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. 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 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. It also laid the infrastructure for the mechanization and strengthening 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 organized the Association of Manufacturers in the Land of Israel. Industry in Israel – Historical BackgroundThis later became known as today’s 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 directly contributing 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. In many places, they also 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.
With Israeli industry needing engineers and other professional workers, the Manufacturers Association played an active role in training them and developing technological 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. This 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, increasing competition from cheap imports from abroad, as well as wars and security-related tension. Despite these difficulties, Israeli manufacturers have managed to develop thriving industries by utilizing Israel’s technological advantages and its people’s hard work, initiative, resourcefulness, and vision. Israeli tech industries and start-ups are world leaders in their fields, however technological innovation is not limited to these fields alone—it drives all branches of industry forward.