Jack Mintz: Do boycotts against Israel include inventions that could save protesters' lives? (2024)

On Tuesday, Israel celebrated its 76th anniversary. Getting to 76 has not been easy. Since the malevolent, unprovoked attack by the terrorist organization Hamas on Oct. 7, Israel has been on the defensive in terms of both security and international reputation. As of May 9, the number of soldiers and members of other security forces killed since last year’s Memorial Day is 716, that on top of the 1,200 civilians murdered by Hamas’s October attack. With more than 130 live or dead hostages still being held by Hamas, how can Israelis celebrate their country’s founding? A two-state solution, which has been a goal since the British mandate ended in 1948, looks farther off than ever.

Article content

But Israel’s 9.2 million people did celebrate, if in a muted way. So should the rest of the world. Israel has made outsized contributions that have saved millions of lives around the world and helped raise millions of others out of poverty. Its innovative success is a tonic against the “river-to-the-sea” protesters who only want to boycott and extinguish Israel while harassing Jews in the Diaspora.

Article content

I was recently looking at World Bank data on per capita Gross National Income (GNI), trying to measure Canada’s progress compared with how other countries have been doing. To get to GNI, start with gross domestic product (GDP) — the value of what’s produced in the country — then subtract out payments to foreigners and add in payments received by residents from abroad. (In fact, Israel’s GDP and GNI were almost identical in 2022: payments from abroad basically equaled payments going out of the country).

Looking across countries, I was surprised to see that Israel’s per capita GNI is now greater than Canada’s. Measured in USD smoothed to eliminate volatile exchange rates, it was US$55,140 in 2022, the last year for which data are available. Canada’s was US$53,310. Back in 1970, Canada’s per capita GNI was more than twice Israel’s. Since then, Israel has grown more than twice as fast as Canada.

Article content

Article content

For an economist, this rapid growth comes as something of a surprise. Since 1948, Israel has devoted considerable resources to defence and security. Economics 101 teaches that resources are allocated between guns and butter: more spent on defence means less consumption and investment. Yet Israel has clearly done very well with the investments it has been able to make.

Many factors explain Israel’s unique growth, but its innovative culture as a startup nation has been key. Adjusting for economic size, Israel has been the highest spender on research and development among advanced countries every year since 1999. In 2022, its R&D was 6.01 per cent of GDP, easily outpacing second place South Korea (5.21 per cent) and third place Taiwan (3.96 per cent) and more than three times 21st-ranked Canada (1.71 per cent).

Since the first wave of immigration in 1882, Jews settling “Southern Syria” (as the Ottoman Turks called it) adopted an ethos of innovation in order to overcome harsh living conditions. The 437,000 immigrants who arrived from Europe between 1882 and 1939 included large numbers of engineers, scientists, doctors, lawyers, architects and musicians. As Maristella Botticini and Zvi Ekstein emphasize in their 2012 book, The Chosen Few: How Education Shaped Jewish History, 70-1492, education has been stressed in Jewish life going back to Roman days, when Jewish children were taught to read and write well in advance of kids in other cultures, both then and in later centuries.

Article content

After doubling between 1950 and 1970, however, Israel’s GDP stagnated over the following two decades and the country even experienced hyperinflation, with the consumer price index over 100 per cent every year from 1980-85, peaking at 445 per cent in 1984. This led many Israelis to move to Silicon Valley, which eventually resulted in a close relationship between U.S. and Israeli innovators. Eventually, Israel restored its health with a stabilization plan including debt reduction, spending cuts and privatization of many state-owned companies. Financial markets were deregulated, capital controls were eliminated and trade barriers were sharply dismantled.

Growth resumed in Israel in the 1990s with a major migration of scientists and other professionals after the collapse of the Soviet and Eastern European communist governments. Rather than let these new professionals languish, the Israeli government re-educated many of them to become computer hardware and software scientists. It also started the Yozma program in 1992, which provided partial equity funding creating 16,000 start-ups and later reduced capital gains taxes in 2004 (a lesson Canada should learn). As of 2011, over US$3 billion in capital was managed by Yozma companies.

Article content

A key element behind Israel’s innovation culture is chutzpah. From their earliest education through military recruitment, Israelis are taught to be unafraid to question superiors. As Scott Thompson, president of PayPal, remarked in 2007 after purchasing the Israeli startup FraudSciences: “I’d never before heard so many unconventional observations — one after the other. Junior employees had no inhibition about challenging how we had been doing things for years.”

Among the many innovations Israel is famous for are: the flexible medical stent, the computer firewall, micro-irrigation, sophisticated bee-breeding, clean water produced from air, road safety (e.g. Waze), harm-free pest control and the Iron Dome defence system.

This year, four Israeli firms were among the top 50 innovative companies in the world, according to one ranking. The four are: Viz.ai, a medical image company that uses AI deep learning technology to analyze CT scans for faster treatment; Papaya Global, which has a technology that allows multinational companies to pay workers in their own currency; Uveye, whose AI-systems conduct automated vehicle inspections; and GrayMatters Health, whose FDA-approved Prism device helps patients deal with post-traumatic stress disorder.

These and many other Israeli inventions are used throughout the world today. When protesters demand boycotts of Israel, does that include denying themselves access to Israeli inventions that might save their own life one day? Boycotts are seldom an answer to anything. They certainly won’t stop Israeli innovation. Rather than boycott, Canadians should both access and mimic Israeli ideas, talent and techniques to improve our own lagging productivity.

Financial Post

Article content