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Ministry of Foreign Affairs
Media and Public Affairs Division
Information and Visual Media Department
Director: Mordehay Rodgold
Project Managers: Ariella Charny and Michal Gur-Aryeh
Executive Manager: MGS Language Services
Creative and Project Manager: Visual-Trigger
Design: Hashchuna
Content Research: Maof Creative
Writing: Yoav Fisher
FACTS ABOUT
ISRAEL
GLOBAL, OPEN AND ROBUST 2
DIVERSE SECTORS 6
THE START-UP NATION 10
4
GLOBAL, OPENAND ROBUST
The Economy | Global, Open and Robust
Israel's economic miracle is the story of an economy built essentially from scratch, surviving numerous crises, and emerging as a global, high-tech powerhouse. What it lacks in natural resources, it makes up for with its human capital, and the creativity and determination of its people. With a highly educated workforce and adaptive policies to stimulate innovation, Israel has created a marketplace that is robust, open, and highly integrated.
Following the global financial crisis in 2008, as leading economies faced downturn, Israel proved its unprecedented stability and economic strength. Increasing GDP per capita, decreasing debt, stimulating current account surplus, and reducing unemployment,Israel weathered the recession with astounding resilience.
Today, the Israeli economy isflourishing; it is diversified, service-oriented and export-driven
The high-tech sector continues to thrive, accounting for over 11% of GDP – more than that of any other OECD country – and is backed by robust governmental investment in R&D. Israel is a heavyweight in a variety of industries, including cyber, med-tech and ICT.
Like all modern economies, Israel is not without its challenges. The government is continuously striving to maintain a healthy workforce, to bridge socio-economic gaps, and to remaincompetitive in the global marketplace.
s
s
Israel’s economy has consistently grown over the last decade.
Main Economic Indicators (2016)
GDP growth rate
2.8%
GDP/ CapIn thousands
Unemployment
34.3USD
4.4%
Inflation
-0.7
Current account balance to GDP
6.3%
Credit rating
A+
Economic Stability Since the 2008-09 Economic Recession
-6.0%
6.0%
8.0%
-4.0%
4.0%
-2.0%
2.0%
0.0%2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Israel OECD
Foreign Direct Investment Israel is a prime destination for Foreign Direct Investment. FDI quickly recovered after the 2008-2009 bubble, and accounted for 4.5%of GDP in 2013, well above the OECD average of 1.4%.
FDI inflow $M FDI inflow % of GDP
1995
1996
1997
1998
1999
200
0
200
1
200
2
200
3
200
4
200
5
200
6
200
7
200
8
200
9
2010
2011
2012
2013
$2,000
$ 0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
6.0%
7.0%
8.0%
9.0%
$4,000
$6,000
$8,000
$10,000
$12,000
$14,000
$16,000
$18,000
View above Tel Aviv and Ramat Gan
6
Unemployment rate among select OECD countries, 2016
Israel has one of the lowest unemployment rates in the world
6.5%Chile
5.7%Australia
4.4%Israel
11.6%Turkey
4.6%switzerland 3.6%
Korea 4.7%United States
The Economy | Global, Open and Robust
Did You Know? Israel is home to the world's largest diamond exchange, which incorporates some 2,800 diamantaires members in the trading, cutting, marketing, brokerage, import and export markets. The Diamond Exchange District in Ramat Gan houses the world's largestdiamond trading floor.
In September of 2010, Israel became the 33rd country to join the OECD – a testament to the country’s successful transition from a developing to a developedeconomy.
Imports and Exports, 2015
Imports
Israel maintains diversified trading relations acrossthe globe
Exports
27% EU
27% NorthAmerica
25%Asia
21% AllOthers
Isra
el 1
9
Jap
an 1
7
USA
10
Gre
ece
29
Ital
y 26
Ger
man
y 4
Arg
enti
na 4
5
Rus
sia
49
No
rway
1
Human Development Index Israel ranks 19th in the world on the Human Development Index, a composite statistic of per-capita income, education and life expectancy.
HD
I val
ue
47% Europe
14% NorthAmerica
29%Asia
10% AllOthers
8
Fash 90
DIVERSE SECTORS
Israel's economy evolved rapidly from primary (agriculture) and secondary (industry) sector-driven to service-driven. Today, it is more competitive and export-oriented then ever, powered by a highly skilled workforce, an outward focus, and increased global integration.
In the first two decades of Israel’s existence, three main sectors dominated – agriculture, textiles, and chemicals. Israel’s transition into a modern economy was characterized by the expansion of higher education, the integration of new immigrants into the workforce, the continuous effort to build trading relationships across the globe, and government support for R&D. Its market has grown with increasedprivatization and liberalization since the early 1990's.
Israel’s economy is driven by “value-added” industries in services and high tech. Israeli companies excel globally, particularly in ICT (Information and Communication Technology), med-tech, fin-tech, agri-tech, cyber, semiconductors, aerospace, defense technologies and other fields. Israel ranks third in the world the number of companies it has listed on NASDAQ, and many of its largest companies are traded on the Tel Aviv Stock Exchange.
The Economy | Diverse Sectors
Orchards in the Arid Israeli south Tamar Gas Field
Tamar Gas Field
Natural Gas Israel was traditionally an importer of energy sources; however, significant reservoirs of natural gas were recently discovered in the Mediterranean Sea off the coast of Israel. The discoveries of the Tamar (2009) and the Leviathan (2010) natural gas fields have given Israel the opportunity to become energy-independent, reduce the need for coal, and develop a newsector in natural gas exportation.
