Despite current events, Israeli industry continues to succeed

Ministry of Industry and Trade
Investment Promotion Center
Foreign Trade Administration

Jerusalem, 30 October 2000

"I see no loss of interest on the part of US venture capital investors in Israeli start-ups" – Harvey Krueger, Chairman, Lehman Brothers, at a speech in New York, October 24, 2000 (as quoted in Globes, 24.10.00)

Despite serious political events in the region and unrest in the Palestinian areas, the Israeli economy remains strong whilst industry continues to produce formidable results.

Business in Israel Today

  • Israeli businesses, factories and companies are operating at full capacity, with 100% manpower, across the country.
  • Ports, communications, transport, power, water and all other forms of infrastructure are operating as normal and are not affected by the disturbances in the Palestinian areas.
  • Industries that rely on Palestinian employment have experienced a slow down. However, this problem is restricted to the areas of agriculture and construction. Plans are currently underway to ensure that unemployed Israelis fill these positions.
  • Overall, Palestinians comprise only 1% of the Israeli industrial workforce and are not found in the hi-tech sector at all.

    The Hi-tech Sector

  • The hi-tech sector remains unaffected by the current disturbances. This sector is strong and thriving.
  • There are around 4,000 high tech companies in Israel. The largest concentration in the world, outside of California.
  • Approximately 2-3 new hi-tech start-ups are established in Israel every day, (including since the current disturbances began).
  • The first 6 months of 2000 saw $3.2 billion invested in Israeli VCs, more than double the amount for all of 1999 (which was itself a record year).
  • The vast majority of marketing and sales activities of Israeli hi-tech companies take place outside of Israel.
  • According to a Goldman Sachs report (15.10.00) "As far as Israeli technology is concerned, the security situation has had no special impact… R&D activity, which is mostly based in Israel, is not affected by events, because R&D centers are located far from the flashpoints."

    Growth Will Continue

  • History has shown that the path to peace has many upswings and downswings. Despite this, the Israeli economy has continued to grow and expand even during times of conflict. There is no reason to believe that the current problems will affect Israeli industry.
  • Rating agency Fitch, who reaffirmed Israel’s credit rating, in a report entitled "Sovereign ratings implications of the Middle East Crisis" concluded "under a reasonable worse case scenario, the crisis is not likely to fundamentally derail the performance of the Israeli economy." (as reported in Globes, 24.10.00).

      

     Despite current events- Israeli industry continues to succeed-30-Oct-2000
     Despite current events- Israeli industry continues to succeed-30-Oct-2000
    Ministry of Industry and Trade – Investment Promotion Center
     Despite current events- Israeli industry continues to succeed-30-Oct-2000
    Outbreak of Violence in Jerusalem and the Territories – Sept/Oct 2000