Tiny with few natural resources, Israel was forced to develop an export-based economy when it was founded in 1948. Now, 66 years later, Israel’s exports have enjoyed robust growth, driven in recent years by products and services resulting from scientific advances.
With a relatively minuscule domestic market and hostile neighbors, Israel was forced to develop a strong export-oriented economy early on. What seemed to be a near-impossible situation in the early days of the state has enabled Israel to develop a prosperous, advanced economy. In 1948, Israel exported a total of $6 million in goods and services, while in 2013, exports totaled $95 billion, representing a 16,000-fold increase in 66 years.
The numbers show steady growth in all areas of the export economy, with exports rising an average of 7.7 percent each year since 1990, when exports totaled $17.3 billion. Before 1990, Israeli exports were dominated by agricultural, industrial and electrical products, but since then services, including software, Internet and security technology, have become an important export sector. In 1990, products accounted for $12.7 billion of Israeli exports, growing an average of 5.5% annually to reach $61.7 billion in 2013. In the same period, service exports grew an average of 9% annually, growing from $4.6 billion to $33.1 billion.
Since 1990 Israeli pharmaceutical exports increased 48-fold – an average increase of 18 percent a year – from $140 million to $6.8 billion. Teva, one of the world’s leading pharmaceutical companies, is responsible for a significant part of that increase. In the same timeframe, exports of electronic components have risen 23-fold, from $200 million to $4.75 billion last year.
Not only have Israel’s exports increased impressively since its founding, but its export profile has changed too. Now Israel is better known for its tech products and services than for Jaffa oranges. This year, Asia is projected to become Israel’s second largest trading partner, supplanting the United States. Israeli entertainment is making inroads into America’s popular culture.
In light of the latter development, Benjamin Kerstein asked Could Israel become a Cultural Superpower? in the December 2013 issue of The Tower Magazine.
[Photo: Fritz Cohen / WikiCommons ]