by Albert Einstein, 1924.
The Technion campus can compete with those of the Massachusetts Institute of Technology (MIT) and Stanford, which Technion students often compare themselves to, except that it is a closed space of 121 hectares, under high surveillance.
Peretz Lavie, ex-President of Technion, had the opportunity to revisit the Israeli innovation model and the major role of Technion in this field.
Israel is a start-up nation. In recent years, Israel has become an innovation and start-up empire. I often ask myself: what makes us, Israelis, so brilliant in the field of innovation, start-ups, and creating new technologies? There is not a single factor but multiple.
There is something to do with the Israeli mindset, the Israeli nature: being a performing person, feeling a need for accomplishment. There is a study showing a correlation in a country between respect for hierarchy and the potential for innovation of the youth. In many countries where a sense of hierarchy is important, for example, when students are surprised to ask a question in class or talk to a professor individually, in these countries, there will be a low potential for innovation. Israelis, with « chutzpah, » the lack of formality, and sometimes even a lack of respect for authority, have a profile, a type of character that is much more innovative.
The military service shapes personality. An 18 or 19-year-old young man will find himself responsible for equipment worth several million dollars. When such a person starts a company, he will not be disturbed by numbers, by taking risks, or making decisions that will sometimes be negligible compared to those he made in the army.
However, I believe that the quality of the education system is the most important factor. I think that the Technion, with its reputation and quality of education, is the source of many start-ups. A survey conducted a few years ago among Israeli companies listed on Nasdaq showed that 70% of them had a Technion graduate occupying one of the three highest positions. The Technion is the backbone of the high-tech sector in Israel. There are no other foreign examples of a university that has such a contribution to its country’s economy. The challenge is how we sustain this situation.
We need partnerships. During the 1960s, the Technion Microelectronics Institute paved the way for the entire high-tech sector. Nanosciences, which are now the new keys, have had significant industrial applications. We started nano-programs seven years ago and there are already 36 companies using and developing nanotechnologies.
We need new ideas, so we need fundamental research, which is the key to the future of the industry. In the past five years, we have had four Nobel Prizes, three in chemistry and one in economics. When compared to the population, there is no precedent. But more significant is the comparison with the budget invested in fundamental research. I don’t think there’s a single country in the world that invests so little in fundamental research and gets so many Nobel Prizes in five years. The total budget for the Israeli Scientific Foundation (ISF) is 83 million dollars. This is the budget of a very small university in the US and it is nothing compared to our European counterparts. Furthermore, we must convince the government of the necessity of investing in fundamental research.
The Technion, and I say this with great pride, is an excellent institute, whether in terms of students or professors. We do not compromise on quality, which we have maintained for many years. I just met young professors who have joined the Technion, and I believe that the next generation of teachers and researchers will even be better than the previous one. So we must strive to maintain the standing of one of the world’s best technology institutes.
I will give you a few more examples besides this capsule we swallow, developed by a student from the Technion School of Electronic Engineering. The USB key and the first instant messaging system also have a Technion graduate as their designer. Each of us uses Adobe Acrobat and any form of data compression. Without the work of Jacob Ziv from the School of Electronic Engineering and Abraham Lempel from the School of Computer Science at Technion, the entire sector would not have been developed. The work of Professor Itzkovich and Stem Cells, whose applications are used in laboratories around the world, must also be mentioned.
Gustave Leven, following in the glorious footsteps of his grandfather, Narcisse Leven, a young lawyer who in 1860 founded the Alliance israélite universelle with a few friends, established in 1984 what has become the Rashi Foundation today. Chaired by Hubert Leven, the foundation is one of the most important philanthropic institutions in Israel. Its mission is to help people, with a particular emphasis on the young generation and disadvantaged populations by providing answers in the social and educational fields. The ongoing fight for schools and students and for improving medical care and promoting their accessibility to disadvantaged or peripheral populations is at the heart of the action taken by the Rashi Foundation.
Michael Bensadoun, former director of the Gvahim association, explains the essential role that this type of organization,, can play in supporting future young talents from immigration in this case: « The Gvahim project (“summits” in English) was founded in 2006 by the Rashi Foundation and a group of personalities from the Israeli economic world. Gvahim’s mission for years has been to allow new, highly educated immigrants from all over the world to achieve their professional goals in Israel and to provide them with the necessary support for the success of their Aliyah. »
Adapting to cultural differences, adjusting skills to an unknown job market, overcoming the obstacle posed by the lack of social networks, these are the challenges faced by new immigrants upon their arrival in Israel. To address these obstacles, Gvahim offers work sessions and workshops that provide new arrivals with the essential tools and information for their professional integration. Gvahim also allows each participant to receive individual support from Israeli human resources and professional advisors who help them define their professional project and set their career goals. Finally, the establishment of professional networks by sector, bringing together more than 2,000 members, promotes the exchange of contacts and networking.
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