preface

3. OVERVIEW OF ISRAEL’S
HIGH-TECH INDUSTRY ∗
3.1. ISRAEL’S HIGH-TECH INDUSTRY - INTRODUCTION
The technology industry in Israel has been the driving force of the nation’s
economy, and has played a prominent role in Israel’s economic development,
particularly over the last decade. Only 25 years ago, most of the country’s
technology was concentrated in military/security-related industries. Although
Israel was not a major factor in the global hi-tech industry at the time, Israeli
companies at present have a significant foundation in hi-tech industries
worldwide and Israel ranks among the leading countries globally in the number
of Nasdaq-listed hi-tech companies.
Because the hi-tech sector became the primary engine for economic growth,
despite the recession in the early 2000s, its recovery in 2005 was vital in
bringing Israel’s economy back onto a sustainable growth path - reflected in a
boost in investments, recruitment of capital, cutback in unemployment, hi-tech
exports and corporate mergers – all of which have demonstrated precisely this.
Various indicators show that, after a slight rise in 2005, growth was sustained
in 2006 and 2007, marking an improvement in hi-tech. However, given the
credit crunch in 2008, the financial resources available for the hi-tech industry
have declined significantly, causing hi-tech and start-ups companies to lay off
employees or shut down completely. This trend continued during the first half
of 2009. However, in mid-2009 it became clear that the influence of the global
crisis on Israel was relatively mild. Consequently, the market started showing
an upward trend, which continued in 2010.
The Israeli high-tech market developed in 2010, as demonstrated by the
improvement noted in three significant indicators for market recoveries:
New jobs: This indicator is considered to be the most important one. It
should be noted that despite the upward trend commencing February 2009,
the number of new jobs has still not reached the pre-crisis level of end 2008.
Number of work offers received by job seekers.
Length of recruitment process (starting from applicant’s first interview with
a recruiting company, until the applicant actually signs an employment
agreement).
∗ This chapter is based on data gathered by IVC Research Center, January 2011
BDO Israel
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