The Economist published an article by PM Benjamin Netanyahu in its supplement – “The World in 2018”. The article states that Israel is seizing the future through it’s innovation. Despite being a small country with only 8.5 mn population, Israel has more companies on NASDAQ than almost any other country outside North America. The article goes on to highlight that Israeli startups receive nearly 20% of global private investment in cyber-security and the country recycles 87% of its waste water, five times more than the runner-up. Israeli cows produce more milk per animal than those of any other country.

As rightly mentioned in the article, people across the world benefit from Israeli innovations in their mobile phones, car navigation systems, life-saving drugs, medical devices—even the cherry tomatoes in their salads. Furthermore, Israel’s intelligence services have helped stop many of terrorist attacks in different countries.

According to the Prime Minister Netanyahu, Technology alone cannot take anyone very far unless there is existence of free markets. Under a policy he calls “Fat man/Thin man”, the Israeli Government has put the public sector on a strict diet and removed barriers to competition that hampered the private sector, enabling it to sprint forward.

The Israeli Government controlled public spending, lowered tax rates, reformed welfare and pensions, removed foreign-exchange controls, dismantled monopolies, privatised government companies and created new capital markets. The result has been 14 years of nearly continuous GDP growth of 4-5% annually, lowering the debt-to-GDP ratio from roughly 100% to 62%.

Talking about offshore gas deposits worth many billions of dollars, the Prime Minister notes what government companies could not find in 50 years, private companies found easily once the government encouraged them. The government’s take of these gas revenues will help fund our future needs in education, welfare and infrastructure.

Related to the Auto industry he mentioned that 50 years ago, Israel failed in its effort to develop a car industry. Yet in the past decade Israel has 500 startups in automotive technology which receive billions of dollars of investments each year. In 2013 Google bought Waze, a crowd-sourcing navigation system, for $1bn. In 2017 Intel paid $15bn for Jerusalem-based MobileEye, entrusting it to oversee Intel’s worldwide autonomous-vehicle businesses. Israel’s universal digital health database holds great promise for breakthroughs in preventive and personalised medicine.

He goes on to state that since technology alone does not guarantee the future, there should be continuous promotion of entrepreneurship and fighting of excessive regulation. In the past two years Israel has moved from 27th to 16th in the Global Competitiveness Index.

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Posted by:

Chandreyee Ghatak

Trade Officer

Embassy of Israel