IL

COUNTRYPROFILE ISRAEL

CONTENTS<<COUNTRY>>

IMD World Competitiveness Yearbook, Talent & Digital 2020: summaries

WORLD COMPETITIVENESSRANKING 2020

All data are available from theWorld Competitiveness Online.

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BASIC FACTSCapital

Land area (square km '000) 222019

Exchange Rate (per $) 3.5652019

Population - market size (millions) 9.052019 42

Gross Domestic Product (GDP) (US$ billions) 395.12019 30

GDP (PPP) per capita (US$) 39,2262019 30

Real GDP growth (%) 3.52019 14

Consumer price inflation (%) 0.842019 19

Unemployment rate (%) 3.802019 20

Labor force (millions) 4.122019 43

Current account balance (% of GDP) 3.632019 22

Direct investment stocks inward ($bn) 148.02018 35

Direct investment flows inward (% of GDP) 4.612019 6

PEER GROUPS RANKINGSEUROPE - MIDDLE EAST - AFRICA (40 countries) POPULATIONS < 20 MILLION (34 countries)

COMPETITIVENESS TRENDS - OVERALL

ISRAELOVERALL PERFORMANCE (63 countries) Rank

Jerusalem

CHALLENGES IN 2020To restart the economy after the Covid-19 crisis.

To decrease the number of unemployed.

The Federation of Israeli Chambers of Commerce, Tel-Aviv

COMPETITIVENESS LANDSCAPE

21 22 21 24 26

2016 2017 2018 2019 2020

24

36

25

38

53

38

2127

3126

31 3429

33

16

45

16

5

26 23

Dom

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Inte

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iona

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Inte

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Empl

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Pric

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Publ

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Tax

Polic

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Inst

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nal F

ram

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k

Busi

ness

Leg

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tion

Soci

etal

Fra

mew

ork

Prod

uctiv

ity &

Effi

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Labo

r M

arke

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Fina

nce

Man

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ent

Prac

tices

Att

itude

s an

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Basi

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Tech

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Scie

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Hea

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Economic Performance Government Efficiency Business Efficiency Infrastructure

13 14 14 15 17

2016 2017 2018 2019 2020

14 15 14 16 17

2016 2017 2018 2019 2020

• To restart the economy after the Covid-19 crisis.• To decrease the number of unemployed.• To decrease the government deficit after the Covid-19 crisis.• To help private companies to regain productivity.• To increase productivity generally.

Provided by:The Federation of Israeli Chambers of Commerce, Tel-Aviv

IMPROVEMENTSWCY 2019

WCY 2020 DECLINES

WCY 2019

4.2.16 High-tech exports (%) 13.04 22.83 3.2.14 Labor force long-term growth -0.46

2.3.08 Exchange rate stability 0.048 0.013 1.4.04 Employment - long-term growth 1.54

2.3.12 Bureaucracy 2.19 3.61 1.1.18 Gross fixed capital formation - real growth 3.11

2.4.16 Labor regulations 4.27 6.29 2.1.02 Government budget surplus/deficit (%) -2.93

2.3.10 Adaptability of government policy 3.69 5.22 4.5.15 Primary and secondary education 7.42

4.4.23 Environment-related technologies 0.54 0.75 4.4.28 Quality of life 7.91

2.4.13 Creation of firms 4.93 6.34 3.2.20 Attracting and retaining talents 7.73

2.3.09 Legal and regulatory framework 4.40 5.51 3.2.19 Finance skills 7.47

2.4.15 Start-up procedures 4.0 3.0 4.1.04 Access to water 9.24

1.2.12 Exports of commercial services ($bn) 44.31 55.17 3.3.17 Venture capital 7.60

2.4.11 Parallel economy 4.49 5.56 4.5.17 Management education 7.42

1.2.02 Current account balance 2.97 3.63 4.4.25 Sustainable development 6.36

2.4.09 State ownership of enterprises 5.05 6.15 4.5.16 University education 7.91

1.1.15 Real GDP growth per capita 1.29 1.55 3.3.16 Credit 6.40

3.3.08 Stock markets 4.80 5.69 3.1.08 Large corporations 6.67

COMPETITIVENESS EVOLUTION & ATTRACTIVENESS INDICATORS

ISRAELCOMPETITIVENESS EVOLUTION

-0.77

6.05

6.51

6.49

6.39

8.00

6.63

5.61

The criteria below highlight the 15 biggest Improvements and the 15 biggest Declines in the overall performance of the economy. They are

determined by the largest percentage changes in the value of each criterion from one yearbook to the next.

