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Manufacturing is still critical to the economy United States. Clyde Prestowitz, says it's time to start realizing the positive spillovers that manufacturing creates... Read more  

Events & Activities

Stephen Olson at Chinese Development Institute Conference


 Clyde Prestowitz giving presentation to CDI...


Steve Olson teaching trade negotiations at the Mekong Institute...


Stephen Olson to speak at upcoming workshop organized by the International Institute for Trade and Development on 

"Economics of GMS Agricultural trade in goods and services towards the world market"

Chiangmai, Thailand Sep 8-12.

(12/17/09) ESI Israel Project Highlighted in Jerusalem Report

Can Israel Learn?

Shlomo Maital, The Jeruslaem Report

December 7, 2009

A circus, according to the Oxford Dictionary, is "a circular open space at a street junction," derived from the Latin word for circle. Some readers of The Report may have visited London's Oxford Street shopping district and risked life and limb (and wallet) crossing Oxford Circus.

If so, they are in for a surprise when they return. Earlier this month, the redesigned Oxford Circus was opened by London Mayor Boris Johnson. He hailed it as a "triumph of British engineering."

Triumph, yes. British - well, Mr. Mayor, not really.

The old Oxford Circus was the busiest shopping district in Europe. If it had been a heart and arteries, it would have needed an emergency triple bypass. Some 2,000 vehicles and 43,000 people crossed it every hour. Over 60 million passengers used Oxford Circus Underground annually. The Circus was a chaotic three-ringed circus - clogged, jammed, nearly impassable.

The British engineering firm Atkins - a major contractor for London's upcoming Olympic Games in 2012 - was hired to solve the problem. It did. Atkins engineers got on a plane and visited clogged cities that had tackled and solved a similar problem. From Tokyo they brought back the "Shibuya" solution. There, at a signal, traffic halts and pedestrians scramble across the intersection however they wish, including diagonally.

Atkins skillfully adapted a well-known idea used widely elsewhere - there are 300 such crossings in Japan. This X-crossing idea was first used in Kansas City, Missouri, and in Vancouver, Canada, in the 1940's. The 60- year-old innovation enables the Oxford Circus to handle, per hour, double the pedestrians the old crossing could. (It is significant that, to my knowledge, there are few such crossings in Israel. There is one in Jerusalem, at King George V St. and Jaffa Road - but as legend has it, its origins lie not in Japanese creativity but Israeli stubbornness: Pedestrians, it is said, simply refused to obey the neat straight crossings the British laid out).

A triumph of British engineering? Of Mayor Johnson? Or Canadian, American and Japanese engineering? Give Atkins' engineers credit, though. They were wise enough to apply a well-known management tool known as global best-practice benchmarking.

The basic idea is simple. When you have a problem to solve, you can either wrack your brains and solve it on your own, thus probably reinventing the wheel at great cost, or you can scour the world to find how others have best tackled and solved the same problem, and then adapt and adopt their ideas, rapidly and at low cost.

Imitation is not only the sincerest form of flattery, it is often the most efficient, fastest and easiest approach to focused local innovation.

Israel's political circus could learn a lot from London's reinvented Oxford Circus. Political leaders seem to believe that every one of Israel's pressing social, political and military problems is unique and must be solved from scratch. Some leaders of religious parties reject in principle the very possibility of learning from the goyim, while insisting the goyim can, of course, learn much from us.

Other small countries have faced policy dilemmas similar to Israel's and solved them. We could learn a lot from them. Yet for the most part, systematic global best- practice benchmarking is not employed by those who shape Israel's policies and make decisions.

As a management educator, I spent 42 years in classrooms teaching business principles. For years, I believed that education meant teaching. But a decade ago, I was privileged to join TIM-Technion Institute of Management Chair Lester Thurow, a former MIT Dean, and CEO Yoram Yahav in a noble experiment: Let us not teach our managers solely in classrooms; let us help them learn experientially, they said. Let's bring them to meet great global leaders. Let us help our managers learn best practices firsthand, on site, on their own. Let us apply Confucius's original action- learning principle, first stated 2,500 years ago: "I hear and I forget. I see and I remember. I do and I understand."

Since 1998, we have organized 37 one-week global benchmarking trips, each with a group of some 30 senior managers from high-tech companies. We have visited Taiwan, Singapore, China, Ireland, the U.K., Finland, Sweden, Switzerland, Silicon Valley and Boston's Route 128.

