the impact of globalization on israel's economy, society and space israel regional science...

The Impact of Globalization on Israel's Economy,

Society and SpaceIsrael Regional Science Association meeting

Beer Sheva, 15.4.2008

Prof. Baruch A. KipnisThe University of Haifa

OUTLINES

Attributes of a globalized world Israel’s affiliation with the global economy The impact of globalization: Socio-Economic influences Spatial impact – a polarized spatial role of Greater Tel AvivDo we have a solution?

Prof. Baruch A. Kipnis2

What is Globalization?Globalization is the most usedused, the most misusedmisused,

and the most confused confused word….. (Dicken 2007)

The contemporary globalized world emerged during the mid 20th century, but it roots date back to late 19th century and even before

Globalization was made possible by the world’s sophisticated communication networks

Globalization reveals a polarized geography of production, distribution, Investment and consumption

Globalization encompasses many aspects of our lives: economy, social, culture, politics and other


The “Global Triad” - - the “Mega Markets” of the Global Economy


Source: Dicken, 2007

A polarized economy of the “Global TriadA polarized economy of the “Global Triad””


Source: Dicken, 2007

The Global Triad controls global production - - Industry, Producers’ The Global Triad controls global production - - Industry, Producers’ services and FIREservices and FIRE In 2004 the Triad produced 86% of the global GDP

The Global Triad controls the global commerce and distributionThe Global Triad controls the global commerce and distributionIn 2004 the Triad commanded over close to 86% of the global exports

The Global Triad assemble most of the ‘crisscrossing’ FDIThe Global Triad assemble most of the ‘crisscrossing’ FDIIn 2004 the Triad pulled 87% of the world’s FDI; it was the origin of 99% of the global FDI

Israel’s Involvement with the Global conomy?

Israel entered the Post Industrial age in late 1980s Early 1990s .

The post-industrial employs specialized producer services that help he post-industrial employs specialized producer services that help integrate the global centralized management , primarily of its global integrate the global centralized management , primarily of its global economic ventures. economic ventures.

Those who manage the global economy areThose who manage the global economy are:The ‘qinary’ sector qinary’ sector - - Decision making and ControlThe ‘quaternary’ sector ‘quaternary’ sector - - APS


The following factors have helped post industrial Israel to associate with the Global economy :

Israel’s human resources: its high educational capital the absorption, in the 1990s of over one million immigrants its high-tech IDF, and its defense industries and R&D facilities

Israel’s education, basic research and applied R&D infrastructure and institutions:

Seven Universities and a few public and private collegeshundreds of R&D laboratories and start-up firmsHigh level of investment in R&D - - in 2004 Israel invested 4.4% of its GDP in R&D, and

between 1995-2005 some $13.3 billions spent on new projects, one third is foreign capital


The following factors have helped post-industrial The following factors have helped post-industrial Israel to associate with the Global economy / Israel to associate with the Global economy / ContCont..

Israel’s advanced physical infrastructure systems: modern communication air and sea portsadvanced surface transport systems (rail system)

Geo-political and Geo-economic factors: the abolishment, since early 1990s, of the Arab boycott Israel as a ‘bridge country’ between EC and NAFTA

Israel’s spatial planning doctrine: since early 1990 a doctrine of ‘controlled concentrationcontrolled concentration’, aiming at large urban

agglomerations, was adopted (National Plan 31)


The Impact of The Impact of Globalization on the Globalization on the

Economy and Economy and SocietySociety


10

Annual Growth of GDP 1988-2007(percentages)

-2.0-1.00.01.02.03.04.05.06.07.08.09.010.0

2007200620052004200320022001200019991998199719961995199419931992199119901989

The Impact of Globalization on Israel’s - - National Accounts

Israel’s foreign trade: Israel balance of payments between 1990 – 2006: imports increased by 212% and exports

by 292%. In 1990 Import minus Exports was $3.4 Billions; in 2006 it was $1.1 Billions.

In 2006 Imports from the ‘Global Triad’ was 66% of Israel’s total. Exports amounted to 84%. Yet, trade with neighboring countries, the Palestinians included, was minimal. Its future potential is very small.

