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Global confidence in Israel’s economy

1.  In 2015, Israel’s high tech raised $4.43 BN, 30% over 2014. According to KPMG-Israel, Israel’s 2015 4th quarter economic performance ran contrary to – and was more positive than – the rest of the world. The value of exits through mergers and acquisitions and IPOs climbed to over $9 BN in 2015. The number of investment rounds of over $20 MN grew by 2/3 in 2015.  During the first three weeks of January 2016, twenty Israeli high tech startups raised almost $500 MN, mostly from institutional and private investors from the US, as well as from Asia, Europe and Israel (Economist Intelligence Unit, January 27, 2016).

2.  Israeli high tech companies “were sucking up a growing share of the world’s venture capital funding in the cyber area”: about 20% of global investment in cyber security, a 100% increase over 2014 and second only to the USA.  NY-based PrivoCo contends that Israel’s share (about $500 MN) was 12% of global cyber investments, but still up 100% over 2014 (Financial Times, January 26). Israel’s cyber technology startup, TowerSec, was sold to the Stamford, CT-based US giant, Harman, for $70 MN (Globes, January 7).

3. Unprecedented Chinese investments in Israel reflect China’s aim to shift from a highly manufacturing – to a high-tech – economy, and China’s assessment that Israel is indeed “The Startup Nation” (a best seller among Chinese movers & shakers; The Marker, January 1). Chinese investments in Israel surged from $70 MN in 2010 to $2.7 BN in 2015.  The China-Israel trade balance grew from $6 BN in 2009 to $11 BN in 2015.  During the first week of January, 2,000 Chinese and Israeli venture capital funds, businessmen, bureaucrats and political leaders participated in the largest-ever Chinese-Israeli conference held in Beijing. It highlighted Israel’s high tech cutting-edge technologies in the areas of biomed, biotech, health, cellular, clean-tech and computers at-large.

4.  According to the Economist Intelligence Unit, January 15, “Israel’s goods trade deficit shrank for the third successive year in 2015, declining by 43%…. Most of Israel’s exports are high technology and other goods that have not so far been adversely affected overall by the general decline in global trade and in commodity prices.”

5. Israel’s public debt-to-GDP ratio persists in its trend of reduction (Bloomberg, January 13): 64.9% in 2015, compared to 98.3% in 1995.  Israel’s government debt-to-GDP ratio was reduced to 63.4%. The budget deficit was 2.1%.  Between 2008 and 2015, Israel’s public debt-to-GDP ratio was reduced by 8%, compared with an increased ratio by the US (32%), Britain (37%), Japan (54%), South Korea (10%%), the Euro Bloc (25%) and the average advanced economies (26%).

6.  Dr. Adam Reuter, founder and CEO of Israel’s Financial Immunities Consulting and the Chairman of Reuter-Maydan Investment House, highlighted (January 12) Israel’s competitive edge in the global market:

*Unlike Israel, other advanced economies have exhausted their engines of growth, experience the crisis of the commodities and the burden of rapidly aging societies, which requires larger immigration of (mostly uneducated) populations which may pose a threat to homeland security and – in the long run – further burden social welfare services.

*Israel, a high tech powerhouse, has been sought by the emerging markets, which possess a high potential of growth and seek modern technologies.

*Israel stands to benefit from the high potential of growth – game changing innovations – in the areas of genetics, biotech, biomed, robotics, and nanotech, which has enabled Israel to defy the classic economic law of diminishing returns.

*Israel leads the advanced economies in the most critical area of growth projection: the size/trend/education of the 20-34 year old population, the prime innovator, risk taker, hard working, consumer, producer and defender (militarily). This age group, which is responsible for 40% of the economic growth, is shrinking in Europe and other advanced economies, but expanding in Israel. The fertility rate of those advanced economies – other than Israel – is less than 2.1 babies per woman, required to sustain the number of people, while the Jewish fertility rate in Israel is in excess of 3, trending toward 3.5 babies per woman.

*Israel’s exports have survived the recent global slowdown, by developing unique niches, which are essential to most countries in the areas of security, medicine, health, clean-tech, cyber, agriculture, irrigation, etc. 




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Straight from the Jerusalem Boardroom #248
https://bit.ly/3u29k9g

Foreign investment in Israel’s high-tech companies surged to new heights in the 1st quarter of 2021 – $5.7bn in 172 deals – which is up 89% over the impressive 4th quarter of 2020 and double the volume of the 1st quarter of 2020.

2020 was the first year of surpassing $10bn in capital raised by the Israeli high-tech sector from investors in the US, Asia and Europe, who trust the maturity of Israel’s brain power. Investments in Israeli companies more than tripled in six years, reflecting the effective response by Israeli startups to the technological, medical, pharmaceutical, educational, social and digital challenges posed by Covid-19.

Israel’s economic performance in defiance of Covid-19 is presented by Dr. Adam Reuter, the Chairman and Founder of “Financial Immunities,” Israel’s largest financial-risk management firm, and the co-author of Israel – Island of Success:

  1. Israel has led the globe in the rapid administration of Covid-19 vaccinations due to effective negotiations with Pfizer and an efficient, country-wide medical infrastructure.
  2. Israel is the second lowest among OECD countries in the number of Covid-19 deaths per number of Covid-19 cases: 0.7% compared to the 2.3% OECD average. Israel features a young population (median age of 30 compared to the OECD’s 42) and an effective country-wide medical infrastructure, including top level HMOs and hospitals.
  3. Israel is ranked 12th from the bottom among the 37 OECD countries in the number of deaths per million inhabitants: 645 compared to 1,145 OECD average.
  4. The International Monetary Fund’s 2025 GDP growth forecast for OECD countries: Israel – 4%, OECD average – 2.2%, US – 1.8%, Australia – 2.5%, Ireland – 2.6%, France and Canada – 1.7%, the UK – 1.6%, Germany – 1.2%, etc.
  5. Israel’s 2020 GDP was reduced by 2.5%, compared to the OECD average reduction of 4.1%, South Korea – 1%, Norway – 0.8%, Australia – 2.6%, US – 3.5%, Japan – 4.8%, Germany – 5%, France – 8%, the UK – 10% reduction, etc. GDP growth was recorded in New Zealand – 2.4% and Ireland – 3.5%.
  6. In 2020, Israel was ranked 20th among the 37 members of the OECD in terms of GDP per capita, featuring $43,000 (GDP – $408bn), ahead of Japan, Italy and Spain, and very close behind the UK ($44,000) and France ($45,000).
  7. Israel’s debt-to-GDP ratio increased from 60% in 2019 to 72% in 2020, compared to the OECD’s average increase from 66% to 82%. The 2020’s debt-to-GDP ratio was 266% in Japan, Italy – 161%, the US – 131%, Germany – 73%, etc.
  8. Israel’s foreign exchange reserves-to-GDP ratio of 41% (3rd among the OECD countries) attests to its financial stability, and Israel’s capability to raise foreign credit promptly in a cost-effective manner. Israel’s foreign exchange reserves in March 2021 – $186bn.
  9. During the past decade, Standard and Poor (S&P) accorded Israel a positive credit rating trend, unlike the negative trend for the G-7 countries. In 2020, notwithstanding Covid-19, Israel’s credit rating (S&P) remained at AA.
  10. Some 380 global high-tech giants operate in Israel, including Microsoft, Amazon, IBM, Intel, Cisco, Apple, Verizon, Applied Materials, Dell, HP, Kodak, Oracle, Philips, SAP, Medtronics, GM, eBay, GE, etc. Israel leads the world in the ratio of research and development investment to GDP: 4.9%. 85% of this investment comes from the business sector.

 




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