Israel may drop out of developed world if key professionals emigrate - expert

While Israel has a population approaching ten million, if only a few tens of thousands of the country's hi-tech professionals, physicians, or senior academic faculty leave the country, it could initiate a spiral of economic collapse, Tel Aviv University economist Prof. Dan Ben-David warned.

"The hi-tech sector alone is responsible for about half of Israel’s total exports," explained Ben-David, who also heads the Shoresh Institution for Socioeconomic Research. "Only 6% of Israel’s employed persons are in hi-tech professions in the high-tech sector.

Only 0.6% of Israel's population aged 25 and over are physicians, Ben-David went on. "The level of medical care we receive depends on our skilled physicians."

Those who train the physicians and hi-tech workers are the senior faculty at Israel's research universities, Ben-David added. These faculty members constitute only 0.1% of the adult population aged 25 and over and are responsible for the training of "all those people who keep Israel at the forefront of human knowledge."

"The above three groups together – the people primarily responsible for keeping Israel in the developed world – comprise less than 300,000 people, less than 3% of the population. If only a few tens of thousands from this group give up on the country’s future and decide to leave, Israel will be hard-placed to retain its cutting-edge hi-tech sector, healthcare system, and universities," he added.

The looming threat of losing these professionals to immigration is not an empty one, according to Ben-David.

"Even before the last year and a half – the worst since Israel’s birth – more and more educated Israelis, the backbone of the country’s economy and society, are giving up and leaving," he said.

"Looking at all those who obtained an academic degree in Israel from 1980 to 2010, 2.8 such academics left for every academic who returned to the country in 2014. Although the absolute number of those leaving is not high, the ratio of four emigrants per returning academic was surpassed within just four years."

Additionally, when looking at OECD data, one can see that "the number of Israeli physicians in other OECD countries, as a percentage of all physicians in Israel, has been steadily increasing," Ben-David added, highlighting that this number has more than doubled from 2000 to 2020.

While these rates are low, the trend is clear, explained Ben-Daviv, adding that this figure does not include physicians leaving for the US, which would raise the rate even higher. 

When looking not just at academics but at the general public, "the number of Israelis who left, for every Israeli who returned, grew from 1.3 to 2.0 in less than a decade and a half," said Ben-David, adding that while it's not yet possible to get a full picture for 2023 and 2024, "initial signs are quite problematic."

"After decades of gradually increasing emigration [from Israel] in small doses, the past year and a half has caused many to internalize where long-term processes have been leading Israel."

"The attempted judicial coup from early 2023 and the continuing efforts to achieve it today; the October horrors and incomprehensible savagery when parts of the country were occupied; a divisive governing culture that turned the skilled and educated, the pilots, and families of hostages into enemies of the state; increasing destruction of Israel’s diplomatic relations with other countries; an escalating war with a government whose intent to hold onto power far exceeds its concern for the overall good of the nation; and the insistence of the Haredim – whose share in the population doubles every 25 years – on evading the defense and economic burdens. Over of all these flies the largest black flag in Israel’s history," he warned.

If Israel does not change its trajectory, "these processes endanger the country’s very existence," warned Ben David, quoting a letter signed by him and 130 economists and made public in May.

"Many of those who bear the burden will prefer to emigrate from Israel. The first to leave will be those with opportunities abroad […] Israel’s remaining population will be less educated and less productive, thus increasing the burden on the remaining productive population. This, in turn, will encourage further emigration from Israel," he quoted, describing a "spiral of collapse."

“This is a clear and present danger to the country, one that we assess has a very high probability of realization," the letter stated.

"History will not forgive the State’s leaders in the present and future – from all ends of the political spectrum – if they stand by."

What the founding generation was able to build in Israel is nothing short of an extraordinary miracle, said Ben-David.

"Despite the exponential growth of immigrant populations arriving with only the clothes on their backs, despite a period of food rationing to ensure that all were fed, they built not only towns, roads, and businesses. Somehow, they had the wherewithal to find and allocate resources to build world-class universities," he said.

While the population exploded between 1948 and 1973, growing by 300%, the number of senior faculty members at universities far outstripped this, growing at 3600%, Ben-David explained.

"Within just 25 years, the founding generation brought Israel very close to the United States in terms of the share of university faculty in the population. Years later, these universities provided the primary foundation that enabled Israel’s leap into the high-tech world, which became not only the economic locomotive for the entire economy but also the nation’s iron dome defense."

But times have changed as national priorities were derailed, Ben-David explained.

From 1973 to 2016, the population share of senior faculty dropped by 60%, the number of hospital beds per capita has been in free fall (decreasing 47% by 2021), and Israel's roads became clogged with 3.4 times the average road congestion of Denmark, Belgium, the Netherlands, and Switzerland to which Israel was similar in 1970, Ben-David explained.

Israel's level of knowledge in core subjects is also at the bottom of the developed world, according to PISA exam results, Ben-David said, explaining that this is not because of haredi men, who do not study the material and who are not tested in these exams. Had they also been tested, the national average would have been even lower.

A common excuse for this neglect in education, health, and transportation infrastructure is the country's high defense expenditure, said Ben-David, who explained that contrary to popular belief, this is not the case.

Budgetary priorities shift 

While public defense expenditure was higher than the OECD average from the mid-1960s to the mid 1980s, "from the mid-1980s until the Second Intifada, about two decades ago, civilian expenditures were very similar to the OECD average."

"The shift in civilian focus from the mid-1970s onwards resulted from a pivot in budgetary priorities, not from a lack of funds. An absence of budget transparency does not allow us to know how much civilian money was derailed from national to sectoral and personal directions, but we all see and feel the results," he said.

"The magnitude of the resources required for the rebuilding of Israel will not leave any degrees of freedom for the continued funding of narrow sectoral demands," Ben-David stressed.

 "If there was ever a time for Israel to reset its national priorities, it will be the Israel 2.0 that we will need to rebuild."