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Israel, A Petri Dish of Innovation

An overview of Israel, its Economy, and its Startup climate.


Photo by Dennis Jarvis, 2016

ISRAEL

OVERVIEW


Located in the Middle East, Israel’s size is approximately 8,020 square miles, composed of approximately 7,850 square miles of land and only 169 square miles of water. The state borders Syria, Egypt, Lebanon, Gaza, and the Mediterranean Sea.


Demographically, the state is very diverse. Israel is composed of 74.4% Jews, 17.7% Muslims, 2% Christians, 1.6% Druze, and 4% other. Approximately 43% of the population is under the age of 24.


Industrially, Israel is involved in many sectors including high-technology products (including aviation, communications sector, computer-aided design and manufacturing, medical electronics, fiber optics), pharmaceuticals, construction, metal products, chemical products, plastics, and cut diamonds.


ISRAEL

ECONOMY


Economically, Israelis have benefitted from low interest rates over the past few years; their current rate 0.10%. GDP in 2017 was $315.6 billion. Annual GDP growth of approximately 3.5% is projected through 2018 and 2019. Growth has remained robust throughout the past few years, but inflation remains low -- CPI has actually decreased since 2010. With a steady decrease in the unemployment rate, rising wage pressures will are projected to lead to a steady increase of inflation. Q1 of 2018 has included strong public consumption in Israel; household spending and business investment were exceptionally vigorous due to a sharp rise in car sales in advance of a programmed change of vehicle taxation (currently almost 75%) in January 2019.


Startups in Israel are booming. For years, Israel has been dubbed “the startup nation”, and this term currently just as accurate as it has ever been. In 2017, Israeli startups raised more than $5 billion; in December of 2017, three startups (Sirin Labs, Insightec, and Lemonade) raised raised $100 million. A few weeks ago, six recently funded startups got attention from Forbes magazine. The start ups are: OrCam -- a wearable assistive technology device for the visually impaired, Moovit -- a real time transportation and mobility app, CommonSense Robotics -- AI/robotics for grocery fulfilment, Morphisec -- cybersecurity, SAM Seamless Network -- home network security, and MDClone -- health data analysis. Forbes states these six startups can incredibly large breakthrough/disruption potential, and have serious big-shot people involved.


Sources

The World Factbook, USA Central Intelligence Agency (CIA)

Trading Economics

Organisation for Economic Co-operation and Development (OECD)

Geektime

ISRAEL21c → IVC Research Center

Forbes

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