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Although not the capital
of Israel, Tel Aviv is Israel’s economic
and financial centre. Israel’s stock exchange
is situated here, along with the head offices of major banks Bank
Hapaolim and Bank Leumi and almost all the country’s insurance
and finance institutions.
Tel Aviv's high tech venture capital industry is strong in the areas
of software, telecommunications equipment, Internet and semi-conductors.
High tech medical instruments, innovative pharmaceuticals and the
diamond trade (including cutting and polishing) also contribute
significantly to the economy.
Israel is noted especially for top level scientific
and medical research companies,
many of which have their offices in Tel Aviv. The government preserves
and encourages its highly educated workforce in the high tech sector,
through tax incentives, education and financial backing.
However, the country's high tech sector, after a record year in
2000, suffered a downturn in 2001, when the meltdown of global tech
markets brought an abrupt end to many years of rapid growth. The
industry has principally collapsed since.
In addition to the high tech specialists,
more than 50 % of Israel’s other factories and industrial
plants are situated outside the city centre but within the Tel Aviv
metropolitan area. Important industries include food processing,
clothing (much of it for outlets in Europe and America), metal and
engineering, printing and publishing. Israeli manufacturing has
a reputation for high quality and modernism.
A procedure known as ‘Dual-listing’,
launched in July 2000, allows larger Israeli companies to be listed
both in New York, on the New York Stock Exchange, NASDAQ or American
Stock Exchange, and on the Tel Aviv Stock Exchange. Around 50 international
Israeli companies have taken advantage of this opportunity. Among
them are big computer and software names Elron, Formula and Magic
Software and others, such as chemicals and pharmaceuticals manufacturer
Teva and the investment and industrial development corporation Koor
Industries, all of which are based in or around Tel Aviv.
In the long term, tourism is another essential
contributor at 10% of Gross Domestic Products (in 2000), comprising
a significant source of foreign exchange earnings. The general trend
in visitor numbers appears to be steadily upwards, if one assumes
that the almost complete termination of tourism during the current
Palestinian campaign of suicide bombings is temporary. However,
the tourism industry has also been affected by the recent economic
slowdowns worldwide, although this is also likely to be temporary.
Significant strides have been made in Israel in laying out a foundation
of macroeconomic stability. A
broad range of reforms have been put in place in recent years aimed
at reducing the scale of the large public sector and supporting
the modernisation of the economy. Inflation is tightly controlled
(Israel learned from the experience of runaway inflation in the
1980's), although it is currently under pressure from the remarkably
high expenditure involved in combating Arab terrorism. Defence spending
has climbed to 15 % of Gross Domestic Products, although, given
the present situation, this is seen as a necessary evil.
Currently Israel’s economy is in trouble
owing to the downturn that the wave of terrorist attacks has produced.
Israel’s attempts to halt terrorism have obtained hostile
responses from the EU, which Israel views as pro-Palestinian, including
sanctions and boycotts by some EU states. At the same time, the
EU as a whole remains a significant market for Israel’s agricultural
produce.
Israel takes the long view that since all their diplomatic
initiatives and peace offers have been rejected, a military response
to terrorism is inevitable, but that eventually the country will
be at peace with its neighbours, to the mutual economic advantage
of all.
Israeli strategists foresee the country eventually playing a leading
role in building a regional economic union, after Islamic hostility
to the idea of a Jewish state has abated. To this end, Israel has
strongly refined alliances with neighbouring Islamic states where
possible, including Egypt, Jordan and Turkey.
For the last few years, unemployment in Tel Aviv
has fluctuated between 7 and 9 % against the 8.7 % national average
(July 2001), which has lately been climbing. There is also a sharp
split between high tech (high earners) and non tech (low earners).
The commercial focal points of the city centre
are around the huge Azrieli Center (with 350,000 square metres /
3,767,368 square feet of business premises and dominated by a 50
story skyscraper) and Dizengoff Center and along Dizengoff Street.
However, various industrial and business
premises are located in industrial zones and privately
owned ‘business parks’ well away from the city centre,
for example, Atidim Science Based Industrial Park, in the northeast
of the city.
The following company can offer advice and information
on business in israel:
The Federation of Israeli Chambers of Commerce
Address: PO Box 20027, 84 Hahashmonaim Street, Tel Aviv
Telephone: (03) 563 1010
Facsimile: (03) 561 9027
Website address: www.chamber.org.il
Business Etiquette
The business community in Tel Aviv is greatly sophisticated,
with an international outlook. There is a large preference for informality
and plain speaking. Business attire, even for essential meetings,
is generally smart casual jacket
and open necked shirt, although suits and ties may be worn by some.
Women dress stylishly but also relatively informally and generally
wear trousers or skirt with a blouse or shirt. After introduction,
it is customary to use 1st names. Despite this easy going informality,
punctuality is considered vital. Business cards are expected.
English is normally spoken well by businesspeople
and is used out of politeness if non Israelis are present. Social
interaction is imperative and relaxed lunch meetings or even outings
together may be used to develop trust. Business meetings may be
held over dinner and can take place in a restaurant or private home.
If in a private home, a small gift, of flowers or chocolates, for
example, is usually suitable.
People work hard and with commitment and start the day early.
Business opening hours in Tel Aviv are normally
8.00 am to 5.30 pm or 6.00 pm Sunday to Thursday.
On Fridays, restaurants, shops, cafes and entertainment establishments
are open until 12.30 am for Shabbat (the Sabbath), which starts
Friday at sundown and continues to Saturday evening.
Gradually, Shabbat is being extended so that the whole of Friday
is added to Saturday as a day off work. |
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