from the April 2011 issue

Flexibility is Israel's key national characteristic.

Most countries achieve excellence in specific areas. Switzerland is the world's best watchmaker. Italy is famous for its glass. America, long ago, became the world's outstanding automobile maker. These countries not only achieved excellence but also extended it as time went by.

By contrast Israel has adjusted itself to its fundamental needs. The country's pharmaceutical industry was founded, during World War II, when it could not buy pharmaceuticals on the world's markets. There were small workshop pharmaceutical units but it took Eli Hurwitz to combine them into Teva Industries, the world's largest generic pharmaceutical company.

Israel is the world's foremost manufacturer and exporter of drip irrigation. The story behind the industry's origin is manifold. One is that it was noticed that a pot with holes provided the minute amounts of water necessary for plant growth. Impetus for the growth of the water fertilization industry was the country's shortage of water. To preserve water, in our own roof garden we have installed a water irrigation system. A kibbutz develped solnoid system produced is adjustable to the number of times times a day and the time required for watering our plants. In this issue Israel's leading water companies are featured in detail.

Israel's defense industry has its origin in dire need. The major catalyst for Israel's metamorphosis from a small-arms manufacturer to a producer of sophisticated military systems came after the 1967 Six-Day War. During the war, France imposed an embargo on arms sales to Israel, including the Mirage planes already on order from the Dassault aircraft factory. When the United States became the primary supplier of combat aircraft, Israel began to develop its own production capability. The government-owned Israel Aircraft Industries (IAI), founded as a maintenance facility in 1953, soon began developing and assembling a variety of its own aircraft, including the Kfir - a replacement for the Mirage - as well as the Arava and Nesher planes. At the same time, IAI's contacts with US suppliers advanced from subcontracting jobs to joint ventures with Boeing and Lockheed-Martin. As a result, employment at IAI grew rapidly from 4,000 to a peak of 14,000 in the late 1980s. Israel is now one of the top five arms manufacturers in the world.

Another industry that had its origin in a dire need is water desalination. Israel has built the world's largest desalination plant, operating not far from Tel-Aviv. Water purification has become a major industry with annual exports exceeding $1.0 billion. The examples cited above are ample proof that it is not natural resources or a special skill that leads to the founding of world class industries but an inherent flexibility which responds to national needs

Reprinted from the Israel High-Tech & Investment Report April 2011

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