Israel's success has been driven by a shift to free-market policies in recent years, and by the expertise of venture capital entrepreneurs in starting technology companies and then either taking them public or selling them at high prices. After reaching the limits of the economic potential of this model, Israel has been able to capitalize on its culture of innovation to market its technology more comprehensively around the world, especially in emerging markets, to continue to create new economic horizons.
Agriculture first, all-round development
Since the founding of the State, Jews from all over the world have immigrated to Israel in large numbers. They were full of enthusiasm to clear the rocks, terraces, fill the swamps, create gardens, and conquered the extreme difficulties of the living environment, such as the lack of infrastructure and lack of resources, in the barren land to create a world of economic miracles. Israel's agricultural population accounts for less than 5% of the country's population, but the fruits of their labor can not only meet domestic needs, but also to Europe to export large quantities of high-quality agricultural and sideline products. Israel's current annual per capita gross domestic product of about 1.7 million dollars, its foreign exchange reserves have now reached 22.7 billion dollars. In exploring the deeper causes of Israel's economic miracle, people have found a kibbutz (similar to the collective farms), Israel's total industry and state enterprises as the main public sector of the economy is the mainstay of the country's economy. And the Israeli government not only kept the means of production firmly in its own hands, but also intervened in the economy for a long time to maintain a high rate of investment in construction funds. In addition, a steady flow of foreign aid and a large influx of talented people also make the Israeli economy does not lack of strength.
In the early 1960s, Israel's industrial base was quite weak. After the "June 5" war, the huge demand for arms drove the rapid development of Israel's military industry. By the end of the 80s, advanced equipment, a complete range of military enterprises have been built. Since 1986, Israel and the United States jointly invested more than 2 billion U.S. dollars, developed into the "Arrow-2" ballistic missile defense system. After many simulated test firings and successful interceptions of "Scud" missiles, the system has recently been delivered for use in Israel. In addition to meeting domestic demand, Israel's military products are currently exported to more than 60 countries around the world, with exports amounting to about $4 billion.
Since the early 80's, the Israeli government for the development trend of the world economy, to further foster high-tech enterprises, investment direction focused on high-tech-based industrial sectors. At present, Israel has about 130 scientists and engineers for every 10,000 workers, a ratio much higher than that of the United States and Japan. Israel now has more than 3,500 high-tech companies engaged in computer software and biotechnology and other high-tech product development and production, known as the world's Silicon Valley. Israel's exports of high-tech products in 1998 and 1999 for two consecutive years exceeded 10 billion U.S. dollars mark, the average annual exports accounted for 80% of total industrial exports.
In the early 1990s, the government began to guide the development of the venture capital industry, first invested 100 million U.S. dollars in seed money to set up the National Venture Capital Corporation, in order to stimulate and attract domestic and foreign investment, and to find partners for enterprises. So far, there are more than 80 venture capital enterprises in Israel, *** invested more than 3 billion dollars in risk capital, 95% of which flowed to high-tech enterprises, benefited from more than 200 projects. In addition, the government-sponsored high-tech enterprises and basic research-oriented institutions to jointly develop the establishment of high-tech industrial parks up to more than 30.