The best and the brightest have just smartened up to the fact that working 18 hours a day to make somebody else rich isn't the smartest career move. The days of making a good living in an Israeli Hi-Tech company are long gone. Everyone in Israel knows that Hi-Tech workers will be laid-off and unemployed by age 45 if you're lucky - with no pension. Those who chose the path of a Military career would have retired with a full pension at age 43, earning 2% of their gross salary for every year of service for the rest of their life.

...how programming is INTRINSICALLY more valuable a skill than operating an offshore natural-gas rig? We also import workers for that. Learning to run a LNG liquifaction plant gives you MUCH more alternatives in the world labor market than programming a new Dating app.

Well , you forgot to include in your article , that great and good people , at age of 45 ( at the maximum ) , is fired without merci , just because they are "OVER QUALIFIED" , or are changed for someone younger , with half the salary .
A long time ago , in many countries in Europe and North America , they change this and KEEP the "OLD" guys , because they have a lot of experience , and have the motivation to prove it . In Israel , there is no signs that this will happen in the near future ...

The simple REALITY is that talented humans have LOTS of options, which is why so many humans have moved to places like San Francisco, London, New York, etc. That is, humans go where they are appreciated and rewarded for their talents. Long ago the companies in SF learned that their most valuable assets walked out the door at the end of every work day and if they were not treated well, they never came back. In REALITY, Israel has very little to offer most talented humans - high cost of living coupled with low salaries, discrimination against non-Jews (and even some Jews) and the possibility of massive combat action at any time. Why choose that when the USA, Canada, Europe, and Asia all offer much better living conditions? Israel is competing on a global labor market and has little to offer. But I suspect that your leadership already knows this but has no desire to make the massive political and sociological changes that would be need to fix the problem.