After more than two years of talks with the Technion – the Israel Institute of Technology, Hong Kong billionaire Li Ka-shing signed an agreement this week to donate $130 million from his philanthropic Li Ka Shing Foundation to the institution. The contribution is a part of a larger deal, which will have the Israeli university partner with China's Shantou University to establish a technological institute to be called Technion Guangdong Institute of Technology in Shantou, a city in China's southern Guangdong province. The new institute will be built with $147 million of Chinese funding, but will grant its graduates a Technion diploma.
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The Shantou Municipality and Guangdong provincial authorities were involved in the plan to establish the new institute together with Li's foundation. However, to push the plan forward, it needed approval from China's central government in Beijing, which Technion officials worried would be difficult to obtain due to the political situation surrounding the civil war in Syria. They feared that American military intervention in Syria would lead the Chinese government to express its displeasure by withdrawing from efforts to promote academic cooperation with an American ally – Israel. As plans for an American attack on the Syrian government for its alleged use of chemical weapons failed to materialize, academic officials at the Technion breathed a sigh of relief.
This was not the first hitch that appeared on the way. Already in May most of the details had been finalized and a deal signing seemed close. The plan then was that Technion President Prof. Peretz Lavie would join Prime Minister Benjamin Netanyahu on his state visit to China and that Li Ka-shing would come from Hong Kong to meet them and the donation and establishment of a new institute would be announced and signing ceremony held.
The announcement of such an agreement amid the wide press coverage of Netanyahu's visit to China could have served everyone's interests, including Netanyahu's. Announcing the bringing together of Chinese and Israeli brains under the aegis of a well-known Chinese philanthropist would have looked good for everyone, particularly Netanyahu, whose trip was meant to show the huge potential in further developing ties between the two countries.
However, the Chinese did not like the idea of combining the announcement of the Technion deal with the visit and it fell off the agenda. And so, the people at the Technion found themselves close to achieving the long-awaited donation but not quite there - until this past week.
The donation was well-timed, adding to what has been a list of major milestones and achievements for the Technion over the past decade. Two of the university's professors, Aaron Ciechanover and Avram Hershko won, along with University of California, Irvine Professor Irwin Rose, were awarded the Nobel Prize for Chemistry in 2004. Professor Dan Shechtman received the Nobel Prize in Chemistry in 2011. Several days after the Nobel Prize ceremony took place in Stockholm that year, New York City Mayor Michael Bloomberg held a conference announcing that the Technion in partnership with Cornell University had won a competition to build an applied engineering research institute in the city.
Despite its accomplishments, the Technion's leadership is worried about the institute's dwindling coffers. Its annual budget allotment from the government organization responsible for higher education in Israel, the Council for Higher Education, is becoming smaller as the education budget must be divided among a growing number of universities and colleges. We have lost 100 faculty positions, class sizes have grown and half of our buildings are at least 30 years old, Lavie told Haaretz. Research funding and investment required for science increases every year. The average size of investment for every faculty member who conducts experiments is $700,000 for lab and equipment. Calculate how much money I need to invest if I take in 20 of these people every year.
Several weeks ago things began to progress quickly toward a deal signing in Israel. Li timed his visit to Israel with a planned diplomatic visit by the governor of Guangdong Province Zhu Xiaodan, immediately after the Sukkot holiday and before the academic school year opens in Israel. In the end, the 85-year-old Li, Asia's richest man with a net-worth estimated at $28 billion, had a hotel booked in Tel Aviv and made a quick first visit to Israel. The people at the Technion popped open the champagne bottles in celebration. After a tour of the Technion in which Li was shown ongoing research and conversing with the university's three Nobel laureates, he returned to Tel Aviv and signed the agreement.
Lavie calls the agreement a great strategic accomplishment. The Chinese chose Israel as a model for how a modern university should look, he said. This is a strategic accomplishment not just for the Technion but for the State of Israel...He decided that he wanted an academic mentor [for Shantou University] and chose us out of 74 universities.
He added that In China they understand that without academic education the country will not develop and that they need to bring back [to China] Chinese academics who succeeded in the world. The investments in academia there are difficult to imagine, as opposed to the situation here where the government doesn't invest a thing.
This will be Li's first donation to an Israeli educational institution, although he certainly has experience in investing in Israel. In 1999, Li's company Hutchison Whampoa bought a controlling stake in the cellular company Partner Communications (which operates under the brand name Orange) and sold the company a decade later to Israeli businessman Ilan Ben-Dov for a large profit. Li's venture capital fund Horizon Ventures was one of the investors in Israeli navigation app startup Waze, which was sold several months ago to Google for $1.1 billion. Waze's executives even joined Li when he visited the Technion. Other Israeli companies Horizon has invested in include Cortica, Magisto, everything.me, hola, Wibbitz, Kaiima Bio-Agritech and its latest investment NanoSpun Technologies.
Partner's CEO and VP of Investor Relations at the time Amikam Cohen and Dan Eldar were responsible for convincing Li to take his first look at Israel at the end of '90s. After selling his stake in Partner, Li maintained his business ties with the two Israelis and appointed them executives at his company's water technology investments division Hutchison Water, which was founded with their help in 2008. Although these two Israeli executives did not initiate Li's large donation to the Technion, their longstanding fruitful ties with Li greatly contributed to his decision to choose an Israeli institution.
