Guest blog by Albeck Yair, LEG’23
While it seemed at the beginning of the program that we all in our working group are facing the same problems, along the program we have realized how different the solutions are, which highly depend on the particular context. That led me to the first takeaway, which is that problems are much more complex then as it seems at first glance, and therefore it’s difficult to copy-paste from external examples. As the program progressed, our areas of focus diverged.
Because of that, The PDIA approach is a strong framework. It pushes us to take doable actions rather than wait for the perfect conditions that never come, to build authority, acceptance, and ability along the way (which are completely different in different places), and create the relevant knowledge required in order to solve the complex problems that emerge during the process of actions and learning. Looking for external best practices for inspiration, or trying to figure out existing and latent practices or positive deviances are practical tools in this regard.
Identifying the underlying problem is the halfway to the solution – finding the binding constraint is essential to reach the solution that will ignite economic growth, and the tools we acquired during the program such as the PDIA toolkit, Fishbone diagram, and growth diagnostics are useful for that. These tools are not so complicated and easy to understand and operate, which makes them very practical.
The way to solve the lack of an ‘invisible hand’ in the activity of the public sector requires a decentralized approach, where the different agents in the system have the authority to pursue solutions under their responsibility. But in order to succeed connectivity is essential. Therefore, high-bandwidth organizations are crucial for leading economic growth, through the absorption of knowledge and broad collaboration with many other agents.
The world is complex, therefore many of our growth problems are complex, and as we have learned, the complexity of the economy is also the key to growth and prosperity. Therefore, I think that in order to lead economic growth one must embrace curiosity and modesty. Starting a growth process and a growth culture requires an open and learning mindset and not arriving in advance with a ready solution. Therefore, building state capabilities and leading economic growth requires leadership from different stakeholders, with diverse knowledge, who will be curious and humble to learn together and share the risks involved in the uncertainties of the process that will ultimately create solutions from the bottom up, instead of waiting for solutions from the top down.
Taking these takeaways to my economic challenge of the state of Israel, I believe that most of the acute problems for growth are well-known, and many think tanks and academics have already pinpointed the binding constraints for growth. However, while these organizations said what should be done, they naturally less focus on how to achieve the required changes. Although the responsibility is on the government, it seems that there are many initiatives that can be taken by the public sector employees at different levels and expertise, that can begin to solve small problems step-by-step, and when required, increase gradually authority and acceptance.
I have realized how much Israel’s growth problems derive from the lack of adequate supply of public goods like transportation and digital infrastructure, and too heavy bureaucracy and regulations that hinder private investments (or lack of vowels if we use the Scrabble game metaphor). Diving into each of these topics in my Fishbone Diagram led me to discover a new and complex world, with many challenges, a multitude of factors that need to be taken into account, many involved stakeholders, familiar practices from the world that have already tried to apply in the past and failed, and unclear ways to solve problems that seem very simple at first glance.
The metaphor of hippos in the desert led me to think about why in the beginning the high-tech sector succeeded where all other sectors failed. This, among other things, led me to focus on the regulatory burden that explains some of the differences between the high-tech sector and the other sectors in the economy.
Inclusive growth is the right way to overcome Israel’s problem, ramping up productivity in all sectors while expanding the participation in the labor market of less skilled workers would enhance economic growth and reduce inequality. Since we learned that the thing that matters is the diversity of know-how as a country and not just the level of education (it’s the spectrum of light, not just the intensity as Prof. Hausmann said), it means that even less skilled population, with different backgrounds, might contribute to Israel growth and increasing their own income by that.
Finally, the “Sense of Us” is an essential and fundamental basis for economic growth. In these turbulent days that the State of Israel is going through, with severe internal disputes, I think that leadership that knows how to set a common vision is necessary to solve our problems, and in particular to bring about inclusive growth. But for such leadership to be successful, we all need to adopt humility, understand that many problems are much more complex than the way we perceived them, and that by working together with people who bring their unique knowledge we all can do much better.
This is a blog series written by the alumni of the Leading Economic Growth Executive Education Program at the Harvard Kennedy School. 72 Participants successfully completed this 10-week online course in May 2023. These are their learning journey stories.