Introduction

Abstract

As they did in other developed economies of the West, middle-class Israelis took to the streets to protest in 2011 over economic conditions. But it was not obvious why: Israel didn’t suffer a recession, controversial bank bailouts, or a housing slump in the wake of the 2008 financial crisis, and its high-tech sector was thriving. Yet Israelis were discontent and the reasons were similar to elsewhere in America and Europe—economic insecurity, rising inequality, poor schools, and the high cost of living. Israel’s thriving high-tech sector, the heart of its knowledge economy, has failed to provide the foundation for an economy of broad-based wealth and opportunities. Technology companies’ employment base is too narrow to provide that while the rest of the economy is globally uncompetitive.