2019
2025
2031
2015
2021
2027
2017
2023
2029
0%
10%
30%
20%
40%
50%
60%
70% Natural Gas Coal Renewables
The late President Shimon Peres examines the touchscreen computer Pixelsense used for space research at MicrosoftCorporation in Raanana, central Israel I Flash 90
Projected energy source for electricity (% of total production)
10 The Economy | Diverse Sectors
Domestic Product by Industry 7.1% Human health and social work 3.2% Arts, entertainment and recreation 11% Housing 1.1% Agriculture 11.4% Manufacturing 1.70% Electricity and water 6.3% Construction 12.4% Wholesale & retail 1.9% Transportation and storage 10.8% Information and communication 20.4% Financial; real estate; scientific & technical 5.9% Public and defenceadministration 6.7% Education
% Domestic product by sector
70.6% Services 22.2% Industry 6% Construction 1.2% Agriculture
Domestic Product (2015)
Manufacturing Exports by Tech Classification ($M)
1995
1996
1997
1998
1999
200
0
200
1
200
2
200
3
200
4
200
5
200
6
200
7
200
8
200
9
2010
2011
2012
2013
2014
$$5,000
$10,000$15,000
$20,000$25,000$30,000$35,000$40,000$45,000$50,000
IT, Scientific, Professional and Finance Services as Percent of GDP
Knowledge and skill-intensive sectors of the economy, like IT and professional services, have quickly become the hallmarks of the Israel economy.
1995
1996
1997
1998
1999
200
0
200
1
200
2
200
3
200
4
200
5
200
6
200
7
200
8
200
9
2010
2011
2012
2013
2014
2015
15.0%
250%
30.0%
20.0%
35.0%
High + Medium High Medium Low + Low
Israeli industry has evolved from small and mid-sized companies that engaged primarily in agricultural products and textiles,to a global, high-tech industry
Packaged medicines, including antibiotics, penicillins, hormones, and other medicaments, represent 9% of Israeli exports and are valued at over 3.86 billion dollars. Israeli market leader Teva Pharmaceuticals, one of the largest generic drug manufacturers in the world, is responsible for one out of every eight generic drugs sold in the United States. In 2017, American pharma company Gilead bought Israel’s cancer-treatment company Kite Pharma for 11.9 billion dollars.
Manufacturing Exports and Imports by Technological Intensity, 2015
Manufacturing export was 45 billion USD (42% pf the total revenue in manufacturing), and consisted mostly of high-tech products.
High technology
0
10
20
5
15
25
Medium-high technology
Medium-low technology
Low technology
Import Export
Israeli scientists at Regentis Biomaterials developing GelrinC for the repair of focal defects in cartilage and osteochondral defects
12
THE START-UPNATION Israel, recognized as the Startup Nation, has more startups per capita than any other country, and an entrepreneurial environment backed by a strong Venture Capital sector. Tel Aviv with the surrounding metropolitan area is known as Silicon Wadi, and is ranked as the 5th best startup ecosystem in the world,and the top non-US location, according to the 2015 Global Startup Ecosystem report by Compass. Numerous Israeli companies have been acquired by global corporations, while leading multinational enterprises continue to open innovation and R&D centers across the country. There are over 250 international corporations with offices in Israel, including Google, Intel, Microsoft, Facebook, and Apple, as well as time-tested companies like General Motors, Bosch, and Barclays.
The Economy | The Start-up Nation
Tech Exits
Over 250 Multinational Corporations with R&D Centers in Israel (by Country), 2015
Israeli high-tech exits (M&A, IPO, VC-backed), outperform industry averages, drivenby continued confidence in Israeli companies.
International companies like Google, Nestle, Intel, Tata, and Xiaomi have all chosen to be part of the Israeli high-tech ecosystem.
66% US
6%UK
5% Germany
4%Switzerland
3% France
3%Canada
13%Other
0
4
8
2
6
10
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Exit Amount $B # of Exits
Self-Driving Cars Mobileye, an Israeli technology company that develops vision-based advanced driver-assistance systems (ADAS) for collision prevention, was acquired by Intel in 2017 for 15.3 billion USD, in the largest tech exit in Israeli history. Mobileye technology is currently in use for developing autonomous cars.
R&D as Percent of GDP (2017)
5.0%
4.5%
4.0%
3.5%
2.5%
2.0%
1.5%
1.0%
0.5%
0.0%
S.K
ore
a
Isra
el
Jap
an
Finl
and
Swed
en
Den
mar
k
Taiw
an
Aus
tria
Ger
man
y
Bel
giu
m
Slov
enia
OE
CD
Ave
rag
e
Fran
ce
Chi
na
Czec
h Re
publ
ic
Net
herl
and
s
Icel
and
No
rway
Ziv Aviram, CEO, Mobileye
IIVC Research Center
14
Exits by Sector, 2012-2016 (averages)
Source for R&D expenditure
Internet companies led exits in 2016, with 55% of total exits in 144 deals valued at 9.5 billion USD
Total business R&D expenditure totaledover 12.5 billion USD
The Economy | The Start-up Nation
R&D in the Business Sector, by Industry (2014)
Civilian R&D in Israel receives support from alarge pool of sources.
40% Private
13%General Government
27%Communications
24% Enterprise software/IT
20%Internet
13%Life Sciences
35.7%Software
35.2% Scientific R&D
6%Pharmaceuticals
5.9% Measuring & testingequipment
4.9% Communication equipment
10% Semiconductors
2%Cleantech
3.9% Other
2%Private Non Profit
46%Foreign
2.8% Irradiation, electromedical, electrotherapeutic and surgical equipment
2.1%Electrical equipment
7.4%Other
IVC Research Center
Leading multinationals, start-ups, investors, experts and clients at the Cybertech Israel Conference and Exhibition in Tel Aviv, 2017 I Flash 90
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