The Ministry of Finance will undertake a comprehensive reform of tech education in Israel using the upcoming Economic Arrangements bill, according to director general Shai Babad. Sources inform “Globes” the ministry will seek to establish a parallel body to the Council for Higher Education that will build 4-6 “super-colleges” to centralize the activities of the nearly 50 colleges currently operating in Israel.
Babad addressed the proposal at the Interdisciplinary Center’s Aaron Institute for Economic Policy annual conference. “We want to systemically deal with the tech colleges; instead of the 20 or 30 colleges that exist today with some of them categorically unworthy of the name we want to certify 4-6 centers and focus on professions that are in-demand welders, engineers, computer professionals. We will also centralize the regulation.
“Another issue is branding. Today every Jewish mother wants her son to have a bachelor’s degree. I’m not sure a BA in Japanese history contributes to our productivity as much as 12-18 months of engineering. Our problem is that the Jewish mother now says, ‘Let your son be a welder or an engineer.’ The question is how we change that perception because her son will be compensated much better as a welder or an engineer.”
Babad said the understanding of the necessity for tech education reform was sharply realized at the Ministry of Finance after Minister of Finance Moshe Kahlon and his senior staff met with business leaders last week. “There were two things they kept bringing up during the meeting the excess regulation and the lack of professional workers. The shortage isn’t among high-tech engineers but among practical engineers, welders, and technicians. More specifically, the construction sector has a massive shortage.”
Babad also said the Ministry of Finance will use the next budget to advance differentiated allocation of education funds with preference for communities in the periphery. “The inequality starts with education. We see a total correlation between the funds per child in Yeruham, Dimona and Hatzor Haglilit and the funds per student in Tel Aviv and Herzliya and the corresponding capabilities (of those kids) to succeed.”
Manufacturers’ Association of Israel president Shraga Brosh also spoke at the conference, saying “The neglect of tech education in the past 20 years and the creation of a ridiculous image is the reason it is hard for us to recruit professional workers, technicians, and engineers.”
Aaron Institute for Economic Policy head Prof. Zvi Eckstein said colleges should be given equal standing to universities because “the return on a year of college education is similar to the return on a year of university education and they thus deserve similar budgets.”
Eckstein called for the establishment of a council for tech education and to include the business sector in the curriculum plans for colleges. He said, “We should first take in a few colleges and incentivize students who believe they made the wrong choice in studying accounting or law to switch to a tech education and become certified as engineers and technicians and vice-versa. There cannot be a glass ceiling. We should follow this course of action even if it faces political opposition.”
Fix productivity with incentives
The Ministry of Finance director general also addressed other pertinent topics. He said the Ministry of Finance was trying to promote competition at the ports and in the electricity sector in an effort to raise productivity in the market. He said the ministry did not have the offensive tools to take on the union boards which is why it relied on incentives to sector workers in return for promises of increased productivity.
Babad said Israel is in the bottom ranks of place in the world that are friendly to businesses. He listed a few steps the ministry was planning, including a ‘one stop shop’ for business and asset registration and the transfer of some measures to private bodies. The ministry will also place some other bureaucratic steps online to ease access.
“We will present a significant proposal on metropolitan trains”
The Ministry of Finance will return to a public-private partnership (PPP) model and significantly expand its projects for mass transit in the metropolitan areas, said budgets department director Amir Levi. The PPP model was criticized harshly in the wake of the cancellation of the MTS tender for building a light rail train in the Dan metropolitan and its nationalization. The ministry has since admitted it made a mistake.
“We are very, very, very, very behind in mass transit in Israel,” said Levi on Monday at the conference. “One way to address it is through demand; I talked earlier about Waze and other ride-share efforts. On the supply side, we are about to start a very significant plan for metropolitan trains in Jerusalem, Tel Aviv and Haifa. We understand the best way to execute these projects is in partnership with the private sector and the cooperation of the capital markets. For the 2017-2018 budget, we will present a significant proposal on metropolitan trains based in PPP.”
“Real estate is sick; the government is failing on building starts”
“The real estate sector in Israel is rotten in almost every component,” said Prof. Eckstein on Monday. “Building starts have not risen per capita; what was done at the beginning of the 1990s is no longer happening.”
The Ministry of Finance responded harshly on Sunday to a document published by Eckstein claiming the “buyer’s price plan” will raise prices. Ministry sources accused the authors of charlatanism. Director general Babad said at the conference the ministry’s target for building starts in 2016 was 60,000 with 65,000 in 2017.
Published by Globes [online], Israel business news - www.globes-online.com - on June 21, 2016
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