Israel and the Internet: Economy Of Israel: Exploring The Israeli Economy

Flip_flop_politics
Published on Sep 19, 2021
Link: https://www.youtube.com/watch?v=6vzIsiqQoRc
The Israeli economy is one of the most innovative in the world. It is home to some of the biggest and best tech companies, but how did the Israeli economy become so good? In this video, I'm going to explain.

You have probably heard of Silicon Valley, but if not, Silicon Valley is a high tech hub in California which has produced some of the worldâ€™s largest companies such as Facebook, Google and Apple. The Israeli economy has Silicon Wadi. There are fewer Teslas, but Silicon Wadi is to the Israeli economy what Silicon Valley is to the US economy. It is a cluster of cities within Israel with the second highest concentration of tech companies and the largest number of start-ups per capita in the world.

If youâ€™re a world leader looking to create a tech scene, it requires more than just some branding, bean bags and table tennis tables. The Israeli economy has become a high tech powerhouse thanks to four key political pillars.

The 1980s was a very bad time for the Israeli economy. The country was going through a tough crisis. Inflation was regularly above 100%, meaning that the price of goods was doubling in a year. There was a banking crisis in the early 1980s, which caused government expenditure to rise rapidly
It looked as if the Israeli economy was on the brink of bankruptcy itself
In 1985, the Israel economy underwent some shock therapy to try and produce some stability. Government spending was cut, money printing was reduced, wage caps were introduced and the currency was devalued
In the short-term this caused a lot of pain and the Government needed to find a way to get the Israeli economy moving forward again.

And thatâ€™s where the first pillar comes in, the Yozma programme
The Yozma programme was introduced in the early 90s and helped to spark a boost in international investment into the Israeli economy. It was made of up $100m of state spending which was to be invested into venture capital firms which backed start-ups and scale-ups.

This international outlook feeds into the second pillar, immigration. It would be fair to say that Israel is the country that has bet on immigration the most. Immigrants tend to be more entrepreneurial and immigration promotes more international trade due to remittances and tourism. The Israeli economy benefits from immigration because it typically means people with high skills are moving to the country.

As well as relying on importing skills from abroad, Israel has always put a lot of emphasis on education and training. The emphasis on education is the third pillar that has helped the Israeli economy become one of the strongest tech players in the world

And you'll have to watch the video to find out the fourth important pillar that helped the Israeli economy become the powerhouse that it is today.

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