The Secret of Israel’s Brain Gain

Hi Tech Park in Nazareth by Dr. Avishai Teicher [CC BY 2.5] via Pikiwiki Israel

According to Adam Reuter, Chairman of “Financial Immunities” and author of Israel - Island of Success (Globes Business Daily, Dec. 19, 2018), Israel is not afflicted by brain-drain but rather benefits from brain-gain.

While Israel’s establishment documents net-migration of higher-education Israelis, it fails to document the massive influx of higher-education olim (Jewish immigrants). About two-thirds of the olim — 18-years-old and older — have gone through higher education.

For instance, in 2015 Israel’s Central Bureau of Statistics reported a brain-drain of 1,360 higher-education Israelis, ignoring the 14,870 higher-education olim who arrived in 2015, 48% of whom possessed graduate degrees and PhD's.

While the ratio of higher-education Israelis compared to the entire population ranks third in the world, following only Japan and Canada, the ratio of higher-education olim is significantly higher than the rest of Israel’s population. Over 25% of the olim are experienced in the critical areas of hi-tech, engineering, computer science, medicine, and health.

From 1980-2010, 30,000 higher-education Israelis emigrated (the total of exiting minus returning Israelis), while 290,000 higher-education olim arrived from the U.S.S.R., France, the U.S., and more. Considering the 25,000 higher-education olim who emigrated, there was a net brain-gain of 235,000 from 1980-2010.

From 2010-2018, some 105,000 higher-education olim arrived (out of a total of about 198,000 olim), while 22,000 higher-education Israelis emigrated — a net brain-gain of 83,000, and an annual net brain-grain of 9,000.

From 1980-2018, there has been a net brain-gain of 315,000 higher-education people! Moreover, from 2010-2016, 4,000 Israelis with PhD degrees returned to Israel with enhanced experience and networking, providing a tailwind to economic growth.

Aside from Israel’s olim boon, the state's Haredi (ultra-orthodox) Jewish population has been increasingly integrated into Israel’s economy as documented by Eli Paley, the founder and Chairman of the Jerusalem-based Haredi Institute for Public Affairs. The Haredi Institute — in cooperation with top secular Israeli hi-tech entrepreneurs — is dedicated to the enhancement of the Haredi integration into Israel’s hi-tech sector. The latter is the major driving force behind Israel’s economic growth, but is threatened by a growing shortage of skilled developers.

The goal of the Institute is to increase the number of Haredi persons in the hi-tech sector, while moving them from low-tier to high-tier positions.

The Haredi community has expanded from 4% of Israel’s population in 1980 to 11% in 2018, while accounting for approximately 20% of the population under the age of nine.

While 18% of working Haredi women possessed academic degrees in 2006 (compared to 7% of Haredi men), the volume grew to 24% in 2016 (compared to 11% of Haredi men).

A recent study by the Institute on The Quality of Life Among Israel’s Population Groups documents a rise in the employment rate among Haredi men from 40% in 2008 to 52% in 2018, while the employment rate among Haredi women surged from 57% to 75% over the past decade. However, despite the rise in employment, the majority of Haredi Israelis remain employed in lower-level positions.

According to tests and evaluations conducted by the Haredi Institute, the graduates of Haredi seminaries in the computer science track demonstrate talent, strong work ethics, and ambition equal to the secular population.

This trend, together with the UK influx of educated olim, ensures that Israel will continue to see a brain-gain in the coming future.