WCY 2020

5.85

KEY ATTRACTIVENESS INDICATORSFrom a list of 15 indicators, respondents of the Executive Opinion Survey were asked to select 5 that they perceived as the key

attractiveness factors of their economy. The chart shows the percentage of responses per indicator from the highest number of responses

to the lowest.

0.75

1.77

-3.71

6.49

5.56

6.93

7.3%9.8%12.2%14.6%19.5%19.5%19.5%22.0%26.8%26.8%43.9%58.5%58.5%61.0%68.3%

0% 10% 20% 30% 40% 50% 60% 70% 80%

Competitive tax regimePolicy stability & predictability

Competency of governmentQuality of corporate governance

Effective legal environmentCost competitiveness

Effective labor relationsBusiness-friendly environment

Access to financingReliable infrastructure

Open and positive attitudesDynamism of the economy

High educational levelStrong R&D culture

Skilled workforce

WORLD COMPETITIVENESSDIGITAL RANKING 2020

All data are available from theWorld Competitiveness Online.

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Alpha AlphaLabelBeta BetaLabel Gamma GammaLabel1 2 2 2 2 2 24 4 4 2 2

6.5 4 4 2 28.5 4 4 2 211 4 4 2 2

2016 2017 2018 2019 2020

13 13 12 16 19

5 7 2 8 9

24 27 25 30 32

9 11 7 19 23

OVERALL

PEER GROUPS RANKINGS

EUROPE - MIDDLE EAST - AFRICA (40 countries) POPULATIONS < 20 MILLION (34 countries)

Future readiness

COMPETITIVENESS & DIGITAL RANKINGS

Technology

DIGITAL TRENDS - OVERALL

ISRAEL

OVERALL PERFORMANCE (63 countries)

OVERALL & FACTORS - 5 years

Knowledge

13 13 1216

1921 22 2124 26

2016 2017 2018 2019 2020

Digital

Competitiveness

8 8 8 9 11

2016 2017 2018 2019 2020

10 9 9 10 11

2016 2017 2018 2019 2020

9 28 1 3

32 32 26 3619

23 26 29 14

Knowledge Talent Training & education Scientific concentration

Technology Regulatory framework Capital Technological framework

Future readiness Adaptive attitudes Business agility IT integrationThe direction of the triangle indicates the performance change from the last year: improved or stabledeclined

Overall Factors Sub-Factors

N.B. This graph provides only a comparison of the country’s performance in the two rankings.

u Overall top strengths

w Overall top weaknesses

Subfactors 2016 2017 2018 2019 202023 21 19 27 28

6 11 2 3 1

2 2 2 5 3

Talent Rank Rank Rank

Educational assessment PISA - Math 38 29 u 1 International experience 20 u 3 - Foreign highly-skilled personnel 26 20 - Management of cities 31 - w 56 Digital/Technological skills 19 - 8 Net flow of international students 45 6 u 6 43

Subfactors 2016 2017 2018 2019 202026 26 30 32 32

20 27 20 20 26

26 28 20 35 36

Regulatory framework Rank Rank Rank

Starting a business 17 17 47 Enforcing contracts 47 13 50w Immigration laws 51 44 17 Development & application of tech. 14 25 34 Scientific research legislation 15 9 37 Intellectual property rights 26 w 55 12

Subfactors 2016 2017 2018 2019 202017 18 17 21 26

11 9 2 19 29

3 7 4 16 14

Adaptive attitudes Rank Rank Rank

w E-Participation 51 21 28 Internet retailing 23 39 14 Tablet possession 18 24 u 3 Smartphone possession 15 u 3 17 Attitudes toward globalization 23 14 w 51

TECHNOLOGY

Technological framework

Talent

Robots in Education and R&D

Training & education Scientific concentration

Scientific concentration

Capital Technological framework

IT integration

Business agility IT integration

FACTORS BREAKDOWN - STRENGTHS AND WEAKNESSES

ISRAEL

FUTURE READINESS

Opportunities and threats E-GovernmentWorld robots distribution Public-private partnerships

