OECD Studies on SMEs and Entrepreneurship SME and Entrepreneurship Policy in Israel 2016 (eBook)
265 Seiten
OECD Publishing (Verlag)
978-92-64-26379-6 (ISBN)
This report examines Israel’s performance in stimulating SMEs and entrepreneurship and makes recommendations for government policy. A dual economy has gradually emerged in Israel, in which high rates of successful technology-based entrepreneurship contrast with low average productivity and growth in traditional SMEs. Israel has excellent framework conditions and programmes for technology-based start-ups and SMEs in areas such as R&D, high-level skills generation and venture capital finance. These strengths need to be maintained. At the same time, more needs to be done to spread success to all types of SMEs and all groups of the Israeli population. This report recommends a range of new and expanded interventions for example in access to credit, broad innovation, workforce skills development, management support and entrepreneurship education. It recommends underpinning these actions with a national SME and entrepreneurship policy strategy and new arrangements for inter-ministerial co-ordination.
This report examines Israel's performance in stimulating SMEs and entrepreneurship and makes recommendations for government policy. A dual economy has gradually emerged in Israel, in which high rates of successful technology-based entrepreneurship contrast with low average productivity and growth in traditional SMEs. Israel has excellent framework conditions and programmes for technology-based start-ups and SMEs in areas such as R&D, high-level skills generation and venture capital finance. These strengths need to be maintained. At the same time, more needs to be done to spread success to all types of SMEs and all groups of the Israeli population. This report recommends a range of new and expanded interventions for example in access to credit, broad innovation, workforce skills development, management support and entrepreneurship education. It recommends underpinning these actions with a national SME and entrepreneurship policy strategy and new arrangements for inter-ministerial co-ordination.
Foreword 5
Table of contents 7
Acknowledgements 12
Abbreviations 13
Basic statistics of Israel 14
Executive summary 15
Key findings 15
Key recommendations 16
Chapter 1.Assessment and Recommendations 19
1. SME and entrepreneurship structure and performance 20
SMEs play an important role in the economy 20
Figure 1.1. Employment by enterprise class size, total business economy, 2012 or latest available year 20
Israel boasts strong entrepreneurship intentions and start up rates, but gaps in capabilities 20
Figure 1.2. Total early stage entrepreneurial activity rate across OECD countries, 2013 21
Israel has a growing stock of businesses but weak business dynamics 21
Figure 1.3. Number of enterprises in Israel, 2004-11 22
Figure 1.4. Annual employer enterprise birth rates, death rates and churn rates across selected countries and Israel, 2012 or latest available year 22
There is scope to strengthen SME innovation and productivity 23
Figure 1.5. Innovation in SMEs by type of innovation and compared to large firms (total), 2010-12 23
Figure 1.6. Labour productivity in manufacturing by business size class and sector, 2012 or latest available year 24
Youth entrepreneurship is healthy, but there are entrepreneurship inequalities for women, seniors, recent immigrants and Arab Israeli entrepreneurs 24
Table 1.1. Total early-stage entrepreneurial activity by ethnic background, 2009-10 25
Key recommendations on SME and entrepreneurship performance 25
2. Business environment and framework conditions 25
Domestic macroeconomic conditions are favourable 25
Aspects of the regulatory environment remain restrictive for business creation and SME development 25
Figure 1.7. Product market regulations across OECD countries, 2003 and 2013 26
High participation in tertiary education co-exists with weak vocational and entrepreneurship skills 26
Figure 1.8. Israeli student performance in mathematics, science, reading and financial literacy, 2012 27
Israel’s innovation system is strong, but weighted to R& D
Figure 1.9. R& D expenditure by performing sector, 2013
Israel boasts a very strong equity market, but gaps in loan finance persist 27
Figure 1.10. Top ten OECD countries for venture capital investments, 2014 28
The tax environment is favourable, particularly for large, R& D-intensive companies
Inward foreign direct investment is weighted to R& D in ICT
