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🇮🇱 Israel /Economy & Trade

A strategic miss: R&D is Israel's brain - so why does it develop, manufacture abroad? - opinion

From Jerusalem Post · (5m ago) English Critical tone

Summarized and contextualized by DistantNews.

TLDR

  • Israel excels in R&D but risks strategic vulnerability by manufacturing abroad, unlike Western nations investing in local production.
  • Factors like unsupportive government policies, high costs, and regulation have driven factories overseas, diminishing local manufacturing.
  • The article argues that combining Israel's technological strength with local advanced manufacturing, particularly in defense, can boost national sovereignty and economic growth.

As a nation built on innovation, Israel's prowess in Research and Development is undeniable, generating significant revenue and global recognition. However, this publication, The Jerusalem Post, must highlight a critical strategic oversight: our continued reliance on manufacturing abroad. While the United States and Europe are pouring trillions into revitalizing their domestic advanced manufacturing sectors, Israel appears to be selling off its future by exporting production.

R&D is the brain. Manufacturing is the heart.

— Zuri DabushChairman and Controlling Shareholder of Klil Windows, emphasizing the importance of manufacturing.

We possess the 'brain' in R&D, but manufacturing is the 'heart' – the deep, stable engine of wealth and national value. The higher one moves up the value chain, the greater the profit. Yet, Israel's focus on intellectual property, while lucrative, leaves us vulnerable. Geopolitical crises and supply chain disruptions have starkly illustrated the dangers of depending on others for essential goods, a lesson painfully learned during wartime when ammunition imports became a critical concern. The Prime Minister's recent call for local production signals a belated recognition of this dependency.

The value of intellectual property is orders of magnitude lower than the value of the final product.

— Zuri DabushChairman and Controlling Shareholder of Klil Windows, arguing for the greater economic benefit of manufacturing.

The decline of our local industry isn't due to a lack of capability, but rather an unsupportive environment. Burdensome regulations, high energy costs, and a shortage of skilled labor, coupled with a lack of robust government backing, have incentivized factories to relocate. This trend transforms vital industrial zones into real estate projects and forces manufacturers to import goods they could, and should, be producing domestically. The world is moving towards strengthening local industrial manufacturing for greater sovereignty and resilience; Israel, alarmingly, is moving in the opposite direction. It is time we harness our world-class technological knowledge and combine it with advanced local manufacturing, especially in critical defense sectors, to evolve from a mere supplier of ideas into a formidable manufacturing power.

Geopolitical crises and supply chain disruptions have proven that countries without local manufacturing are overly dependent on others.

— Zuri DabushChairman and Controlling Shareholder of Klil Windows, highlighting the risks of offshore manufacturing.
DistantNews Editorial

Originally published by Jerusalem Post. Summarized and contextualized by our editorial team with added local perspective. Read our editorial standards.

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