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Israel’s new far-right government is already chilling innovation and causing brain drain

Tech companies are already leaving Israel in response to proposed legislation by the new Israeli cabinet

As Jews and citizens of both America and Israel who love both countries dearly, we face the reality that if Israel’s new government acts on its words, this will destroy the very basis of Israel’s founding as a democratic, humanistic society.

Israel’s major asset is its human capital. Its world-leading innovative industrial base has been built over decades, fueled by an excellent education system and immigration. Immigrants from the former Soviet Union and elsewhere have brought knowledge and expertise. Basic sciences, medicine, biology, engineering, mathematics, agronomy and many other disciplines have thrived. These trends have been abetted by the relationships, discipline and technological training imparted by military service.

We know this from experience. We have been CEOs of major Israeli public companies in the biotechnology and pharmaceutical sectors, and have decades of experience raising capital in Israel. Together, we have advocated for biotech and the need to grow a viable biopharma industry in Israel. It is deeply disturbing to see the progress of the “Start-Up Nation” in danger due to far-right extremism in the new Israeli government.

Israel’s prosperity has been built through contributions by diverse parts of its population: its men, women, Arab citizens (nearly a quarter of the population), and — notably — its LGBTQ community, which has been free to live openly in contrast to any of the Arab countries or Iran. All are part of a vibrant, knowledge-based, democratic society and economy. Israel has set an example not just for the Middle East, but also the world.

However, if the statements of the new government are to be believed, Israel is to be governed by those who say they don’t believe in the very concept of fact-based science or in equal opportunity regardless of race, religion, gender or sexual preference, or even in allowing women and men to study together. It is worth noting that this faction holds sway in a government that is bent on doling out increasing proportions of GDP to the ultra-Orthodox community, which, for the most part, does not pay taxes, nor participate in civic life, military service, employment or secular education.

To enact its changes, this government is also pushing ahead with alacrity its proposal to allow the Knesset to overrule Supreme Court decisions by a margin of a single vote. This will unhinge the checks and balances that have underpinned Israel since its foundation and more broadly are essential to democracy. These actions are designed to prevent independent prosecution of politicians and clear a path toward what effectively will be an anti-democratic theocracy.

Gutted of its foundational freedoms, suppressing freedom of thought and expression, Israel will degrade its chief advantages of innovation and social cohesion. Its young people no longer will be highly educated, motivated warriors, steeped in technology and rational thought, capable of inventing breakthrough technologies, building internationally acclaimed businesses and defeating hugely superior enemies; they will instead become bullies and braggarts, capable only of suppressing ill-equipped enemies.

Many of the most talented will join the growing Israeli diaspora — lost to the country. The trend for highly educated Israelis to leave increased from 2.8 emigrants per returnee in 2014 to 4.5 in 2017. This “brain drain,” reported by the Shoresh Socieconomic Institute, will accelerate as more and more educational and high-tech jobs move out of Israel.

In the healthcare industry, the education system that fostered Israel’s top-tier healthcare and medical science will be degraded. According to a 2020 report from the Ministry of Health, almost half the recipients of medical licenses in Israel are Arab. Many are regarded as global leaders in medicine, and many more are pharmacists and nurses. The current education proposals and legislation to reduce the rights of Arabs in Israel will ensure that these critical resources become increasingly disenfranchised and, again, that many will leave the country.

On the business front the issue is acute: Proposed new segregationist and discriminatory laws would put Israel on a direct collision course with the mainstream businesses of America and Europe. It would be difficult or impossible for reputable international businesses to invest in, partner with or trade with Israeli businesses that comply with these laws. These foreign companies are governed by social and legal obligations in their own countries that prohibit them from working with those whose laws permit racial segregation, discriminate against women, or seek to harm the LGBTQ or other minority communities.

These dynamics will affect Israel’s own companies, as well. Such companies include Pfizer, Moderna, Novartis, J&J, AstraZeneca, Apple, Google and many others. They see in Israel a tiny market for their products but a huge opportunity to source innovation. They will act in response to the laws enacted by the new government, and over time will seek innovation elsewhere. In a harbinger of how this will affect Israel’s “Start-Up Nation,” just this week Papaya Global, an Israeli tech startup valued at $3.7 billion, announced that it is moving all its money out of Israel, as it is not confident it will be able to conduct international business under the current regime.

On the security front, businesses have been pragmatic to date. While U.S. businesses largely view conflicts with Iran, Hezbollah and Hamas as part of the justifiable battle against terrorism, few will see a massive conflagration on the West Bank, ignited by proposed legislation to restrict the rights of Palestinians, as a worthy endeavor. Instead, they will see it for what it is: a war against Palestinians waged by Jewish religious zealots. The statements and actions of the current Israeli cabinet members reinforce such an impression. When and if such a conflagration occurs, international companies will vote with their feet. Recent events in the West Bank and Jerusalem underscore this concern. Hamas recognizes that by provoking the current government, they can provoke retaliation; supporters of the new national security minister, Itamar Ben-Gvir, are already calling for massive intervention in the West Bank.

Diaspora Jews are already becoming distant from modern Israel. Their image of the “Start-Up Nation” that emerged from the ashes of the Holocaust — democratic and secular, with a vibrant society — is already disintegrating as the full impact of the proposed laws unfolds. If this rupture continues, there will be profound economic and political consequences for both nations. The American electorate and their government do not need an Israel beset by racial conflict and governed by theocracy and misogyny.

The corner Israel has turned offers only two alternatives: one rejects Israel’s current path in favor of valuing the country’s core assets of human capital, its democratic roots, its engine of innovation and its independent judiciary; the other leads to bigoted theocracy more akin to that seen in Saudi Arabia, Turkey, Iran and Afghanistan.

The choice is in Netanyahu’s hands, and if he persists in his current path, then in the hands of the Israeli people.

To contact the authors, email [email protected]

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