Increase in GDP Between 1990 – 2006 Israel’s GDP increased by 183% reaching $199 Billion.

GDP per/capita increased from $14,500 in 1990 to $27,950 in 2006.

According to IMD index, Israel’s competitive position in 2006 was 21 with 74.3 points out of 100, an improvement of three places compared to 2005.


Structural Changes in the GDP, in EmploymentStructural Changes in the GDP, in Employmentand in Occupationand in Occupation

Structural Changes in the GDP, in Employment and in Occupation

Between 1995 and 2006 the contribution of Israel’s business sector to the GDP increased by 58%. The most important contribution was that of the FIRE and APS

A recent Economic report informed that a committee headed by the Director General of the Ministry of Finance plans to initiate a policy aimed at making Israel’ a Global Financial Center, and a mediator between the US and Europe and between them to the Far East.

A significant increase also took place in the Communication industry, in commerce and hospitality services. The latter reflect the accelerating demand for leisure by of the “post-industrial” Israeli society


13

% %

IndustryChangeOccupationsChange

All employed67.167.1All employed67.167.1

Growing industriesGrowing industries Growing occupationsGrowing occupations

Finance and business services180.8180.8Unskilled labor367.6367.6

Commerce and food and hospitality services

108.9108.9Academicians

178.8178.8

Public and Community services8484Managers86.186.1

Transport, storage and communication77.977.9

Construction and public works67.167.1

Declining industriesDeclining industries Declining occupationsDeclining occupations

Electricity and water36.6Clarks61.1

Manufacturing21.7Sales and services57

Agriculture20.0-Free and technical55.2

Personal services59.3-Skilled in manufacturing29.6

Skilled in Agriculture33.2-

Structural Changes in Employment 1990-2005The structural changes in employment and occupation are essential for the

functioning of a globally oriented post industrial society .

Globalization and Inequality

Income disparities -- between 1990 and 2006 the income of the upper deciles increased by 50%. Income of lower and middle deciles declined.

Percentages of households below poverty line in Tel Aviv, Ramat Gan and Rishon Le Zion are below the national average; Net disposable income per standard person was higher than Israel’s average by 17% in Rishon Lezion and by 38% in Tel Aviv.


Globalization and Inequality Globalization and Inequality / Cont.

Industry and Occupational Inequality Hi-tech industry Hi-tech industry VSVS traditional industry traditional industry: The first increased its output and

most of its production is for exports; the latter is declining and its product is for the domestic market.

Structural modifications in occupation resulted in increase of the ‘quinary’ ‘quinary’ and ‘quaternaryand ‘quaternary‘ sectors as well as of ‘unskilled workers’, many are structurally unemployed, young persons and students, women, and new immigrants…


Globalization and Inequality / Cont.Spatial Polarization Israel experiences strong ‘polarizationpolarization’. The Nation’s ‘hard corehard core’ has upgraded its economy’

society and cultural assets. Slow ‘spreadspread’ has extended the spatial stretch of the ‘core area - - ‘from Hadera to Gederafrom Hadera to Gedera’ it is now ‘from Zichron [Yaakov] to Asquelonfrom Zichron [Yaakov] to Asquelon’ . Early spread processes have been observed in Haifa, mostly in hi-tech.

The trigger is the accelerated development of Israel’s rail network.

Commuters flows -- settlements along the rail line are major suppliers of labor, primarily of ‘white collar’ to the ‘hard core’.

Urban settlements next to train stations evolved into migrants’ preference nodesmigrants’ preference nodes. The most attractive ones are those located at rail connecting points between ‘direct’ and metropolitan lines, prominent are those in Tel Aviv (the hard core) and Binyamina.

