Technion - Israel Institute of Technology in Haifa (Photo/Wikimedia-Technion  CC BY-SA 2.0)
Technion - Israel Institute of Technology in Haifa (Photo/Wikimedia-Technion CC BY-SA 2.0)

Israel’s world-class universities are a valuable investment

Israel is known worldwide as the startup nation for its technology innovation, second only to Silicon Valley for its technology success. According to Entrepreneur magazine, this is due to four key factors:

1. Talent: Its universities put out a highly educated workforce

2. Entrepreneurs: The magazine article cites “a people with courage, drive, creativity, boldness and tenacity”

3. Ecosystem: Virtually every major global tech company is represented

4. Costs: Lower salaries, efficiency, rapid implementation of innovations

All of that sounds about right!

Yet, what’s less known is the value and efficiency of R&D in Israel, especially at its universities, which provide exceptional bang for the buck. Here are several reasons why:

Faculty and student costs: Unlike most U.S. institutions, the government determines faculty salaries at its major universities. According to the Boston College Center for International Higher Education, the average salary for a professor in Israel is around $60,000. In comparison, the average salary for a professor at Columbia University in 2013 was $213,300; Princeton, $200,000; and Cornell, with the lowest salaries in the Ivy Leagues, $159,800. The average for all private universities in the U.S. is nearly $90,000.

In terms of student costs, like Europe and Canada, governmental support of higher education in Israel means low tuition. The cost of attending schools like Technion, Hebrew University and University of Haifa is about $4,000 a year.

Finally, another telling number is the fellowships paid to graduate and doctoral students for their research work. At Stanford, for example, a graduate fellowship for an engineer is $41,700 a year. At the Technion, it is $12,500. This means in Israel, the same $42K gets you three graduate engineering researchers instead of one.

Efficient institutions: Israeli institutions operate at a fraction of the cost of their American counterparts. Consider the Technion, often called the MIT of Israel. The Technion educates 10,300 undergraduates and 4,500 graduate students — compared with 4,500 undergraduates and 6,900 graduate students at MIT. And yet, MIT’s annual budget in 2016 was $3.35 billion, dwarfing the Technion’s annual budget of about $416 million.

Of course, the biggest expense driver at all universities is salaries. Israeli universities are simply cheaper to operate than American ones because the salary levels at all levels of employment — from support staff to senior administration — are markedly lower.

Leading academics: Even more remarkable about Israeli universities is what they produce with limited resources. Israel represents .001 percent of the total world population, yet it produces nearly 1 percent of all academic papers. According to the 2017 Nature Index, Israel ranks 15th globally as a country and 14th globally for life sciences. It is also home to the highest concentration of engineers and Ph.D.s per capita in the world.

Academic rankings consistently place Israeli institutions — notably Hebrew University, the Weizmann Institute of Science and the Technion — in the top 100 world universities. In 2017, the Technion was No. 93 in the ShanghaiRanking’s Academic Ranking of World Universities – the only Israeli university to make the top 100. In November 2017, Times Higher Education ranked the Technion as the world’s top academic institution (ahead of MIT, which came in sixth) for providing the digital skills required to succeed in today’s labor market.

Another measurable accolade is the coveted Nobel Prize, and Israel is tied for fourth place with France and Russia, and ahead of Canada, Austria and Norway. Among universities whose faculty and alumni received the Nobel award, the Technion ranks 10th globally and is the only non-U.S. school to make it into the top 10 (Times Higher Education World University Rankings).

Advanced labs: While Israeli universities spend far less than their U.S. counterparts, their facilities are second-to-none. Partnering with industry, government and philanthropists, labs at Israeli institutions are at the frontier of advancing some of the most complex endeavors, including brain science, cancer research, artificial intelligence and quantum technologies. Today, Israeli universities attract scholars from all over the world because of their cutting-edge facilities and resources.

International partnerships with industry and academia: International heavyweights, including Apple, Google, General Motors, Intel, Microsoft, Siemens and Novartis, sponsor research, set up labs and develop technologies together with Israeli university researchers. Two notable partnerships involve the Technion, Israel’s oldest university. One is New York’s Cornell Tech, whose new Roosevelt Island campus is home to the Jacobs Technion-Cornell Institute. The other is the Guangdong Technion Israel Institute of Technology in China.

What does the state of Israeli universities mean to investors and philanthropists? The take-home message is that for those interested in supporting academic research, Israel should be considered one of the most attractive places for such projects. To this point, in 2013, President Barack Obama said, “If people want to see the future of the world economy they should look at Israel, home to hundreds of startups and research centers.” Nearly five years later, Israel continues to be one of the most robust foundations for groundbreaking research of global significance — at a fraction of the cost.

Stephen Grand

Stephen Grand is the co-founder of Grand/Sakwa Properties LLC, a Farmington Hills, Michigan-based developer of retail centers, residential subdivisions and office parks in the Midwest. Stephen and his wife, Nancy, former president of the San Francisco Jewish Community Federation, live in Belvedere, California, and are active in numerous philanthropic activities throughout the United States.