3.00 pm - By NEIL SANDERSON
Gurion Meltzer readily admits that Israel's success as a knowledge-based economy will not provide the precise model for New Zealand to copy, but he says the countries have similar weaknesses to overcome.
Mr Meltzer, a senior figure in the Israeli business and academic communities and a former chairman of the country's main telecommunications company, Bezeq, says New Zealand and Israel must both overcome small populations and small local markets, as well as a brain drain.
At the Knowledge Wave conference in Auckland this afternoon, Mr Meltzer said New Zealand has the opportunity to build on its advantages and raise its profile internationally.
"The capability of New Zealand is way above its reputation."
He said Israel actively promoted its high tech industries overseas but New Zealand seemed to take a low-profile approach.
He said Israel's success has "a thousand fathers" and it is difficult to rank their importance, or even to know what is a cause and what is a result.
But he is in no doubt that the military and defence industry are among the main factors.
"I think it is extremely important - especially in electronics and software."
Defence spending accounts for 16.6 per cent of Israel's budget and spending on research and development is a significant part of that.
Mr Meltzer says Israel spent 2.3 per cent of its GDP on research and development in 1996, twice that of New Zealand, and is now spending over 4 per cent, not including military R&D.
Young Israelis also develop technical skills during compulsory military service.
Israel has 140 engineers per 1000 employees - approximately twice as many as the United States and Japan.
He suggests, however, that New Zealand enjoys the advantage of having young people go into tertiary study at around age 18, three years sooner than in Israel where they must first complete their military service.
He said the military environment also instils innovation, courage, survivability and an ability to improvise.
"In the military you have the closest possible relationship between the customer and the provider," he says, pointing out that young people who have received their technical training then go on to a 6-month posting in a military unit.
He says many of the country's entrepreneurs come from the military.
Although New Zealand does not have such a strong military force, he suggested that skills such as teamwork could be taught in business schools.
Other "success generators" in Israel were a strong venture capital pool, immigration from the former USSR of 20,000-40,000 engineers and 5,000-10,000 physicians, and a culture that placed a high value on education.
But New Zealand has its own advantages, he says, citing the English language, and strong ethics.
He said New Zealand needed to clear up some misconceptions overseas.
"People have a perception that New Zealand is some kind of an island far away from Australia at the end of the world."
People in the US did not realise that New Zealand was approximately the same travel away time as Asia.
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