I personally took part in about 20 of these trips. It is hard to describe in words how powerful, effective and lasting these learning experiences were, according to our managers themselves. There is no substitute for learning best-practice global marketing firsthand from the Chair of Nestle, Peter Brabeck-Letmathe; operations management from British Petroleum's Chief of Staff Steve Westwell; trade policy from the Director General of the World Trade Organization Pascal Lamy; political compromise from the president of Switzerland; and branding from Manchester United football team's chief operations officer Michael Bolingbrook.

Why were such senior, busy leaders willing to spend time with Israeli managers? Why did the dynamic CEO of British Telecom (BT), Ian Livingston, spend almost an hour with us in September? I think he and other leaders wanted to learn about Israel and its innovativeness, as much as we wanted to learn about him and BT's customer service. Those good at teaching are invariably very good at learning as well.

Last year, I joined Clyde Prestowitz, who served as U.S. president Ronald Reagan's chief trade negotiator, on a project to benchmark seven small wealthy countries, as part of the chair of Teva, Israel's pharmaceutical giant, Eli Hurwitz's project to build a long-term strategy for Israel ("Israel 2028"). Prestowitz's connections brought us interviews with very senior leaders. From them, I believe we received the truth, not public relations. We wrote a document showing 100 things Israel could learn, adapt and adopt from these countries, most of them requiring little or no money.

A year and a half later, we have little hope that anyone in government will act on even one of those ideas. The paper on which our report was written will be recycled into napkins.

Israel's ports, trains, social security, income tax collection, land titles office, property tax, civil justice, urban planning and, above all, public schools are all sub-par compared to global best practice. Why? A great many practices implemented in Finland, Sweden, Switzerland, Singapore, Taiwan, Ireland and elsewhere could be studied, adapted and implemented at no cost to the public treasury. All it takes is a mindset eager to observe and learn from others.

Israel's cabinet ministers and members of Knesset are hugely well-traveled. A glance at their travel schedules suggests Israel is the world center of global benchmarking. For instance, during the week of November 8, notes the business daily Globes' reporter Lilach Weisman, no fewer than 30 ministers, deputy ministers and Knesset members were scheduled to be abroad, along with President Shimon Peres. (The daily newspaper Haaretz reports on a plan to buy an official Israeli "Air Force One," a Boeing 757, for $10 million, for political junkets, rather than lease aircraft through tender bids for each trip, as is done now.)

But travel alone is not best-practice benchmarking. Do these politicians learn? Do they see, adapt and adopt when abroad? I see little evidence of this.

Knesset spokesperson Giora Pordis told Weisman, in defense of the MKs' junkets, that "in many cases [the MKs' travel abroad] reduces anti-Israeli decisions [in foreign parliaments]." This is a dubious proposition. He makes no mention of any new knowledge the MKs bring home to Israel.

During a benchmarking trip to China, I was told by an Israeli Embassy official that the entire Knesset Finance Committee had just visited there.

Wow, I said! They must have learned a lot about China, its culture, business, political system, entrepreneurship! They must be working to build Israel's ties to China. The diplomat smiled wryly. The trip was an expensive boondoggle, I understood - like so many of the trips politicians make.

If I could, I would convene all those 30 globe- trotting politicians in the Knesset when they return, even before they unpack their duty-free whiskey, and ask each in turn these questions: What did you learn? What will you implement at home in Israel to make Israel's society and economy stronger and fairer? When will you do this? Who will help you?

I would make this debriefing compulsory and enter it into the Knesset record. Perhaps this might focus the minds of the peripatetic politicians, who love their country so much they can't wait to leave it - often, at taxpayers' expense.

So, how can Israel learn from smarter, wealthier countries? Dr. Seuss knows. "Today is your day. You're off to Great Places! You're off and away! You have brains in your head. You have feet in your shoes. You can steer yourself in any direction you choose," wrote Dr. Seuss, in his wonderful book "Oh, the Places You'll Go!"

"You'll be on your way up! You'll be seeing great sights! You'll join the high fliers who soar to high heights... And will you succeed? Yes! You will indeed! Kid, you'll move mountains! Today is your day! So? get on your way!"

And to close, for our leaders, here is poet T.S. Eliot's wonderful global benchmarking prescription:

"We shall not cease from exploration,

And the end of all our exploring,

Will be to arrive where we started,

And know the place for the first time."

And, Eliot might have added, reinvent the place - like Oxford Circus.

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