Soviet Jews built the start-up nation. Israel should rush to welcome Ukrainian refugees today
Over 2 million Ukrainians have fled their country in the 14 days since the aggressive Russian invasion began, creating the fastest refugee crisis in modern history.
Ukraine’s neighbors — such as Poland, Hungary, Moldova and Belarus — have been the first destination for most of these refugees, as the rest of the world watches in awe as the numbers continue to increase day-by-day.
When the news cycle inevitably shifts, the global solidarity toward refugees will be replaced by attempts to limit the inflow of these refugees, just as was done to the Syrians, Venezuelans and other displaced populations fleeing persecution and violence over the past decade. Israel is already debating how many non-Jewish refugees to allow to stay.
But in truth, countries should be competing to take in refugees, not figuring out how to send them away. Welcoming the stranger is not only the morally right thing to do, but will inevitably lead to enormous medium and long-term economic gains if coupled with the right policies.
The story of modern Israel exemplifies the tremendous gains that Ukrainian refugees could bring to their host nations if they are given the chance to do so.
Between 1989 to 1995, as the Iron Curtain was being pulled down, over 600,000 immigrants from the former Soviet Union arrived in Israel, increasing the population of the country by nearly 15% in only five years. By the mid-2000s, the total population of Israel increased by 20% due to this inflow.
Let that number sink in. This is comparable to the United States admitting 60 million refugees in just a few years (the U.S. currently admits only 125,000 refugees per year — a shamefully low number, though a big improvement from the 15,000 quota established during the Trump years).
In many nations, refugees must go through a lengthy process to be recognized as such, often spending years without the right to work or to receive benefits.
In Israel, through its Law of Return, immigrants from the former Soviet Union who were able to prove Jewish ancestry immediately received citizenship — along with full access to the labor markets and social benefits such as health care, education, retirement and more.
At the time, I’m sure some prophets of doom predicted that increasing the number of workers in the economy by 20% would tremendously hurt Israelis, as increased competition would result in lower wages. But in an influential study, my Brown University colleague Rachel Friedberg found that this was not the case: the wages of Israeli natives were not affected by the huge inflow of immigrants at all.
In fact, dozens of studies that have looked rigorously at the effect of large immigrant flows on wages, in the United States and beyond, consistently show that the newcomers have little to no impact on the salary of the incumbents. In part, this is because immigrants bring skills to the economy such that they do not end up competing with locals, but rather complementing them.
This was quite the case of immigrants from the former Soviet Union to Israel who, alongside tremendously effective public policy, played a big role in Israel becoming the “startup nation” we know today.
Perhaps it was due to the pogroms in the Russian empire and the antisemitism that characterized the institutions of the Soviet Union that Soviet Jews were more likely to get trained in scientific and technical disciplines rather than investing in businesses, which were not portable and more prone to punishment by authorities. But whatever the reason, when this population immigrated to Israel, they brought important and in-demand STEM skills to the growing technology sector.
But public policy also played an important role: in an effort to make sure immigrants from the former Soviet Union were properly integrated into the labor markets, the Chief Scientist of the Ministry of Trade and Commerce (today the Ministry of Economy) through a public-private partnership invested in firm incubators that hosted new ventures ran by immigrants in their teams, which helped make Israel the country with the highest number of venture capital funds per capita today.
Among the many success stories of immigrants in the Hi-Tech Israeli scene is the story of P-cure, a firm that provides patient-centered proton therapy treatments for cancer, founded in 2007 through one of these incubator programs. Its founder, Michael Marash, was originally from Belarus and immigrated to Israel with his parents in 1990 while in college. Before becoming an entrepreneur, Marash took advantage of Israel’s publicly-subsidized education system, completing secondary and tertiary degrees in genetics, as well as an MBA.
Marash’s gravitation toward STEM disciplines was shared with many first- and second-generation immigrants from the former Soviet Union. It should come as no surprise, then, that Israel has become a preferred destination for the largest global multinational corporations’ research and development centers, converting Israel into the country with the largest investment in R & D as a share of its gross domestic product.
The example of Israel is an important one, but it is not the only one. For readers of the Forward, it would come as no surprise that Jewish scientists who fled from Europe to America during the Holocaust were also instrumental in developing scientific progress in the United States in ways that would have been inconceivable to achieve otherwise, as this study shows, as well as marking important contributions in many other occupations and industries.
John von Neumann, a Hungarian Jew, was one of the most proficient of these scientists and became a founding figure in computing, as well as a core member of the team of the Manhattan Project, which developed the atomic bomb.
The list goes on and on. It is the rule, not the exception, that persecuted populations from all corners of the world, when given the chance, can convert anything they touch into gold.
That will also prove to be true of Ukrainian refugees today, if only we give them the chance.
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