Is the Israeli Government Taking Its High-tech Aspirations Too Far?

A proposal for a new national initiative dubbed 'Digital Israel' viewed by critics as superfluous.

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Israel’s high-technology startups are known worldwide for their cutting-edge innovation, but much of the rest of the economy is a digital dunce. But now the government is determined to catch up. A proposal for a new national initiative dubbed “Digital Israel” will be submitted to the cabinet next Sunday that will establish a steering committee in the Prime Minister’s Office to lead in promoting digital services in the civil service, and in aiding the public in education, healthcare, social services and other areas.

The initiative goes beyond government to encompass plans to encourage the use of high-tech in small and medium-sized businesses, online commerce, the sharing of government information and knowledge, and in cutting red tape.

The Finance Ministry, however, opposes the move, claiming that the authority of the new body will overlap with that of the Government Computing Center operating under its own auspices.

Carmela Avner became head of the center on being named the government’s first-ever chief information officer in February 2012. The center’s role was defined as streamlining government work in the field of computing and improving cooperation between government offices and with other public bodies, with the aim of improving services to the public.

“I don’t understand why there is a need to establish a new body. There is nothing here that doesn’t exist today,” Michael Eitan, former minister for improvement of government services, who originally proposed the formation of the computing center, told TheMarker.

Among the objectives cited by the proposal’s authors are bringing the education system into the 21st century, making electronic medical records accessible to patients, bringing small businesses and traditional industries the newest technology, and establishing cloud services to promote the use of technology by the government and business sectors. The proposal recommends setting up a national program with planning and implementation concentrated in the hands of a single authoritative entity. The proposal paper titled “The National Digital Israel Project” calls for improving the telecommunications infrastructure, but this comes second to the goal of boosting digital literacy and expanding advanced services. The document treats the public sector as both a service provider to the citizen and a major customer in the market.

Lagging behind

Israel may be Startup Nation, but it only ranks 16th in the world in adopting information and communication technologies in its public services, according to the United Nations. A newly released report by the OECD (Organization for Economic Cooperation and Development) places Israel 27th among 30 in the rate of use of online services for communicating with government bodies and submitting forms online, with just 30% of the population availing themselves of the services, compared to the 50% average for OECD countries. Among Scandinavian countries, the rate reaches 70% to 86%. Access to the Internet is lower in Israel than the average for developed countries, according to earlier OECD reports, and Israel ranks much lower than average in household use of technology.

The project also aims to advance a range of economic and social objectives. “National digital policy is designed to realize the government’s strategic goals such as economic growth, boosting social welfare, and reducing social gaps through the intelligent use of information and communication technology,” according to the proposal.

The catalyst for introducing the initiative right now, it says, is the fiber-optic project to provide the infrastructure for fast Internet connections and open up a whole world of digital applications that is being developed on the Israel Electric Corporation’s power network. “This infrastructure creates the opportunity for a quantum leap in digital services in both the public and business sectors,” its authors maintain.

The driving force behind the Digital Israel initiative and the proposal for the past six months has been Eden Bar-Tal, a former director general at the Communications Ministry. “For Israel to lead OECD countries from a digital perspective it needs to capitalize on the new world of information, particularly the cloud revolution, the exponential power of ultra-fast infrastructures arising in Israel, and the exponential power of Israeli R&D capabilities,” explains Bar-Tal.

“We’re not only talking eGov (online government services) where the government is doing important and advanced work, but also boosting all public services,” he continues. “The digital revolution can help small and medium-sized businesses, which generate 60% of Israel’s gross domestic product, compete – not just against large businesses but also against competitors around the world. There is no better way to achieve growth while reducing social gaps than creating the next generation of services for schoolchildren, hospital patients, and also businesses.”

Another goal is turning government offices into beta sites for Israeli startups, providing the companies a place to try out new technology while putting the government at the cutting edge. The Public Tenders Law, however, would need to be revised since startups would be unable to meet current threshold requirements for government suppliers such as proven experience and minimum sales turnover.

A budget of 10 million shekels ($2.9 million) will be allocated for a steering committee composed of six members to administer the program in 2014. The committee head will enjoy the rank of director-general of a government ministry. Others on the panel will include a deputy in charge of coordination policy and control, a deputy for economics and technology, and a legal counsel.

Bar-Tal has been working on the project on a voluntary basis and doesn’t see himself as a candidate for heading the new panel. One name that has been touted for the position is that of Maj. Gen. (ret.) Giora Eiland, formerly head of Israel’s National Security Council.


“Projects for laying out communication infrastructure comprise just a small part of the overall solution that needs to be formulated,” according to the project proposal. “A lateral approach based on a comprehensive and harmonious conceptual framework needs to be adopted in order to exhaust the potential of information technology and the Internet and to prevent duplicate and contradictory efforts, bottlenecks, and repeated mistakes.”

According to the current proposal, the computing center will continue promoting central elements in carrying out the Digital Israel project, including the development of online means to improve services to the public, platforms for sharing government information and knowledge, and cloud computing services. The center also holds responsibility for several other areas overlapping with the Digital Israel initiative. One example is its centers for promoting digital literacy in the country’s peripheral regions.

Said Eitan: “The duplication screams out to the heavens. It’s simply a waste of money, a ridiculous act. The first thing the new unit will do is fight the computing center over authority. What can six staff members do? Only get in the way. What is needed is a cabinet member to take direct responsibility over all these matters and run between the ministers to promote them. Without such a minister, this will become just another unit that will disband in the next Knesset.”

Last September, after a year and a half in the position, Avner said she was resigning. Defining the Government Computing Center as nothing but a consulting body without authority blocked its ability to advance government initiatives, she said.

Will Palestine become an Arab high-tech hub? Credit: Tomer Appelbaum
Eden Bar Tal, former director general of the Communications Ministry. Credit: Moti Milrod
Michael Eitan. Credit: Michal Fattal

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