Long-Term Confidence in Israel’s Economy

1. Israel’s economic growth during the last five years (21%) is higher than all OECD countries, other than Turkey. Israel’s economy grew 270% during the last 20 years, while Israel’s population grew 145%. Israel’s unemployment is the lowest ever – 5.4%. The strength of Israel’s exports is derived from its multitude of companies, diversified technologies and products, reaching diversified markets, cutting edge technologies, focusing on essential products (medical, telecommunications, Internet, water technologies, energy alternatives, homeland security, defense), preferring high tech over raw material, expanding joint ventures with global giants, bolstering research & development (world leader in percentage of GDP). Israel is expected to become a net-exporter of natural gas by2018. Israel’s economy receives a tailwind from an annual Aliya (Jewish immigration), reduced emigration, accelerated return by expatriates, an expanding young population (especially due to rising fertility rate of the secular sector), a growing integration of the ultra-orthodox community in Israel’s workforce and military service and a potential of a dramatic wave of Aliya due to economic, political, security and social circumstances in the former USSR, France, England, Argentina and the USA (Adam Reuter, Financial Immunities, March 14, 2012).

2. Intel’s exports from Israel – $2.2BN in 2011. Since 1999, Intel’s exports from Israel total $22.5BN (Globes Business Daily, March 19). Intel employs 7,800 persons in Israel – 10% of Intel’s global manpower. 700 were hired in 2011, projecting 600 more in 2012. Abbott Laboratories – which acquired Israel’s SrarLims in 2010 – concluded a 3-year cooperation agreement with Israel’s Weizmann Institute (Glboes, February 7).

3. Credit Suisse reported a 5.35% holding in Israel’s $12BN CheckPoint – $643MN (Globes, February 10). Virginia-based Tamro Capital Partners and San Francisco-based Parnassus Investments announced a 5.9% and a5.7% holding in Israel’s Ceragon – $18MN and $17MN respectively (Globes, February 10). The NJ-based Avaya acquired Israel’s RadVision for $230MN (Globes, March 16). The $21BN Broadcom acquired Israel’s BroadLight for $200MN- Broadcom’s 10^th acquisition of an Israeli company in 10 years (5^th since 2009), leveraging the top quality Israeli human resource: innovations, which are transformed into cutting-edge technologies, manufacturing lines and exports. Broadcom has intensified its Israel operations during the last two years (Globes, March 21, 2012). Goldman Sachs acquired 10% of Israel’s Viola Group fro $200MN (Globes, February 22). The NYC-based W Capital Partners acquired, from Yozma VC Fund, 3% of Israel/US Conduit for $39MN (March 19).

4. San Francisco-based Koshla Ventures and Burrill & Co. and Menlo Park-based Triple Point led a $30MN round by Israel’s HCL-Virdia (Globes, March 8). France Tlcom, the French Publicis Groupe and Iris Capital co-led a $15MN round of private placement by Israel’s MyThings, joined by Silicon Valley’s Accel Partners and Deutsche Telecom investment arm T-Venture (Globes, March 21). The Boston-based Spark Capital led a $15MN round by Israel’s eToro (Globes, March 14). A West Coast investment bank led a $13MN round by Israel’s Vascular Dynamics (Globes, March 8).

5. 2011 mergers & acquisitions of 85 Israeli high tech companies (27% increase over 2010) – $5.1BN, the highest sum in 10 years, except the 2006 bubble ($11BN).

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

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

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.
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.
Israel is ranked 12^th from the bottom among the 37 OECD countries in the number of deaths per million inhabitants: 645 compared to 1,145 OECD average.
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.
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%.
In 2020, Israel was ranked 20^th 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).
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.
Israel’s foreign exchange reserves-to-GDP ratio of 41% (3^rd 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.
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.
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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