, and since 2007, we have fallen from bis central bankers ’ speeches 26th place to 40th place in terms of the business environment. the decline in the ranking does not necessarily reflect an absolute worsening, but it certainly does reflect the fact that other countries have focused on improving their business environments, while we have remained behind. in a competitive world, the determining factor is obviously our relative position. it is also clear that wages which, in a competitive environment are consistent over the long term with labor productivity, can rise over time only if we do what is required to accelerate increased productivity and to expand it to all industries. the policy required to cope with the long - term challenges in view of the weaknesses that i have mentioned, which stand behind the fact that labor productivity in israel is increasing slowly and that its level is still significantly far from the forefront of the advanced economies, the directions that must be taken in order to accelerate and expand the increase in productivity are clear : it is worthwhile incentivizing and supporting the adoption of advanced technologies and technological improvements, particularly in industries that are typified by low technological intensity, whether in the manufacturing industry or in the services industries. due to the continuing decline in the chief scientist ’ s budget as a share of the state budget and of gdp, and in view of the high return on such support to the economy, it is worthwhile diverting budgets to such activity, while also involving medium and low technology manufacturing. professional training programs must be expanded, improved, and streamlined, with an emphasis on post - secondary frameworks. it is worthwhile expanding technological - scientific studies in the secondary schools, and supporting post - secondary technological studies, including those in technological colleges. achieving the required improvements in the business environment, while focusing on the main points of weakness, concerning bureaucracy in the fields of construction and real estate, in the legal environment, and so forth, should not be abandoned. infrastructure reforms, including in the electricity field and in the ports, as well as connecting manufacturing to the natural gas infrastructure, should be advanced. the implementation of a policy to improve manufacturing productivity in israel is the key for manufacturing to remain strong and to provide quality employment for all parts of the population in all parts of the country. bis central bankers ’ speeches

: a. inequality may be influenced by means of economic policy, including the education system. b. the relationship also depends on the origins of the growth, for example, the kind of technological progress on which the growth is based. as for the difference between reducing inequality and reducing poverty, we have to realize that poverty may decline even as inequality rises. this is happening, for example, in china. there may be a short - term substitution relationship between reducing poverty and reducing inequality. if such a relationship exists, then society has to decide where it wishes to be in the short term. i conclude by quoting remarks that my late friend, professor yoram ben - porath, wrote in 1986 in a book titled the israeli economy : maturing through crisis : “ the potential is there. israel has a reservoir of human capital and a scientific infrastructure that can be used to increase productivity and expand exports. its national determination, used to achieve political independence and self - defense, could also be harnessed to achieve economic independence. thus, economic maturity may still prove to be a starting point for a new phase of sustained growth ”. in fact, we are already on the right path. if we stay on it, we will be able to attain our potential fully and to take up a position alongside the most developed countries in the world.