A source close to Li says that the foundation views the Technion as having created significant change in Israel as the first technological institution for higher learning in the country, having trained generations of engineers who changed the face of Israeli society. According to the source, the Technion's partnership with Cornell University to build a research institute in New York City was also important to Li as a demonstrated sign of confidence in the university provided after a thorough vetting by a foreign partner.
"Li understands the Technion's capabilities as well as the interesting possibility for the Israeli and Chinese economies to grow together, said the source. It's not just a research agreement, but also the establishment of an industrial park that will be a springboard for Israeli companies seeking to enter the Chinese market.
The groundwork for the donation and establishment of TGIT in Shantou began in April 2011 when the Technion's visits coordinator received an inquiry from Solina Chao, Li's right-hand woman and director of the Li Ka Shing Foundation, about arranging a joint visit to the Technion by representatives of Shantou University and the foundation.
This did not seem anything out of the ordinary for the people at the Technion. They receive close to 6,000 guests per year and many visiting foreign delegations, including delegations from China. We receive two to five Chinese delegations in a week, to the extent that we are even considering bringing aboard Chinese speakers so we won't need to communicate with the assistance of translators, says Prof. Boaz Golany, deputy president for external relations and resource development at the university. The Chinese come to tour the classes and understand the model. They are searching for innovation and entrepreneurship, which they lack. The book Start-up Nation was translated into Chinese, and they understand what it is about.
In May 2011, a delegation representing Li arrived for a two-day visit to the Technion. Several months later, in September of that year, Lavie was accompanying his wife on a business trip to Hong Kong and received an invitation to deliver a lecture at nearby Shantou University. After the lecture, he and his wife received an invitation to lunch with Li at his offices in Hong Kong, prepared by Li's personal chef. What became clear by the end of the meal was that Li wanted a part of Israel at Shantou University, of which he is a major patron.
Shantou University was founded in 1981, making it relatively young. It is not considered a leading university in China, let alone the world, but Li views it as having great potential and believes it may serve as a platform for a reform of China's educational system.
In February 2012, Chao visited Israel and gave the Technion a check for $1 million. Lavie put the money to use hiring Chinese language instructors for the university and funding scholarships for students to travel to China, among other things. From there things began to develop apace. Two delegations from the Technion went to China to visit Shantou University and got the impression that it was a young university that was managed along Western lines. Soon negotiations over the framework for cooperation between the two sides developed.
During the Technion delegation's last visit to China last July, its members received the impression that the deal was final. The provincial governor had approved the deal and the Chinese participants showed the delegation where the new institute's campus would be built.
As part of the deal, Li's foundation will donate $130 million to the Technion spread out over 10 years, earmarked to improve the Israeli university's infrastructure. The Technion will receive the first installment by the end of this year. The agreement also includes academic cooperation with Shantou University. In the first stage, until the new institute is built, students in the new program will study at the Technion. Next year, 40 Chinese students are expected to arrive at the Technion's school for international students. The Technion International School was founded in 2009 and provides instruction in English with courses identical to the university's Hebrew courses. According to a university official, the admission standards for Chinese students will be almost identical to those for Israeli students at the Technion, with some adjustments necessary for foreign students. The program's first class will study three years in Israel and finish their fourth year at the institute in China, which is expected to be ready within four years. The institute's second class will study two years in Israel and two in China. So will the classes in the following years.
In the first stage, the program will offer undergraduate degrees in civil and environmental engineering, as well as, computer sciences. There will also be joint Israeli-Chinese research in the life sciences and a center for innovation will be built in Guangdong to promote the proliferation of Israeli technologies into China.
The Technion will play a lead role in selecting faculty for the new program. We will have complete control over the process and over which faculty members are accepted, says Prof. Arnon Bentur, Technion vice president and head of the Technion International School. The recruitment of lecturers will be from Israel and we have the infrastructure and experience for it, says Bentur. When an academic staff is built up in China and proves itself, decision-making responsibility will shift to them. He estimates that about one-fifth of the program's lectures will be senior faculty from leading educational institutions from around the world, and the others will be junior academics who will be trained by the Technion. In addition, students earning advanced degrees will receive instruction both in Israel and China. There will also be an Israeli representative for every degree program who will stay in China for limited time periods.
At this stage there are no plans to have Israeli professors move to China and teach at the Chinese institute, although Bentur says Israeli lecturers who wish to work there would be welcome to do so. The Technion will, though, be an equal owner of the new school, which will operate on private basis and will charge $16,000 tuition per year. Bentur said that this was considered an acceptable sum for a private university education in China and that the new school will be established as a non-profit institute.
According to Bentur, the value this academic participation could bring to the Technion and Israel is huge. Within 10 years we will have hundreds and thousands of Chinese alumni, high-level people in leadership positions, who will be our ambassadors, he says. We already see this with the Chinese students who study today at the Technion. It could have a much greater influence than $130 million.
When asked, Bentur said he believed that one of the reasons the Chinese chose the Technion was its philosophy of tailoring academics to meet the country's needs. We are an institution that fills needs, Bentur said. For example, after natural gas was discoverred in the Middle East [off the Mediterranean coast], we understood that engineers needed to be trained in this field. Our mission is to fill the country's needs and this is the spirit absorbed by faculty members and transmitted to students...We are relevant. In my opinion this is also what brought us the project in New York.