It's time for the government to embrace lessons from Israel's hi-tech sector - opinion

It’s budget season once again. Companies are wrapping up their plans for 2025, as is the government. Amid the challenges of ongoing war, political instability, and widespread uncertainty, the proposed budget is shaping up to deliver bad news for the working sector. Higher taxes and increased welfare spending will shrink paychecks, while price hikes on goods and services will inflate bills.

Beyond these immediate financial concerns, the budget process highlights the country’s systemic issues – and how basic strategic planning principles from the business sector are ignored due to political constraints.

In the hi-tech sector, companies operate under intense pressure to deliver results. Budgets are not celebrated for their size but for their efficiency in achieving goals. If the government adopted even a fraction of this mindset, public services and outcomes could be dramatically improved. Here are two key areas where the public sector could learn from the private sector.

Measuring success

The first question we should ask is, “What is success?” In the private sector, success is measured by clear, quantifiable metrics. Executives focus on achieving more with less, meeting Key Performance Indicators, and enhancing profitability. For most politicians, however, success is often equated with the size of their ministry’s budget. If the budget increases, they consider their mission accomplished.

This skewed metric of success drives decision-making. For example, when private companies raise prices to meet revenue goals, they carefully calculate the impact on customer retention. In contrast, ministers pushing for budget increases rarely consider the burden on taxpayers – citizens who cannot simply switch to another “product” when taxes rise.

Similarly, efficiency is rarely a priority. The transport minister, for instance, is judged by how much money is spent on infrastructure projects, not by whether travel times or congestion levels improve.

Imagine if budget planning focused not on spending but on Objectives and Key Results. For example, if the objective were to reduce the cost of living and alleviate the economic burden on working families, raising taxes would be seen as a last resort – not a solution. Success would be measured by tangible improvements in citizens’ lives, not the budget size for the Agriculture or Housing Ministry.

Focus, alignment, and accountability

Another key difference between Israel’s government and its business sector lies in focus and alignment. In the private sector, companies operate with clear strategic goals and prioritize ruthlessly. When a project falters, tough questions are asked, and adjustments are made – whether that means consolidating efforts, freezing initiatives, slashing budgets, or even downsizing.

In contrast, the government rarely works as a cohesive unit. Ministers and ministries often pull in different directions, prioritizing their political interests over national goals. The occasional exceptions, such as the coordinated response to the COVID-19 pandemic, highlight how rare such alignment is. Even now, ministries are locked in disputes over who will lead strategic rebuilding plans for Israel’s North, delaying critical initiatives.

This misalignment stems from Israel’s political structure. Ministers represent different constituencies and know they will soon compete in elections, often as rivals. One politician I once worked with aptly described this dynamic as “frenemies.” This reality discourages compromise and fuels budget battles where no one concedes ground, lest they “lose” to a political adversary.

The result is counterproductive. Instead of targeted, strategic budget cuts or efficiency improvements, the government often resorts to “flat” cuts across all ministries, regardless of their importance or performance. Closing inefficient ministries, scaling back underperforming programs, or consolidating efforts remains rare.

A path forward

Adopting private-sector principles doesn’t mean running the government like a business. It means fostering a culture of efficiency, accountability, and alignment in service of the public good. Israeli hi-tech has earned its reputation as a global leader because it demands results, adapts quickly, and stays laser-focused on strategic goals.

In the years since I transitioned from governmental work to tech planning cycles, I’ve learned a great deal. It’s time for our government to embrace these lessons – not just as individuals but by reprogramming the system itself and changing the incentives that drive it.

With these changes, Israel could unlock its full potential. Budgets and policies would finally serve the people, not fuel political egos. Just as Israeli innovation has transformed the world, a government inspired by these principles could transform the lives of its citizens.

Before joining Lightricks as chief of staff, the writer dealt with diplomacy and public policy, working as an adviser to the education, Diaspora affairs, and tourism ministers, as well as for the Jewish Agency and Ruderman Family Foundation.