ISRAEL 
HIGH-TECH & INVESTMENT REPORT

from the February 2002 issue


Upbeat Prediction for IT

In 2002 the Israeli Information Technology market is expected to return to normal in its expenditures on technology according to International Data Corporation (IDC) Israel. In 2001, the Israeli IT market had an estimated value of $3.2 billion. When compared to the growth of the gross domestic product (GDP) since 1995, the IT market growth rate is three times that of the GDP. About two weeks ago the Central Bureau of Statistics published figures indicating a 0.5 negative growth in Israel's GDP for 2001 However, IDC now figures the IT market will register 10% negative growth for 2001.

A breakdown of IT expenditures shows that the largest expenditure was on services. In 2001 the Israeli economy spent about $1.4 billion on IT services, compared to $600 million in 1994. Since the Israeli market uses more services and less hardware and software, it has been characterized as a mature

IDC points out that 0.25 of all the organizations in Israel are responsible for over 63% of the IT expenditures in the country, reflecting an inbalance of computerization levels between large and small medium organizations are under-computerized.

The computerization of the organizational sector in Israel includes some 745,000 desktop computers, some 110,000 portable computers and about 5,700 international communication hookups.

About 90,000 organizations are hooked up to the Internet, 26,000 of which operate a Web site. All told, the average investment in IT per employee is an estimated $1,600 per year.

Communications companies and financial institutions lead in investment per employee, spending some $8,000 per employee per year, and the education sector is at the bottom of the list, with an investment of less than $300 per employee per year.



Reprinted from the Israel High-Tech & Investment Report February 2002

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