The European Union is to demand that Israel halt settlement projects in the disputed territories. EU officials, according to a document released to Haaretz, are looking into the possibility of setting five “red lines” to deter house building, raising concerns in the Israeli foreign ministry that further European sanctions against Israel are inevitable.
But is Israel worrying too much? It is true that Israel is dependent on trading agreements with Europe, but it’s just as true to say that Europe is reliant on on Israel. Why? For the simple reason that Europe needs Israel in order to become a dynamic knowledge economy if it is to compete successfully with China, India and the US.
When it comes to knowledge-based industries, Israel is one of the most competitive economies in the world thanks to its extraordinary capacity for innovation. It is no secret that Israel is a world-leader in the hi-tech and start-up sectors. Israel’s remarkable laboratories and scientific institutes are the envy of the world and a magnet for international investment.
Israel boasts around 4,000 technology start-ups, which is more than any other country outside the US. Not surprisingly, half of Israel’s exports are of the hi-tech variety. Israel leads the world in patents for medical equipment and is a supplier of inexpensive but crucial medicines to Europe, such as Copaxone for multiple sclerosis and Actos for type 2 diabetes. And it has attracted the most venture capital investment per capita in the world, thirty times more than Europe.
Israel also has the highest proportion of researchers in the global business sector and one of the highest investments in civilian research and development – more than four per cent of the country’s gross domestic product.
In the years and decades to come, Israeli engineers, computer scientists, inventors, chemists and biologists will drive not only Israel’s economy but will provide benefits to Europe and the world at large. The UK, for example, has been building solid trade links with Israel amid talk of a stronger partnership between British and Israeli companies in the areas of innovation, hi-tech and science. The fact that a young and tiny country like Israel is well ahead of the UK in terms of research and development speaks volumes about the jaded nature of British industry.
If Europe wants to compete with China and the US in the areas of medical technology, homeland security, communications and aviation, then it must cooperate with Israel and jettison its pointless obsession with Palestinian Arabism. On one level, the EU is well aware of this. This is why Israel was the first non-European country to be associated to the EU’s Research and Technical Development program. It is also why the EU wants Israel involved in the Horizon 2020 program, the new EU research and innovation programme.
In June, Israel and the EU signed off on Horizon 2020. The program is being heralded as a massive opportunity to enhance the already active cooperation between Israeli and EU researchers, innovators, scientists and technicians. Indeed, Israel has been associated to EU research and innovation programmes since the mid-1990s. During the last programme (2007-2013), Israeli public and private institutions contributed their scientific expertise to over 1,500 projects, and contributing over €530 million to the programme.
In the words of José Manuel Barroso, the president of the EU commission, “Israel is a strong player in research and innovation and for this reason an important partner for the EU to address societal challenges of common concern, such as ageing, food safety, environment protection or cleaner energy, and to strengthen the competitiveness of our industries.”
Without Israel, Europe is less competitive. In the aftermath of a global recession and a eurozone crisis, a return to competitiveness is vital for the economic well-being of Europe and the rest of the world. The EU leadership must be realistic and abandon the boycott of Judea and Samaria and concentrate instead on building solid relations with the world’s leading innovator, Israel.