The Israeli economy, despite all the challenges – is in good shape. There are four Israeli economic relative advantages, and three revolutions in the making. All these, when getting their full effect, will expectedly help Israel's economy to reach even greater success

1. Dr. Adam Reuter & Noga Kainan
Against all odds

2. * Israel has significant challenges that need attention, like:
inequality, price of housing, bureaucracy, defense expenditures and others

3. CEO and founder of Financial Immunities, Israel's largest financial
risk management firm – advises to hundreds of international and
local Israeli companies. adam@immunities.co.il
Chair and founder of both CFO Forum and Companies’ Leaders
Forum, who's members are senior executives from leading
companies. kainan@iel-forum.org
Dr. Adam Reuter
Noga Kainan

4. Economic Success
• Economic Success facts:
o GDP growth
o Resilience & Stability
o Debt to GDP Ratio
o Employment rate & participation
• The 4 Israeli Advantages:
o Technological
o Entrepreneurial
o Global
o Demographic
• 3 Revolutions in progress:
o Victory over the Desert
o Energy
o Transportation
• The challenges
• The Future

5. In the past 20 years the Israeli economy has grown by 180% while the
number of Israeli citizens has grown by only 45%
Israeli GDP reached more than 300 billion $.
GDP per capita of $35,000, places Israel 24 out of 187 countries
TelAviv.Photo:EliMesser
GDP Growth

6. 5.63
11.86
15.02 16.25
21.62
26.65
29.51
32.86
35.46
38
3.16
5.86
8.1
4.66
7.67
9.61
10.9 12.11
13.96
15.97
0
5
10
15
20
25
30
35
40
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015*
GDPGrowth
Accumulated GDP Growth Rate ($ terms)
Israel OECD Total
In the year 2000, the Bank of Israel
conducted a comprehensive forecast for
the economy: "If we act right" it stated
"the Israeli economy will reach a GDP of
750 billion NIS within 15 years".
In 2015 Israel reached a real GDP of 875 875
billion NIS, higher by a 16% rate more than
that forecast.
GDP Growth

7. 90 billion $ foreign-
exchange reserves make
Israel one of the leading
countries in terms of
foreign-exchange
reserves per capita. An
indication of
financial stability $0
$10,000
$20,000
$30,000
$40,000
$50,000
$60,000
$70,000
$80,000
$90,000
$100,000
The Israeli economy is more immune to world-
wide slowdown, due to the flexibility of thousands
of export companies dispersed across many
industries.
Economic Success Facts

8. Israel is one of very few developed
economies where Debt to GDP Ratio
is shrinking
AshdodPort

9. Israel’s Employment rates had the
highest increase among OECD
countries. OECD Report 2014
Economic Success Facts
68.5
69.0
69.5
70.0
70.5
71.0
71.5
72.0
72.5
20002001200220032004200520062007200820092010 2011 201220132014
Dataextractedon30Jan2016fromOECD.Stat
labour force participation rate
Israel OECD countries
3.0
5.0
7.0
9.0
11.0
13.0
15.0
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Unemployment rate
Israel OECD countries

10. Technological Advantage
Israel is among the only 8 countries that
launch satellites into space.
7 other countries are much larger:
Russia, USA, France, Japan, China,
UK, India.
Israel is the world leader of R&D
employees per capita with 140 per
10,000. In second place is the USA.
1st in business expenditure on R&D
1st in cyber security
2nd in scientific research
2nd in public expenditure on
education
3rd in qualified engineers available
in labor market
IMD competitiveness yearbook, 2014

11. Cloud Solutions Architect, Cloud Platform Engineer, Application developer,
Nanotechnologist, Integrator of ecological construction, CRM database
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Manager, Cyber researcher, Bioinformatician...and much more
That's one reason unemployment will remain low in Israel
In a world that is losing trades fast, due to automation and
robotics. High-tech industry in Israel invents new trades
faster:

12. RobertYisraelAumann
AvramHershko
Arieh Warshel Ada Yonath
DanielKahneman
Michael Levitt
Aaron Ciechanover
DanShechtman
3rd in the world for the No. of Turing
awards in computing.
30% of winners of the GödelPrize for outstanding
papers in theoretical computer science.
8Israeli Nobellaureates since the beginning of the 21st century,
make Israel the no. 1 country of Nobel Prize winners per capita!
That means 50 times more than their proportion in world population.
Technological Advantage

13. # 2nd in Venture
Capital Confidence
Technological Advantage

14. 1st in innovative capacity
1st in the world for entrepreneurship
IMD competitiveness yearbook, 2014
Entrepreneurial Advantage
Israel has a remarkably high level of entrepreneurial activity,
mostly opportunity-driven and export-oriented
GEM – Global Entrepreneurship Monitor 2013
5.3
7.1
8.6
11
9.5
6.9
13.8
9.2
5.3
10
67.1
8.59
1112121314
24
Global Entrepeneurship Monitor 2013
Total early stage
entrepreneurial
activity
Entrepreneurial
Intention
Total early stage entrepreneurial activity – percentage of 18-64 population who either nascent entrepreneur or
owner-manager of a new business
Entrepreneurial Intention – percentage of 18-64 population who are latent entrepreneur and who intend to start a
business within three years

15. Reasons for Israel’s Global Advantage:
• 3-4 generations of immigrants from around
the globe that have vast knowledge of
foreign languages and cultures
• Jews are spread around the world
• Developed entrepreneurial culture and
boldness
• Long-term focus on exporting
• The culture of the “Wandering Jew”
• High percentage of travelers (Backpackers & others)
A small and isolated economy will succeed only
by becoming global.
Jewish merchants family, Jacob & Mitya Reuter with
Mongolian clients. around 1920.

16. # 3 in Best USA’s Allies list (after UK and Canada). Israel is
known as USA’s footing in the Middle East and provides a strong strategic position in
the region, through which America has been able to play a significant though
controversial role in the Greater Middle East. (listaka.com 2015)
75% of the military aid US provides to Israel, is for
military procurement in the US alone and, in a circular motion, the US administration
increases demand for US defense industries & helps job creation in American industry.
The Israeli army provides a huge experimental field of
innovative technologies to the US military
Counter terrorism intelligence Israel
provides, saves the US billions of $ every year

17. 86 Nasdaq Israeli companies
The highest number after USA and China
Over 300 leading international companies
Facebook, Microsoft, IBM, Intel, Google, Apple,
HP, Cisco, Motorola, Philips, Applied Materials,
EMC, Siemens and many others, chose Israel
as a target to establish R&D centers
All Products are developed for the world.
Israel is just a Beta Site.
Global Advantage

18. ISRAEL
Cyprus
NetherlandChina
India Singapore
Korea
Australia
ISRAEL
Hungary
Turkey
Portugal
Finland Sweden
Ireland
Spain
ISRAEL
USA
Argentina
Uruguay
Brazil France
Russia
Italy
ISRAEL
Germany
Greece
Czech
Rep.
Bulgaria
Lithuania
Slovenia
Denmark
Global Advantage
R&D Agreements

19. ISRAEL
Russia
Singapore
Slovak
Rep.
Slovenia
South
Africa
e
ISRAEL
Denmark
Estonia
Ethiopia
Finland
Greece
Georgia
Germany
Greece
Hungary
India
Ireland
Italy
Jamaica
Romania
ISRAEL
Japan
Latvia
Lithuania
uxemburg
Malta
Mexico
Moldova
Netherlands
Norway
Panama
Philippines
Poland
Portugal
ISRAEL
Austria
Belarus
Belgium
Brazil
Bulgaria Canada
China
Croatia
Czech
Republic
Global Advantage
TAX Agreements

20. • Youngest population in the OECD. Median
age of 31 (42 in the OECD)
• 3rd most educated population in the world
• Positive immigration
• Highest fertility rate within the developed
countries
Demographic advantage

21. Demographic Advantage
Number of ultra-orthodox men participating in the
labor force jumped to 49% in 2015 Compared to
32% in 2005.
Ultra-orthodox women participation rate jumped
from 40% to 71% (above average participation of
women in general, which stands at 58%).
At the same time, there is also an increase of
participation by Israeli Arabs in the workforce,
especially among Arab women from 23% a decade
ago to 32% in 2015.

