It is now official. A report released by Israel’s Ministry of Finance has concluded that Israel’s high-tech sector is no longer the prime engine of growth of the economy.

In the years following the last global crisis (in 2008), there was a significant slowdown in the sector (high-tech) and it ceased being the growth engine of the economy. Since 2010, the rate of growth of the sector is only half the overall rate of growth in the economy and the sector stopped growing as a proportion of total exports.

Ouch! And there is plenty of other evidence to confirm this worrisome news:

• The recent WIPO global index, aggregating 79 performance indicators to assess innovation, ranks Israel at only 22nd.
• A similar index from Bloomberg has seen Israel slip from 5th to 11th.
• In an interview with the OECD’s leading economist, Claude Giorno, the respected analyst damned several key sections of the economy is being restrictive towards growth.

Not all is doom and gloom, as I had reflected last week. However, what is just as worrying is that Netanyahu’s government appears to fiddling while the city is starting to smoulder.

For example, yesterday the Prime Minister appeared at the High Court to justify the concessions to the gas companies. The fact of the matter is that they are the best of a bad deal, which is based on poor understandings of the potential revenues when first analysed a decade back. The rich will now get much richer.

And the other economic news of the day. A casino will be allowed in Eilat, another move to placate the rich, while maybe providing some local employment.

The analysis of the Ministry of Finance is a wake-up call, not just on behalf of the high-tech sector. Now is the time for Israel’s leaders to “lead”, utilising the skills of innovation to launch a significant economic strategy. However, I fear that political short-sightedness and individual egos will prevent them from carrying out what basic duty demands.