IT & media stock market capitalization Communications technology

Regulatory framework

Capital

KNOWLEDGE

Entrepreneurial fear of failure

Agility of companies Cyber securityUse of big data and analytics Software piracyKnowledge transfer

Adaptive attitudes

Business agility

Venture capital Internet bandwidth speedInvestment in Telecommunications High-tech exports (%)

Funding for technological development Mobile Broadband subscribersBanking and financial services Wireless broadbandCountry credit rating Internet users

Training & education

Employee training Total expenditure on R&D (%)Total public expenditure on education Total R&D personnel per capitaHigher education achievement Female researchersPupil-teacher ratio (tertiary education) R&D productivity by publicationGraduates in Sciences Scientific and technical employmentWomen with degrees High-tech patent grants

WORLD TALENTRANKING 2020

All data are available from theWorld Competitiveness Online.

Visit our eShop

Alpha AlphaLabel Beta BetaLabel Gamma GammaLabel1 2 2 2 2 2 24 4 4 2 2

Value

u 7.1 % 3 9,763 US$ 17 15.43 ratio 35u 10.40 ratio 17u 5.85 Survey [0..10] 16 6.20 Survey [0..10] 29u 47.88 % 11 5.90 Survey [0..10] 36

Value

w 96.50 index 52w 6.49 Survey [0..10] 42 6.24 Survey [0..10] 23 5.95 Survey [0..10] 22 6.51 Survey [0..10] 37 5.75 Survey [0..10] 26 35,783 US$ 21 178,295 US$ 28 16.13 % 30 6.29 Survey [0..10] 26w 20.81 micrograms 47

Value

1.38 % 18u 6.80 Survey [0..10] 8 6.39 Survey [0..10] 35 6.20 Survey [0..10] 20 5.85 Survey [0..10] 33 6.05 Survey [0..10] 35 - % - 6.93 Survey [0..10] 25 6.49 Survey [0..10] 33 7.22 Survey [0..10] 24w 1.28 number 47w 465 Average 37

Investment & Development 2020 Rank

Health infrastructure meets the needs of society

2020 Rank

Total public expenditure on education Percentage of GDP

ApprenticeshipsEmployee training is a high priority in companies

Readiness 2020 Rank

Educational assessment - PISA PISA survey of 15-year olds

Appeal

Exposure to particle pollution Mean population exposure to PM2.5, Micrograms per cubic metre

Labor force growth Percentage change

Index of a basket of goods & services in the main city, including housing (New York City = 100)

Skilled labor is readily available

Cost-of-living index

Female labor force Percentage of total labor force

Pupil-teacher ratio (secondary education) Ratio of students to teaching staff

are sufficiently implemented

Total public exp. on education per student Spending per enrolled pupil/student, all levels

Pupil-teacher ratio (primary education) Ratio of students to teaching staff

Management education meets the needs of the business community

Language skills are meeting the needs of enterprises

Student mobility inbound Foreign tertiary-level students per 1000 inhabitants

Primary and secondary education meets the needs of a competitive economy

Graduates in Sciences % of graduates in ICT, Engineering, Math & Natural Sciences

University education meets the needs of a competitive economy

Finance skills are readily available

International experience of senior managers is generally significant

Competent senior managers are readily available

Justice is fairly administered

Gross annual income including supplements such as bonuses, US$

Remuneration of management Total base salary plus bonuses and long-term incentives, US$

Effective personal income tax rate Percentage of an income equal to GDP per capita

Attracting and retaining talents is a priority in companies

Worker motivation in companies is high

Brain drain (well-educated and skilled people) does not hinder competitiveness in your economy

Quality of life is high

Foreign highly-skilled personnel are attracted to your country's business environment

Remuneration in services professions

OVERALL PERFORMANCE (63 countries)

IMD World Talent Ranking 2020

ISRAEL

1920

19 19

22

19

17

14

17

9

25

28

23

28

34

2223

16

19

28

2016 2017 2018 2019 2020

Overall

Investment &Development

Appeal

Readiness

9

3422

28

Investment & Development

Appeal

Readiness

The direction of the triangle indicates the performance change from the last year: improved or stabledeclined

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IMD WORLDTALENTRANKING 2020

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