22. Victory over the Desert
Israel, surrounded by desert, has today more water than it needs.
Almost 100% of all water supply to households is from desalination.
Israel is the number 1 leader in waste-water recycling
with a rate of 90% (Australia, the second, has a rate of only 22%).

23. Israel will reach energy independence within 4 years
and will become an energy exporter within 7 years*
Energy Revolution
The state of Israel is expected to receive
royalties and tax revenues from gas
exploitation in the amount of more than
80 billion $ in the 30 years to come*
*This forecast may change according
to new decisions by the supreme court of Israel.

24. The plunge in global commodity market prices and especially of crude oil will
contribute to the Israeli economy almost more than any other economy
(according to an analysis by BLOOMBERG, 2014)
Energy Revolution

25. Transportation Revolution
Trends: investing in the peripheral areas
40
90
140
190
240
290
340
2007 2008 2009 2010 2011 2012 2013 2014
Km.
CBS Data.
Lessto the center
more to the south and to the
Jerusalem district
much more to the north and
to the Haifa area

26. Transportation Revolution
Trends: investing in public transportation
30,000
32,000
34,000
36,000
38,000
40,000
42,000
44,000
46,000
48,000
50,000
2008 2009 2010 2011 2012 2013 2014
Railway passengers (thousands)
350,000
400,000
450,000
500,000
550,000
600,000
2007 2008 2009 2010 2011 2012 2013 2014
Buses kilometers travelled (thousands)

27. Two main challenges:
Poverty rates & Gini coefficients
before tax and transfer
After tax and transfer
Improve in Israel's Gini coefficients
Taub Center
0
10
20
30
40
50
60
70
Ultra Orthodox Jews Israeli Arabs Others
57
50
13
70
57
27
% of households under the poverty line (2012)
after before tax and transfers
Due to the increase of labor force participation among ultra-
orthodox Jews and Israeli-Arab groups
which are the main households under the poverty line

28. Two main challenges:
Poverty rates & Gini coefficients
Are improving by the revolutions which open new job
opportunities to all sectors
“Total road investment in 1992–2004 increased
men’s average wages by 10 percent”
Bank of Israel

29. Other main challenges
bureaucracy, cost of living & Housing, Defense expenditures
Ashdod, Musical Fountain

30. The HDI is a composite statistic of:
• life expectancy
• Education
• Income
* Dec, 2015

31. The Place for the Future
Israel ranked higher than Britain, France, Japan and Italy
in a “worthwhileness where to be born” Economist
index, for providing the best opportunities for a
healthy, safe and prosperous life in
years to come.

32. Dr. Adam Reuter
CEO Financial Immunities
Noga Kainan
Chair CFO Forum, IEL Forum

33. The main reason for this presentation is to introduce and explain this wonder that so
many people are interested in: a country that succeeded against all odds. A safe-
heaven for persecuted Jews anywhere, creating in the process a revolution in
agriculture, winning the desert, building defense industries that are reaching
exceptional solutions such as "Iron Dome", exporting the phenomenon of "Start-up
Nation", achieving a rate of GDP growth which is third highest of all OECD countries
since the 2008 crisis, and suffering probably the least from that crisis.
A country that is the third most educated nation in the world, and produced since the
beginning of the 21st century the highest number of Nobel Prize winners in relation to
the size of the population. One of only eight countries that launches satellites into
space and a country that creates such powerful secret services like the Mossad and
the best air force in the world. A country that invests more in R&D than any other
country, despite a chronic shortage of resources in an atmosphere plunged in chaos
and disintegration under an "Islamic winter“. A country of great achievements in
Music, Literature and Architecture. A country of the future.