Israel as a Knowledge Economy II

Abstract

Israel’s high-tech sector has achieved a global reputation for innovation and entrepreneurship, but it encompasses only a small part of the overall economy. The remainder of the business sector is characterized by globally uncompetitive companies geared to a protected domestic market. Outside the technology sector, the Israeli economy is dominated large business groups, restricted competition, and excessive and inefficient government. Most Israeli businesses are not particularly innovative, either in terms of introducing new products or services or in adopting the most modern managerial processes. The small number of large Israeli companies outside the tech sector that do succeed in the global market is more often than not the product of a single visionary entrepreneur rather than the natural outcome of a supportive business environment.