The remote peripheries - - the Galilee and the Negev, evolved into the Nation leisure regions - -Israel’s “tzimer land”


Tel Aviv – A ‘World City’ Israel’s Anchor at the Global Economy

The Hard Core of Israel’s National Territory“Big Head of a Country with a Shrinking Periphery”

Strong restructuring of economic function, employment and occupations Strong internal spatial adjustments Changing Urban Skyline



Activity Nodes in Tel Aviv

CBD nucleiCCD nuclei


Tel Aviv 2000

TLA LOOPTLA LOOP

The Ayalon CBD nuclei

Tel Aviv Center of Culture – a CCD in Postmodern styleTel Aviv Center of Culture – a CCD in Postmodern style


Golda Meir Center of ArtGolda Meir Center of ArtThe Opera of Tel AvivThe Opera of Tel Aviv

Hakamerie Theater of Tel AvivHakamerie Theater of Tel Aviv

Tel Aviv Museum of ArtTel Aviv Museum of ArtTel Aviv central LibraryTel Aviv central Library

Tel Aviv Skyline


The coastal hotels

Ayalon and the Bursha

Greater Tel Aviv’s Control over Israel’s Economy, Society and

Culture

Tel Aviv-Yaffo 5.5% of Israel’s population

The rest of Tel Aviv Metropolis is 38.5% of Israel’s



Activity / AttributeIn Tel Aviv-Yaffo

(%)

In the rest of the

metropolis (%)

In the rest of Israel (%)

N

Head quarters of FIRELawyers’ officesLawyers servicing the Global economyAccountanting officesAdvertizing officesSpecialized physicians

703769293253

143316443716

163015273131

41012,501

2932,769

615380

Hi-tech firms (total) Software houses Communication

162224

545765

302111

630358140

Four and Five Star hotels53163142

Persons influencing in the economy (W)Women influencing in the economy (R) (W)Israel wealthy people $100 millions + (R) (B)

5834592238

2833276050

14331484

1105050

131131

Painters and sculptors (H)Stage artists and other linked to theater (H)

7689

2411

4,2001,134

Art galleriesRepertoire theaters

4853

115

4232

4713

24

RegionRegionVCVC in $000 in $000

between between 1995 - 20051995 - 2005

Israeli VCIsraeli VCForeign VCForeign VCIsraeli/ Israeli/ foreign foreign

ratioratio

Tel AvivTel Aviv4,824,9774,824,9773,190,5613,190,5611,634,4161,634,4161.9521.952

Rest of Metro Tel AvivRest of Metro Tel Aviv5,142,0435,142,0433,294,0383,294,0381,848,0051,848,0051.7821.782

Jerusalem994,314594,996399,3181.490

Haifa405,951336,30269,6484.829

Rest of Metro Haifa1,186,013698,474487,5391.433

Inter Metro regions456,363344,925111,4373.095

The Remote Peripheries256,704163,84092,8651.764

TotalTotal13,266,36513,266,3658,623,1378,623,1374,643,2284,643,2281.8571.857

Distribution of VC by Origin and Region in $000 (1995-2005)

Source: Schwartz and Bar-El, 2007

From polarized ‘Compact City’ Policy to a Spread ‘Polycentric City Network’ System

How could one get there???How could one get there???


The Impact of Israel’s Railroad Development

Number of Train Passengers 1995 - 2007 in million

34.0

28.726.8

22.919.9

17.515.1

12.79.2

6.45.65.14.8

0.0

5.0

10.0

15.0

20.0

25.0

30.0

35.0

40.0

2007200620052004200320022001200019991998199719961995

Year

Mill

ions

26

Rail Lines Development - - their Likely Catchments Areas and Their Latent Potential of Creating a Polycentric Region

Or a ‘City Dyads’ Along the Israeli Coast

Fan-shaped Catchments areas around Haifa and Tel Aviv the contemporary intensifying hard core of Israel’s ‘labor shedlabor shed’.

Jerusalem would intensify its role as complementary city with Tel Aviv when the new railroad line is operational.

Beer Sheva, at present part of Tel Aviv ‘labor shed’ will emerge as an independent core upon the completion of the Ashqelon-Beer Sheva line.

The region having the most promising potential to develop into a ‘City Dyads’ with Tel Aviv is Haifa. In this case Israel would have a ‘two anchors’ World City.


Thanks for your kind attention

the impact of globalization on israel's economy, society and space israel regional science...

Documents

global gdpthe global

global fdi

kipnisthe global triad

global conomy

global commerce

global triadprof

global economyprof

global exports