Becoming one of the 15 Most Developed Nations January 2008 Teleconference Presented at 8th Herzliya Conference

Mobility of Resources Investments Human Capital Technology Countries Compete The Competitive Approach -2-

Israel is Growing but not Leapfrogging Israel Ireland South Korea Income Per Capita Relative to US USA = 1 Western Europe

Leaping into the Top 15 ישראל15 Economist Quality of Life Index

Growth Leapfrog Leapfrogging Differs from Growth Does not narrow gapsNarrows gaps Incremental changes in products/exports Requires leadership, vision and carrying capacity At least 6%3% is good Sharp changes in product/export composition Collaborative vision not necessary Recipes existNo single formula -5-

Sophistication Now = Leapfrog Tomorrow MDG PRY BGD JAM ECU BOL LCA LKA COL HTI PER KEN IDN BLZ CHL DZA SAU OMN TUR TTO IND GRC ROM THA CYP CHN HRV PRT MYS BRA HUN AUS MEX ESP KOR NZL SGP NLD CANUSA DNK SWE DEU IRL FIN ISL CHE Product Complexity in 1992 GDP Growth Hausmann et. al., “The Product Space” -6-

Vision Design, Management and Execution of Policy Public Sphere Engines Unique Challenges and Opportunities Public Discourse Indicators Commonalities of Countries that Leapt -7-

8 Competitiveness of the private sector 29 Competitiveness of the public sector Israel’s Economic Problem is Governance Worker productivity Labor force participation rate R&D Human capital No mid-tech Public SectorPrivate Sector 3 -8-

Trust Public/Private Cooperation & Trust: Required Private Sector Investment Public Sector Legislation and Infrastructure -9-

Israel15: National Obsession Leapfrog Aliyah Greening the Desert Redeeming the Land ישראל