High-Technology Industries as a Vehicle for Growth in Israel's Peripheral Regions

Abstract

This paper is a discussion of the subject of high-technology industrial development in peripheral regions. Findings from the literature are utilized to analyze critically the prospects for promoting high-technology industrial growth in Israel's peripheral regions. Alternative strategies for development are proposed. In section 2, the specific case of Israel, where the development of high-technology industries has recently been given high priority and attracting high-technology industries has been proposed as a viable strategy for promoting growth in peripheral regions, is discussed. This is presented in the context of the history of Israel's industrial development in general and of its high-technology industrial development policy in particular. In section 3, three alternative strategies for development policy are proposed, and the suitability of each to Israel is analyzed. The alternatives—the ‘Silicon Glen’ model, the specific area focus, and local-based development—all pursue strategies that sometimes contradict one another, sometimes overlap, and sometimes reinforce one another, thus generating the possibility of a fourth, and more optimal, policy strategy. In conclusion, it is not proposed that there exists a single policy strategy that could be claimed to be optimal for every peripheral region. Thus, no attempt is made to evaluate the superiority of one strategy alternative over another. This conclusion is reached after comparing the international literature to the case of Israel. It is apparent that high-technology industries are not necessarily always the best solution to the dilemmas of economic development in every region, particularly the ‘outer-ring’ border regions. A separate plan must be made for each peripheral region in light of its specific socioeconomic and locational characteristics. In drafting a regional development policy, planners must then deliberate whether or not high-technology industry is indeed likely to succeed in promoting regional economic growth.