Heads of industry choose education over tax breaks

A new survey by the Israel Democracy Institute (IDI) shows that high-ranking officials of the business sector gave the government an unsatisfactory to fair evaluation for its management of the challenges facing the Israeli economy.

Respondents to the survey said that when it came to training the younger generation via the school system for the challenges of the future labor market the government, 73 percent of business leaders said the government was not doing enough — giving the government an average ranking of 2.1, on a scale of 1 to 5. Training adults for the challenges of the future labor market was also deemed unsatisfactory, with the government getting a grade of 1.8 on the same scale.

Surveyed companies gave the state of the labor market a relatively poor grade — 3.5 or slightly above fair — despite the low unemployment rate.

The business leaders also said the government’s performance was unsatisfactory when it came to reducing regulation and the burdens of compliance burdens — giving the government a mark of 1.9 out of the 1-5 ranking.

Even so, and despite all the difficulties, more than half of the respondents (52%) said that they would establish another company in Israel, while 6% preferred the United States. The respondents also rated Israel’s economy as fair to fairly good — with the average grade a 3.7 in the 1-5 scale.

Education seen as top priority

The survey’s findings demonstrate how important the issues of education and training are to the representatives of companies in the business sector, the IDI said in a statement.

Sixty-three percent of the managers polled said they prefer the state boost education and training with the tax revenue it collects from the exits, or sale, of startups. Only 21% said the funds should be used to reduce taxes.

Fifty-four percent believed that these budgets should be used to improve the health-care system and 44% believed that they should be used to narrow social gaps.

When the officials were asked how long it would be until most of the work in their companies was performed by automation, the average response was approximately 10 years or more.

Company officials were also asked to evaluate the extent of their preparations for the anticipated changes, once automation penetrates most areas of life.

They estimated the extent of their preparations regarding technological upgrading as fair to satisfactory (3.6 on a scale of 1 to 5), but gave their preparations regarding employee retraining a relatively low grade (3.1 on the same scale).

While 57% of the company officials polled predicted that their companies’ workforce would be reduced due to automation, 47% predicted that the decrease would be no more than slight. Forty-either percent believed that workers should be sent for professional training to prepare for the adoption of automation/innovative technology.

The high-tech industries reported a severe shortage of engineers, programmers, marketing professionals and technicians/practical engineers. The traditional industries, on the other hand, had difficulty recruiting drivers, machine operators, engineers , technicians/ practical engineers and marketing professionals, and welders.

The survey also found that high-ranking officials in the high-tech industry are more flexible than officials in other industries regarding the option of working from home.

More flexibility for women in high-tech

Thirty-four percent said that it was acceptable for management to work from home one day or more per week, as compared with 16% of respondents from the other industries, and 19% of high-ranking officials in the high-tech industry said that mothers could work from home, as compared with 4% of respondents in the other industries.

When the officials in the business sector were asked to grade the policies of the various ministries, the Ministry of Finance received the highest grade (2.9, or “fair”), while the Ministry of Labor, Welfare and Social Services received the lowest grade of all (2.2, with 2 meaning “fairly bad”).

The Ministry of Education and Ministry of Economy and Industry also received unflattering grades. The former received 2.5, while the latter received 2.6 — reflecting a range from “fairly bad” to “fair.”

“The Israeli economy, high-tech and non-tech industries alike, is suffering from an excess of bureaucracy and regulation that is hindering business in the country,” said IDI President Yohanan Plesner. “No wonder we are ranked 52 out of 190 countries in the World Bank’s Doing Business Index, and in the bottom fifth among OECD member states. The results of this survey highlight the extent to which we need to rethink processes and regulations to make them more fitting.”

An IDI-led research team, which included representatives of employers, employees, government ministries and research institutes, is formulating policy recommendations about appropriate ways to prepare for the challenges presented by the future labor market, the statement said.

The survey was released as part of the Eli Hurvitz Conference on Economy and Society (formerly known as the Caesarea Forum), an economic conference that is taking place under the theme of “Two Economies — One Society. The conference, which is sponsored by the Israel Democracy Institute (IDI), focuses on roadblocks and opportunities in the economy, the workforce, and regulation.