State Comptroller slams gov't for Israel's AI lag

Israel's decline in international AI rankings is blamed on low priority, under-funding, amateurish management, lack of control, and a surplus of political bodies.

After an audit lasting seven months, and after the results waited on his desk for eight months before being released, yesterday afternoon the State Comptroller outlined the string of failures that led to the State of Israel falling behind in every important international measure of performance in artificial intelligence (AI). Behind the dismal situation in the management of this economic sector that will dominate every aspect of people’s lives in the coming years lies low priority assigned to it in the government’s agenda, under-funding, amateurish management, a shortage of control, and a surplus of political bodies dispersed among many government ministries. To a large extent, the State Comptroller’s report illustrates the way in which strategic matters have been dealt with this generation of Israeli governments.

State Comptroller Matanyahu Englman unleashed his criticism of government management of AI with controversial timing: on the eve of the setting up of an AI taskforce in the Prime Minister’s Office reporting to its director general Yossi Shelley, a function that currently exists in the Israel Innovation Authority and the Ministry of Innovation, Science and Technology. The way that the taskforce has been formed without the involvement of senior personnel in the Israel Innovation Authority and the Ministry of Innovation, Science and Technology, who have already formulated several strategic programs and will implement them at a budget of NIS 1 billion, arouses the suspicion among officials that the Prime Minister’s Office seeks to grab powers and budgets that currently belong to the professional entities.

Years of neglect and under-funding

Senior people in the technology industry are concerned that the prime minister wants to set up a new AI team to brand himself as the promoter of a hot technological area, and to form it within a ministry that has struggled to form other administrations in the past, such as those for the rehabilitation of the north of Israel and the Gaza border area; the National Security Council, which has been criticized for its lack of impact on the defense establishment, and has also been the subject of several investigations; the Regulation Authority; and the Alternative Fuels Administration. On the other hand, the Prime Minister’s Office and the Accountant General’s Office in the Ministry of Finance think that the Ministry of Innovation, Science and Technology, the Israel Innovation Authority, and the National Infrastructures Forum, which are dealing with the matter, have not proved competent in managing it, and that coordination of work in this area should therefore be taken away from them.

At any rate, the results speak for themselves: years of neglect and under-funding have led to Israel dropping in the main AI rankings. For example, in the Oxford Government AI Readiness Index, an annual assessment of the readiness of over 190 countries to incorporate AI into public services, Israel slid from 20th place in 2022 to 30th by the end of 2023. Israel is ranked between Saudi Arabia and the Czech Republic, with countries weaker than it in technology such as Malaysia, Spain and Luxembourg ranked way above it. In the Tortoise Media Global AI Index, the Global Innovation Index, and AIPRM’s index of public policy in this area, Israel has fallen back substantially. In the AIPRM ranking, for example, Israel is in 20th spot between Peru and Estonia, and is the only country among the top 30 that is classed as lacking a national AI strategy.

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The criticism is hurled at many entities, among them the Israel Innovation Authority, the Ministry of Innovation, Science and Technology, the National Infrastructures Forum, and the National Security Council, but it would seem that the changes of government, low prioritization, and amateurish management of strategic issues are the factors that led to the failure. As Englman puts it: "There is no justification for changes of government causing the halting of a program that has nothing to do with any political dispute and that has as its aim to take Israel forward in a global revolution that will become even more powerful in the coming years," he writes. "Israel has no long-term national strategy for AI. That being the case, it is no wonder that we have declined in the international rankings."

Things that went wrong in Netanyahu’s governments

The great challenge in coordinating a complex matter like AI is the many aspects to it, the infrastructure required, the many ministries involved, and the consequently large budget necessary. The government has to fulfil a mission of a kind to which it is not accustomed: coordinating aspects of long-term policy relating to physical national infrastructures, regulation and legislation, and aid to industry and to academic institutions. The prime minister’s team gives the cybersecurity taskforce as an example, but that has a specific mission of protecting national infrastructures such as Israel Electric Corporation and Mekorot. Besides this, the cybersecurity taskforce was established at the right time when the cybersecurity industry began to grow, and not in a situation like that of today when AI is an established fact and when another government body is dealing with it with a budget of NIS 1 billion approved by the same prime minister. In addition, there was stagnation in this area for years, and it came to life only in November 2022, two years ago, when ChatGPT was launched.

According to the State Comptroller, other than under the Lapid-Bennett government of 2021-2022, things did not work properly in government, under Benjamin Netanyahu. First of all, the State Comptroller says, there is no single government entity charged with leading a national AI program, despite what was agreed between Netanyahu and the National Security Council in 2019 and despite the fact that, in 2022, the government tasked the Ministry of Innovation, Science and Technology with preparing such a program. According to the State Comptroller, after the current Netanyahu government was formed, the Ministry of Innovation, Science and Technology did not act as decided by the previous government, and the program was not really implemented. "The ministry restricted itself to specific subjects within the AI field, and did not lead progress in it at a national level. The Ministry of Innovation, Science and Technology was not a coordinating government entity bearing overall responsibility, charged with formulating and leading a national program, pooling budgets, and controlling and supervising implementation of the program and its progress," the report states.

The State Comptroller basically says that the government approved a budget of NIS 1 billion to promote AI in the period 2022-2027 without approving a general national program. "The national program launched by the then minister of innovation (Orit Farkash-Hacohen, A.G.) in July 2022 remained a dead letter since it was not implemented after the change of government."

Thus it happened that many projects budgeted in 2022 have not been completed to this day: a supercomputer delayed until 2024; a language model in Hebrew and Arabic work on which began only at the end of 2023 at the initiative of the Directorate of Defense Research and Development ("Mafat") will not be launched before mid-2025; investment of only 40% of NIS 550 million of the NIS 1 billion budget allocated for spending by 2023. (The Israel Innovation Authority claims that this is an error, and that the program began with a one year delay, and that the full amount will be invested by the end of this year); and failure to absorb researchers by the Planning and Budgeting Committee of the Higher Education Council and the award of scholarships amounting to only 5% of its target, two items that the Israel Innovation Authority decided to divert to breakthrough scientific studies because of a lack of demand for scholarships. In addition, regulation in accordance with the European standard has not been advanced, but the National Infrastructures Forum apparently wants to wait with legislation in order not to depress innovation, and in general prefers the legislative model practiced in Australia, and to wait and see how legislation in this field develops in the US.

In response, the National Infrastructures Forum said in a statement on behalf of the Ministry of Innovation, Science and Technology, the Planning and Budgeting Committee of the Higher Education Council, the Directorate of Defense Research and Development, and the Ministry of Finance: "We feel that most of the conclusions presented in the State Comptroller’s Report do not reflect the true situation. Although the all the actions and processes that have taken place in the past few years in the framework of the national AI program were presented to the State Comptroller’s team, it Is not obvious that the facts have found expression in his conclusions. Israel is consistently ranked in the top ten in the leading international AI rankings, and our situation is considered to be excellent in comparison with that of other countries.

"We believe that the current program, with the existing administrative structure, the combination of participants, with the extensive investment of government resources, creates a stable and strong basis for performance in this area. We are committed to preserving Israel’s status as a global leader in AI, and to continuing to promote excellence in R&D, advanced infrastructures, and implementation in the technology industry and in government.

"It is important to point out that important steps such as the signing of the first international treaty in this area and other steps taken this year despite the war, together with the fact that thousands of technology companies are active in Israel that are implementing AI in a range of areas, are the main reasons for Israel’s high place in the global race."

Published by Globes, Israel business news - en.globes.co.il - on November 13, 2024.

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