"We're used to seeing China and India as future technological superpowers but that's a mistake. Those two countries don't have high tech in the Israeli and US sense, " Goldman Sachs partner and senior US investment strategist Abby Joseph Cohen told the Technion, Israel Institute of Technology board of governors meeting yesterday in the Yitzhak Modai Memorial Lecture entitled "Economic Growth and Innovation."
She said, "China and India manufacture products requiring relatively simple technology, and a cheap workforce, and not products with high added value. Within the context of advanced technology, the US and Israel are top of the table and that's an excellent reason for optimism." Also high on the list, she said, were Switzerland and Germany with China, India and Brazil bringing up the rear.
She described the Technion-Cornell Innovation Institute in New York City, the joint venture between the two universities for applied engineering and science research as a most important enterprise merging private and public resources to promote education for science and technology through understanding that education is a prerequisite for economic growth and sustainability. She said, "Investment in education is the most important economic investment and the Technion Cornell University venture in New York is an excellent example of such an investment.
She continued, "Economists love to talk about GDP and the state of the capital market and other variables as indices of a country's economic situation whereas here I'm talking about indices that influence the long term economic situation, and quality education is the most significant single source influencing long term economic growth. We must understand that higher education is an integral part of effective economic policy."
Joseph Cohen said, "There is also a close connection between higher education and economic situation and employment at the personal level. In the US the rate of unemployment among the general population is 8.2% while among college graduates it is less than 4%. The average annual salary for the main breadwinner in a family for college graduates is $85,000 and only $20,000 for those without college education. Moreover, while the US recession hit all sectors, in terms of unemployment and salary levels, those without college education were worst hit."
She added, "In Israel the figures are similar. 50% of people with only eight years school education or less live under the poverty line compared with only 10% of people with a college education. A high level of poverty, as is known, is prevalent among the ultra-orthodox and Arabs, and the two of the main reasons for this are the absence of a college education and the average size of families in these sectors."
Published by Globes [online], Israel business news - www.globes-online.com - on June 14, 2012
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