israeli consulate

Promoting Israel’s Trade Globally

An Overview of the Israeli Economy

Ari RokniDirector of Business & Trade Development

December 7, 2012

Welcome to Israel

Israel’s Competitive Edge

1st in the world for flexibility and adaptability 1st in the world for scientific research

1st in the world for entrepreneurship

1st in the world for information technology skills

1st in the world for expenditure on R&D (as % of GDP)

2nd in the world for innovative capacity

2nd in the world for venture capital

4th in the world in utility patents per million population

Israel’s Main Economic Indicators

Source: Investment Promotion Center

**Estimated

Criteria2006200720082009 2010 2011

GDP (current prices in GDP (current prices in $B)*$B)*

144.0B$164.1B$191.8B$193.1B$ 204.6B$214.2B$

GDP Real Growth Rate (%)GDP Real Growth Rate (%)5.2%5.4%4.0%0.7%4.8%4.7%

GDP per Capita (PPP)** GDP per Capita (PPP)** 24,271$26,226$27,355$27,054$29,602$$31,005**

GDP per Capita Growth GDP per Capita Growth Rate Rate

(%, Current prices)(%, Current prices)3.3%3.5%2.1%-1.1%2.9%2.8%

Exports Exports (Goods & Services)((Goods & Services)(As %of As %of GDPGDP))

62.6B$(43.5%)

71.2B$(43.4%)

80.4B$(40.3%)

67.9B$(30%)

87.7B$(42.9%)

91.9B$(42.9%)

Imports Imports (Goods & Services)((Goods & Services)(As %of As %of GDPGDP))

62.2B$(43.2%)

73.5B$(45.1%)

84.3B$(42.2%)

63.1B$(29%)

82.3B$(40.2%)

91.0B$

Unemployment RateUnemployment Rate8.4%7.3%6.1%7.4%6.6%5.7%

Israel’s International Trade - 2011

Export of Goods 91.9 Billion $

Imports of Goods 91.0 Billion $

*Using a public exchange rate of 1USD=3.6NIS (2011 average)

Israel’s Free Trade Agreements

Existing:

EU

USA

EFTA

Turkey

Mexico

Canada

MERCOSUR

63% of Israel’s Trade in 2009

Under Examination:

India

South Korea

Chile

Ukraine

6% of Israel’s Trade in 2009

Main Trading Items

Israeli Exports

Israeli Imports

Key Industries

Software1,000Cisco

Capital Equip.1,000Applied Materials

Telecom1,000Motorola

Software 600Microsoft

Semiconductors 570Freescale

Software 800SAP

Computing Equip1,100IBM

Capital Equip5,000HP- (Indigo & Mercury)

Semiconductors5,400Intel

SectorNo. of EmployeesCompany

Samsung 100 Semiconductors

Global Center for R&D

Multinationals in Israel

• Microsoft built its first R&D facility outside the US in Israel

• Veolia partnered to operate one of the largest RO Desalination plant in the world.

• Cisco built its first R&D facility outside the US in Israel

• Motorola’s Israel facility is the company’s largest development center worldwide.

• IBM chose Israel for its first VC investment outside of the US

• Intel has 4 R&D facilities and 2 manufacturing centers in Israel, employing 7,000 Israelis

• Google opened 2 R&D centers in Israel

Economic Incentives

Office of the Chief Scientist (OCS)

• Global Enterprise R&D Cooperation Framework

– Joint R&D projects between MNCs and Israeli companies, authorized by the OCS, could be entitled to financial assistance with the Israeli company’s R&D approved costs.

• BIRD Foundation (Israel-US Binational Industrial Research and Development)

– Offers conditional grants for joint development projects on a risk-sharing basis. BIRD funds up to 50% of each company's R&D expenses associated with the joint project.

• Technology Incubator Program

– Up to 85% of early stage project costs

• Investment

– Offers tax benefits for 10 years and investment grants to foreign companies

Matchmaking & Access to the Israeli Industry

• America-Israel Chamber of Commerce (Chicago)

• Federation of Israeli Chambers of Commerce (Israel)

• Israel-America Chamber of Commerce (Israel)

• Israel Export & International Cooperation Institute (Israel)

• Government of Israel Economic Mission to the Midwest

Thank You