It is rather surprising, even shocking, to find the United States ranked #11 in the prestigious Bloomberg Innovation Index. In 2013, the US was ranked #1 but has since dropped from being the world leader to coming in below the top 10.
US leaders are now on their guard, forced to confront those threatening America’s global competitive position. Significant legislation has passed in the House of Representatives and the Senate dealing with reorganization and massive investment in research and development, education, and technology infrastructure. The Senate bill, titled the United States Innovation and Competitive Act (USICA), creates a new Directorate for Technology and Innovation within the National Science Foundation (NSF) to focus on key technology areas. Similar legislation is included in the NSF For the Future Act, passed by the House of Representatives. Both bills provide additional and significant funding for research and development.
The 2021 Bloomberg Innovation Index ranks Israel as #7. Examining the index factors, Israel is #1 in R&D Intensity (expenditure on R&D as a percentage of GDP) and #1 in Researcher Concentration (professionals engaged in R&D per population). Israel’s ranking is relatively low in Manufacturing Value-added (#30) and in Productivity (#18).
Israel #1 ranking in R&D intensity is very impressive. However, it is important to realize that close to 90% of R&D expenditures come from the private sector, according to the Israel Central Bureau of Statistics. The OECD average is close to 60%.
For the near future, Israel has committed to approximately $400M annually in government funding to join Horizon, the European flagship R&D program. The Horizon Europe program is expected to provide over $110B in grants between the years 2021-2027. This is a bold decision by the Israeli government and is based on input from industry and academia, which shows the significant benefit of funding invested in international cooperation with European researchers and companies.
So what about Israel’s R&D cooperation with the US? Global competitive threats have contributed to the need for enhanced US-Israel cooperation in critical areas such as A.I., healthcare, and others. Moreover, Israel can and should be a significant contributor to developing climate-related solutions in close collaboration with the US.
The US and Israel’s well-established cooperation frameworks are models that other countries wishing to collaborate with the US look to emulate. These proven frameworks have, rapidly and efficiently, put to work additional funding to pursue collaborations between US and Israeli researchers and companies, leading to breakthrough technologies that are of mutual benefit to both countries.
In the past, one needed to explain why investment in innovation is critical for growing a country’s economy and benefiting its people. Not anymore – all advanced and less advanced countries are participating in the global innovation race, each applying a strategy according to its capabilities and resources.
The innovation race is challenging. The US and Israel should further strengthen their ties and boost joint investment to win the race together.