Key recommendations on business environment and framework conditions for SMEs and entrepreneurship 29
3. Strategic framework and policy delivery system 30
The creation of the SMBA has strengthened Israel’s SME and entrepreneurship policy 30
The SMBA manages its key support services through intermediary organisations 31
SMBA has an important role to play in policy co-ordination 31
A national strategy document and an inter-ministerial committee and working group would help 31
Key recommendations on the strategic framework and policy delivery system 32
4. National programmes for SMEs and entrepreneurship 33
The government has made important interventions to foster SME and entrepreneurship finance, but gaps remain 33
R& D programmes are successful, but more emphasis is needed on other types of innovation
More support is needed for new and small exporters 34
There are no major programmes for developing skills in existing SME workforces 34
MAOF centres are building up business development services, but could go further 34
Public procurement can be better tapped as a driver of SME growth and innovation 35
Support for entrepreneurship in disadvantaged social groups is limited 35
Key recommendations on national programmes 35
5. The local dimension 38
There is no regional level of government in Israel, and local government action for SMEs is limited 38
Local authorities can improve their business licensing, procurement, planning and property development activities for SMEs 39
National enterprise and regional policy include limited emphasis on building local supply chains and clusters 39
Key recommendations on the local dimension of SME and entrepreneurship policy 40
6. SMEs and entrepreneurship in the Arab Israeli population 40
Expansion, diversification and upgrading of Arab-owned SMEs is required for national growth and equity 40
Table 1.2. Distribution of Arab- and Jewish-owned employer businesses by enterprise size, 2014 41
Access to finance is an obstacle 41
SMEs lack suitable premises 41
Workforce skills and management practices should be strengthened 42
Addressing these problems, and a public procurement stimulus, can tackle the market demand constraint 42
Further investment in MEDA will be crucial 43
Key recommendations on SMEs and entrepreneurship in the Arab Israeli population 43
7. Medium-Sized Enterprises 45
Israel’s medium-sized enterprises have relatively weak productivity performance 45
Figure 1.11. Labour productivity by enterprise size, manufacturing 45
There are few opportunities for workforce training in medium-sized firms 46
Management skills and practices need upgrading 46
Difficulty accessing appropriate finance is another barrier 46
There is no major supply chain development programme 47
Opening up of public procurement could have important benefits for MSE growth 47
There is only limited innovation support for traditional manufacturing MSEs 47
Key recommendations on medium-sized enterprises 47
References 48
Chapter 2.SME and entrepreneurship performance in Israel 51
The size and structure of the SME sector 52
The size analysis 52
Figure 2.1. Enterprises by business size class, total business economy, 2012 or latest available year 52
Employment by enterprise class size, total business economy, 2012 or latest available year 53
Figure 2.2. Enterprise and employment distribution by enterprise size class and industry, 2013 or latest available year 54
Figure 2.3. Value added by enterprise size class, 2012 or latest available year 55
High-impact SMEs 53
Figure 2.4. Share of high-growth firms and gazelles in OECD countries, 2012 and 2008 (or latest available years) 56
Self-employment 55
Figure 2.5. Share of non-employer enterprises in OECD countries, 2012 or latest available year 57
Figure 2.6. Self-employment rate in selected OECD countries, 2010 57
Informal economy 55
Figure 2.7. Estimates of the size of the informal economy in OECD countries, 2011 58
Business demography 58
Business births and change in stock 58
Number of enterprises in Israel, 2004-11 59
Figure 2.8. Number of business sector jobs in Israel, 2003-11 59
Figure 2.9. Growth in number of firms and number of jobs by sector in Israel, 2003-11 60
Figure 2.10. Employer enterprise birth rates and death rates in Israel and OECD average, 2006-13 60
Figure 2.11. Annual employer enterprise birth rates by sector and size classes in Israel, 2013 61
Table 2.1. Annual job creation by business births and job destruction by business deaths in Israel, 2005-09 62
The rate of churn of employer enterprises 62
