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2017 Annual Assessment

Even though Jewish and Israeli economic activity remains resilient, there are signs of economic segmentation in Israel and possible threats to Jewish economic activity in the Diaspora. In light of these factors, we are leaving the material resources gauge unchanged.

 

Positive Factors

  • Israel’s economic growth is steady, aided by domestic demand and improved export performance at the end of 2016 while maintaining a sound macroeconomic balance.
  • Israel’s hi-tech sector continues to be a world leader:
    • With more than 3,500 high-tech companies and start-ups, Israel has the highest concentration of high-tech companies in the world (apart from the Silicon Valley).
    • Israel is ranked #2 in the world for venture capital funds right behind the United States.
    • Israel leads the world in the number of scientists and technicians in the workforce, with 145 per 10,000, as opposed to 85 in the U.S., over 70 in Japan, and less than 60 in Germany. With over 25 percent of its work force employed in technical professions. Israel places first in this category as well.
    • Israel produces more scientific papers per capita than any other nation by a large margin – 109 per 10,000 people – as well as having one of the highest per capita rates of patents filed.
  • Indicators of Arab participation in Israel’s work force and in skill training continue to increase.
  • Increases in perception of anti-Semitic currents surrounding large
    Diaspora communities do not appear to have affected wealth creation within those communities nor affected allocation toward Jewish community institutions and interests.
  • Similarly, despite indicators of generational change also affecting the natures of Diaspora community philanthropy, large changes in giving toward Jewish causes have not yet appeared.

Negative Factors

  • Strong consumer demand in Israel may have been occasioned by impending changes in regulations with resulting indications of declining consumer confidence.
  • Israel’s hi-tech sector remains its principal engine of growth but is limited by the supply of adequately trained personnel, thus raising concerns about its sustainability.
  • Educational access and achievement, differentials in wealth, and protectionism in domestic markets remain areas of policy concern.
  • Israel’s continuing housing crunch puts a squeeze on the young and those in the lower and middle portions of the income distribution, with effects going beyond issues of housing alone.
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