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, expensive raw materials had to be imported, and skilled workers were scarce. Additionally, in the pre-State period, the Zionist Movement’s members and institutions considered agriculture and the return of the people to their homeland to be the realization of the ultimate Zionist dream. This led them to be suspicious of any attempts made by private individuals to develop industry.

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

In 1921, for the first time, the employers of the Jewish economic sector united to found the Association of Manufacturers and Employers. Four years later, this association broke up and the manufacturers organized the Association of Manufacturers in the Land of Israel. This later became known as today’s Manufacturers’ Association of Israel.Industry in Israel – Historical Background

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

In addition to contributing to the nation’s military needs, Israeli industry has continued to strengthen the country’s manufacturers’ pioneering spirit in their efforts to relocate their factories to outlying regions in the Negev and the Galilee with the assistance of government programs. Furthermore, the Israeli industry provided the main employment infrastructure for local residents of these areas which, over the years, have continued hiring hundreds of thousands of new immigrants, providing them with a livelihood and helping them integrate and assimilate themselves to the Israeli society.

With the beginning of Israeli industry needing many engineers and other professional workers, the Manufacturers’ Association played an active role in training these professionals and in developing the technological education of Israel. The Manufacturers’ Association set in motion programs to expand study tracks in the fields of industry and entrepreneurship, and advanced technology in schools and institutes of higher education. This encouraged productive cooperation between educational institutions and the manufacturing industry.

Over the years, Israeli industrialists have faced much adversity from periods of economic hardship and rampant inflation, strikes, increasing competition of cheap imports from abroad, as well as wars and security-related issues. Despite these difficulties, Israeli manufacturers have managed to develop thriving industries by utilizing Israel’s technological advances, the chutzpah and hard work of its citizens, its initiative, resourcefulness, vision, and start-up-nation mentality. Israel is a world leader in advanced technologies and innovation, which also drives all branches of Israeli industry forward.