Industry in Israel – Historical Background

When the state of Israel was founded, no infrastructure existed to support the development of industry. There was no machinery, raw materials had to be imported at a high price , and skilled workers were a rarity. In addition, in pre-State times, the public and the institutions of the Zionist Movement considered agriculture, the return of the people to its land, to be the realization of the ultimate dream and were suspicious of the attempts made by private individuals to develop Industry in Israel – Historical Backgroundindustry.

Nevertheless, at the end of the 19th and the beginning of the 20th centuries, some brave local entrepreneurs and European philanthropists did set up several industrial enterprises that provided employment for numerous workers and also laid the infrastructure for the strengthening and mechanization of agriculture.

In 1921, for the first time, the employers of the Jewish economic sector got together and founded the Association of Manufacturers and Employers. Four years later this association broke up, and the manufacturers set up the Association of Manufacturers in the Land of Israel, which later became known as  Israel Manufacturers Association.

The objective of the association was to help factory owners raise capital, work together as a group in dealing with workers’ unions, and contend with the authorities in matters related to taxes, levies, import restrictions, etc. The primary objective, however, was to promote the dream of a flourishing Zionist industry that would constitute a vital element in the resilience of the “state in the making”.

As well as contributing directly to the country’s defense needs, Israeli industry has strengthened the country in a variety of ways. Manufacturers imbued with a pioneering spirit relocated their factories to outlying regions, in the Negev and the Galilee, with the assistance of wise government policy and, in many places, provided the main employment infrastructure for local residents. Over the years, factories have hired hundreds of thousands of new immigrants, providing them with a livelihood and helping them integrate into Israeli society.

Israeli industry needed engineers and other professional workers and therefore played an active part in training them and in developing technology education in Israel. The Manufacturers Association instigated programs to expand study tracks in the fields of industry, entrepreneurship, and advanced technology, in schools and institutes of higher education, and encouraged productive cooperation between educational institutions and industry.

Over the years, Israeli industrialists have faced much adversity, periods of economic hardship and rampant inflation, strikes, wars and security-related tension, as well as increasing competition from cheap imports from the Third World. Despite these difficulties, Israeli manufacturers have managed to develop thriving industries, by utilizing Israel’s technological advantages and thanks to their hard work, initiative, resourcefulness and vision. Israeli technology industries and start-ups are world leaders in their fields, however technological innovativeness is not limited to these fields alone – it drives all branches of industry forward.