And the PR Spin of the Week Award goes to - Shraga Brosh!
Brosh crunched some numbers and found that during the last seven years, no less than 25,000 high-tech workers abandoned Israel for jobs in the United States.
Abetted by the dog days of summer, which have sent many people in Israel's business community to seek succor in cooler climes, leading to a paucity of real news, the president of the Manufacturers Association managed to shovel a steaming-hot story to the press.
The Association's economists crunched some numbers and found that during the last seven years, no less than 25,000 high-tech workers abandoned Israel for jobs in the United States.
It is famously difficult to measure yeridah - emigration from Israel. Yet the Manufacturers Association bounded like ibexes over the obstacles, collated the data and even discovered exactly why the 25,000-plus high-tech people left. Cuts in research-and-development aid from the government for high tech, that's why.
You don't need to be an economist or even a businessman to conclude that Brosh's claim is farfetched. The cuts the Manufacturers Association leader is referring to total about $200 million a year. Brosh expects the readers of the press to believe that $200 million, which is equivalent to 1 percent of Israel's annual high-tech exports, is the reason tens of thousands of brains are draining from Israel.
Like so many manufacturers, Brosh's solutions begin and end with cash injections from the government. That's pretty astonishing, given that we're in 2007, and that more than 20 years have passed since the government began a series of reforms centered on its gradual retreat from the business sector.
In his press announcement, Brosh says that after the cutbacks to R&D support, Israel is rock bottom on the list of countries that support corporate R&D. It lags behind the likes of Poland, the Czech Republic, France and New Zealand.
What Brosh doesn't say - naturally - is that after the R&D budget cuts, Israel is still a world leader in investment in R&D as a percentage of GDP. Israel's investment in R&D a year is equivalent to 4.9 percent of gross domestic product, the highest rate in the world.
To sum up, the real economic picture is the complete opposite of what Brosh sketched. Because of the success of Israel's high tech, most investment in R&D is led by the private sector: venture capital funds, local high-tech companies and international giants.
So why are thousands of engineers, academics and other professionals leaving Israel each year? Here are some ideas, pretty simple ones actually.
Let's start with the standard of living.
Imaginary Israeli engineer Anat gets up in the morning, gulps down her coffee, leaves her flat (or house) bought for hundreds of thousands of hard-earned dollars (or more), and has to step gingerly over piles of garbage, filth and municipal infrastructure that would shame many a third-world country. She thinks longingly of the cleanliness and service quality she encountered when visiting Silicon Valley.
Or here's another theoretical scenario. Israeli economics professor Shmeel Deel goes to his office and rifles through his mail. His pay slip is there. He opens it and yet again is horrified to realize that the Tax Authority hasn't distinguished between him and the members of TheMarker 500 (the richest people in the land.) Actually, his marginal tax is 48 percent of his wage, while the really rich make most of their money from capital gains, on which tax runs at 20 percent to 25 percent.
He thinks longingly of his colleagues in London or Boston, whose gross is 50 percent higher than his, and whose taxes are so low that their net income is double his.
Brosh and his colleagues evidently don't know these things. They suggest that Israel is a paradise and all one needs to do to keep the best brains at home is for the government to subsidize high tech though grants for R&D or some other way.
What about rampant corruption? Nepotism? The high tax? The bloated public sector? The fact that in Israel the proportion of adults in the workforce is one of the lowest in the world? That fewer and fewer people work and finance with their taxes more and more people who are not working? What about that feeling that the world is brimming with opportunity for talented people, while here so much depends not on market economics or capitalism but on cronyism?
Brosh and his colleagues acknowledge none of this, at least not in press releases.
He's no exception, though. Israel's marketplace is strewn with niches in which Big Business, the unions and the social-rights organizations have more in common than otherwise.
You won't see the common elements in their press statements. Corruption, the high tax burden and the poor management in the public sector, the feeble competition in so many market niches - these have no real lobby.
There's another good reason why tens of thousands of engineers, academics and professionals have left Israel in the last few years: because they can. They have the skills to get jobs abroad.
There is of course the question of how many Israelis would love to leave but don't have the capacity to get good work abroad.
Happily, most Israeli professionals that could leave, don't, whether for reasons of Zionism, proximity to family, or because they want to raise their families in Israel. But the cultural and economic changes that globalization has brought keep eroding the anchors that tie many to Israel. That, not $200 million, is what really threatens the Israeli economy and society.
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