Presidium of Israeli Business Organizations Manufacturers - PowerPoint PPT Presentation

The Cyprus Investors Show 2015 Dan Catarivas Manufacturers Association of Israel (MAI) November 2014

Presidium of Israeli Business Organizations • Manufacturers Association of Israel • Federation of Israeli Chambers of Commerce • Association of Contractors & Builders in Israel • Farmers’ Federation of Israel • Association of Banks of Israel • Israel Diamond Manufacturers Association • Israel Hotel Association • General Association of Merchants in Israel • Association of Life Insurance Companies of Israel • Association of Craft & Industry in Israel • National Federation of Trade in Israel • Cinema Owners Association in Israel • Israel Federation of Independents’ Organizations – LAHAV • Association of Security Enterprises in Israel • Israeli Cleaning & Maintenance Union

Manufacturers Association of Israel (MAI) Established in 1921 An Independent private organization Self-Financed Israel’s largest and most influential economic organization Largest employers’ organization, representing 90% of the industrial output President of MAI is also the Chair of the Presidium of Business Organizations (FIEO) “The Voice of the Industry”

Manufacturers Association of Israel (MAI) President Director General D i v i s i o n s Environment & & International Communications Administration Foreign Trade Labor & HR Economy & Regulatory Finance & Economic Medium Factories Research Small & Relations Health Policy Electronics, Building Textile & Chemicals, Metal, Electrical Food Kibbutz Information & Materials & Pharmaceutics & Infrastructure Fashion Software Consumer Industries Industries & Cleantech Industries Industries Industries Goods S u b - A s s o c i a t i o n s Jerusalem Haifa Branch Southern Branch Branch

The Israeli Economy 2013 Facts & Figures  GDP ($ Billions) 292  Population (06/2014, Millions) 8.2  GDP per Capita ($) 37,035  Foreign Trade (% of GDP) 77%  Total Exports (% of GDP) 38%  Unemployment (5/14) 5.9%  Business Sector Share in GDP 74%  Industry Share of Business Sector 21%

The Israeli Economy Main Characteristics xport Orie nte d G r o w t h  E  Adva nc e d T e c hnolog y Orie nte d  Hig h Skille d Huma n Ca pita l  E ntre pre ne uria l Culture  Inc e ntive s for R&D & Inve stme nt

A High Growth Developed Economy Growth in Selected Developed Economies 2013-2014 4.0 4 3.4 3.2 3.2 3.0 3 2.8 2.6 2.6 2.5 2.4 2.2 2.0 1.9 1.9 2 1.7 1.5 1.5 1.4 1.3 1.2 1.0 2014 0.9 1 2013 0.5 0.5 0.4 0.3 0 -1 -1.2 -1.8 -2 Source: OECD

A High Growth Developed Economy Average Growth in Selected Developed Economies 2009-2013 & 2014-2015 2009-2013 2014-2015 Projected 4 3.5 3.5 3.4 3.0 3 2.5 2.5 2 1.8 1.5 1.2 1.2 1 0.9 0.5 0.3 0 EU Japan OECD US Israel -0.2 -0.5 Sources: OECD, European Commission

Relatively Low Government Deficit in Israel As Percent of GDP, 2013 12.7% 9.3% 7.1% 7.0% 6.4%5.9% 5.0%4.6%4.3%4.3% 3.0%2.8%2.5%2.4%2.1% 1.5%1.4% 1.3%0.9% 0.3% Source: OECD & BOI 9

Relatively Young Population Median Age in Years - Country Comparison 50 45.7 45.8 44.2 41.8 45 41.3 41.4 41.5 40.6 40.3 40.6 38.8 37.2 40 35 29.7 27.7 30 25.5 22.6 25 18.1 20 15 10 5 0 Source: CIA Factbook

Relatively Low Unemployment Current (June 2014) Projected (Q4 2015) 30.0 25.4 25.0 23.9 20.0 15.0 10.0 7.5 7.1 6.5 5.9 5.9 5.7 5.0 3.5 3.5 0.0 Source: OECD

Israel’s Labor Market Since 2000 Participation rate Unemployment rate Unemployment rate Participation rate Source: TAUB Center

High Share of ICT in the Business Sector ICT= Information & Communications Technologies, 2008 17.8 13.9 13.0 12.2 2012 17.6% 10.4 9.9 9.6 9.0 9.0 8.8 8.8 8.2 8.2 8.1 7.8 7.2 7.1 7.1 6.7 6.4 6.3 6.2 5.9 5.8 5.7 5.7 5.0 3.7 Source: M.A.I, Economic research division analysis to ICBS Source: Israel CBS

Foreign Direct Investments in Israel Source: Economic research division analysis to BOI data and Globes magazine.

