Consider Israel. According to data on NASDAQ’s website, Israel has more companies listed on the NASDAQ stock exchange than any other country in the world except the U.S., and major companies such as Intel, Microsoft, IBM and Google have major research and development centers in Israel. Why? If you look at the data, you see a correlation between this entrepreneurial activity and the investments in and outputs from Israel’s universities.
Israel is among a handful of nations with the highest public expenditure on educational institutions relative to GDP, and it has the highest rate of R&D investment relative to GDP in the world. It also has the highest percentage of engineers in the work force and among the highest ratio of university degrees per capita. Many of the companies listed on NASDAQ were started by graduates of Israel’s universities: Technion, Tel Aviv University, Weizmann Institute and Hebrew University of Jerusalem, to mention a few. Do international university rankings capture these economic impacts from research and postsecondary education in Israel? The answer is no. In spite of their tremendous impact and output, Israel’s universities are ranked somewhere in the 100 to 200 range.