World Leadership in Civilian R&D Investments As Percentage of GDP, 2012 4.2% 4.0% 3.5% 3.4% 3.4% 4.2% 2.9% 2.8% 2.3% 2012 2.2% 1.7% 1.7% 1.3% 1.3% 1.3% Israel Korea Finland Sweden Japan Germany USA France Australia Ireland UK Spain New Italy Zealand Source: OECD

Israel ranks high in innovation and investment  Strength of investor protection (6)  Inflation, annual % change (1)  Soundness of banks (18)  FDI and technology transfer (11)  Nature of competitive advantage (8)  Quality of scientific research institutions (3)  PCT patents, applications/million pop (5) Source: World Economic Forum GCI 2014-2015

Leading Indicators from the WEF Global Competitiveness Index Strength of investor protection 0 20 Production process Inflation, annual % change sophistication 40 60 80 100 Israel 120 Nature of competitive Cyprus Venture capital availability advantage 140 Jordan 160 France US China FDI and technology Soundness of banks transfer Availability of latest Firm-level technology technologies absorption Source: World Economic Forum GCI 2014-2015

Innovation Indicators from the WEF Global Competitiveness Index Capacity for innovation 0 10 20 Quality of scientific PCT patents, 30 research institutions applications/million pop 40 50 Israel 60 Cyprus 70 80 Jordan 90 France Availability of scientists US Company spending on R&D and engineers China University-industry Gov’t procurement of collaboration in R&D advanced tech products Source: World Economic Forum GCI 2014-2015

Global R&D and Innovation Center

Israeli Innovation in Applications Firewall (traffic filtering software) by Check Point Skype Technology (Voice over Internet Protocol) by VocalTec ICQ (instant messaging program) by Mirabilis Waze navigation + real-time traffic analysis and reporting application Viber (Instant Messaging & Voice over Internet Protocol) by Viber Media

Israeli Innovation in Defense Hermes 900 (multi-payload unmanned aerial vehicle) by Elbit Systems Iron Dome (anti-rocket defense system) by Rafael Advanced Defense Systems Xaver (radar system that sees through walls) by Camero MUSIC (countermeasure against missiles for civil aviation) by Elbit Spike (anti-tank missile) by Rafael Advanced Defense Systems

Israeli Innovation in Medicine PillCam (capsule endoscopy) by Given Imaging ExAblate (device that destroys tumors without surgery) by InSightec ReWalk (leg braces for paragletics) by Yokneam-based Argo Medical Technologies Endopat (fingerprint device to measure cardiac health) by Itamar Medical Copaxone (immunomodulator drug for treating multiple sclerosis) by Teva

Israeli Innovations in Other Fields Flash Memory by M- Systems (now owned by SanDisk) Advanced Driver Assistance System by Mobileye Epilady (Epilator) by Mepro, Kibbutz HaGoshrim Solar Window (solar power for buildings) by Pythagoras Solar Cherry Tomatoes (Tomaccio tomatoes) by Prof. Keidar & Prof. Rabinovitch, Hebrew University

Israeli Nobel Prize Winners Daniel Kahneman (Economics), 2002 Avram Hershko (Chemistry), 2004 Aaron Ciechanover (Chemistry), 2004 Robert Aumann (Economics), 2005 Ada E. Yonath (Chemistry), 2009 Dan Shechtman (Chemistry), 2011 Arieh Warshel (Chemistry), 2013 Michael Levitt (Chemistry), 2013

Local Currency Exchange Rate Compared to Main Competitors Israel: A Sharp Revaluation Compared to Other Countries Change in Local Currency Against US Dollar Aug 2012 ($=4.02 NIS) - May 2014 ($=3.42 NIS) 29% 10% 10% 7% 3% -1% -2% -3% -7% -8% -8% -10% -10% -14%

7 Free Trade Agreements with 40 Countries Allowing products to enter without duty E.F.T.A Switzerland, Norway, Iceland, Liechtenstein Canada E.U. Turkey (28 Countries) S. Korea U.S.A Ukraine China India ISRAEL Mexico Panama Colombia MERCOSUR Brazil, Argentina, Uruguay , Paraguay Negotiated / Considered

Evolution of the Israeli Export, 1980-2013 (in B$, Including diamonds and services)

Israeli Industrial Goods Export by Continent 2013 (excl. diamonds) Rest of European Europe North America Union Asia 9.5% 23.6% 31.9% 21% $ 4.5 B $ 11.21 B $ 15.18 B $ 9.9 B Latin America Africa 5.8% 2.9% Rest of the $ 2.75 B $ 1.35 B World 5.3% $ 2.92 B Total : $ 64895.1 Billion

Industrial Goods Import by Continent 2013 (excl. diamonds) European Rest of North America Union Europe Asia 12.42% 34.4% 9.4% 20.3% $ 7.8 B $ 21.6 B $ 5.9 B $ 12.77 B Latin America Africa 1.76% 0.46% Rest of the $ 1 B $ 0.3 B World 22% $ 13.42 B Total : $ 64895.1 Billion

2013 Industrial Goods Export by Sectors (excl. diamonds) Other 4% Prepared Foodstuffs 2% Chemical Products Textile 35% 2% Mineral Products 2% Vegetable Products 3% Base Metal Articles 4% Vehicles & Transport Equipment 5% Plastics & Rubber 5% Machinery & Electrical Equipment 29% Optical & Photographic Instruments 9%