Annual employer enterprise birth rates, death rates and churn rates across selected countries and Israel, 2012 or latest available year 62
Figure 2.12. Share of young firms (aged 3 years or less) in industry and services, 2012 or latest available year 63
Share of young firms 64
SME productivity, innovation and exporting 64
Productivity by size class 64
Figure 2.13. Labour productivity by business size classes and sector, 2012 or latest available year 65
Table 2.2. Labour productivity by enterprise size and type of industry, 2010 65
Export activity in SMEs 64
Figure 2.14. Exports by enterprise size in selected OECD countries, 2011 or latest available year 66
Innovation activity in SMEs 64
Figure 2.15. Business enterprise spending in R& D (BERD), 2012 and 2002
Figure 2.16. Share of BERD undertaken by small firms, 2013 or latest available year 67
Innovation in SMEs by type of innovation and compared to large firms (total innovation), 2010-12 68
Figure 2.17. Firms collaborating on innovation by firm size and by type of collaboration, 2010-12 69
Table 2.3. SMEs active in innovation, Israel, 2006-08 70
Table 2.4. SMEs active in technological innovation by size class and type of innovation, 2006-08 70
Entrepreneurship: attitudes and performance 68
Attitudes towards entrepreneurship 68
Figure 2.18. Entrepreneurial attitudes in Israel compared to the OECD average, 2013 70
Figure 2.19. Evolution of entrepreneurial attitudes in Israel, 2007-13 71
From intentions to action: early-stage entrepreneurial activity 71
Total Entrepreneurial Activity (TEA) rate across OECD countries, 2013 72
Figure 2.20. Characteristics of early-stage entrepreneurship, 2013 73
Social target groups 72
Figure 2.21. Female total early-stage entrepreneurial activity rate and gender gap, 2013 74
Figure 2.22. Female self-employment rate and gender gap, 2013 75
Figure 2.23. Youth (15-24) self-employment rates, men and women, 2013 75
Figure 2.24. The self-employment rate of seniors (65+), average 2009-11 76
Figure 2.25. Total early-stage entrepreneurial activity rate by gender and age group, Israel, 2010 76
Total early-stage entrepreneurial activity by ethnic background, 2009-10 77
Conclusions and policy recommendations 77
Key recommendations on SME and entrepreneurship performance 78
Notes 78
References 79
Chapter 3.Business environment and framework conditions in Israel 81
Macroeconomic conditions 82
GDP growth 82
Figure 3.1. Annual GDP growth rates (volume), 2001-16 82
Labour market trends 82
Figure 3.2. Evolution of main labour market indicators, Israel, 2001-13 83
Figure 3.3. Main labour market indicators in Israel and OECD countries, total and by sex, 2014 83
Figure 3.4. Employment protection legislation across OECD countries, 2013 84
Figure 3.5. GDP, labour productivity and average wage growth in Israel, 2006-14 85
Labour productivity 84
Figure 3.6. Labour productivity in Israel compared with main economic areas, 2000-15 86
Monetary and fiscal policy 85
Product market regulations and the ease of doing business 85
Product market regulations across OECD countries, 2003 and 2013 87
Figure 3.7. Product market regulations by main area in Israel, 2008 and 2013 87
Table 3.1. Israel’s profile in the World Bank’s Doing Business Survey, 2016 88
Table 3.2. Starting a business in Israel, 2016 88
Box 3.1. The Canadian online service for business permit and licensing 89
Human resources 91
Tertiary education 91
Figure 3.8. Percentage of adults who have attained tertiary education across OECD countries, 2014 91
Secondary education 91
Israeli student performance in mathematics, science, reading and financial literacy, 2012 92
The vocational education and training school system 92
Box 3.2. The Zur Lavon Training Centre, Israel 94
Box 3.3. The Employer Ownership of Skills Pilot, United Kingdom 95
Entrepreneurial culture and skills 98
Box 3.4. The Bronica Entrepreneurship Centre at Technion, Israel 99
Box 3.5. The Misgave Elementary School, Israel 99
Box 3.6. From ABC to Ph.D. – The Nordic approach to entrepreneurship education 100
The innovation system 102
Figure 3.9. R& D personnel across OECD countries, 2013
R& D expenditure by performing sector, 2013
Figure 3.10. The internationalisation of Israel’s R& D, 2011 and 2013
Figure 3.11. Share of business R& D by sector, 2013 or latest available year
Figure 3.12. Business R& D in manufacturing by R&
Figure 3.13. The Revealed Technological Advantage of Israel, 2010-13 107
Figure 3.14. Direct government funding for business R& D, 2013
Figure 3.15. Firms receiving public support for innovation across OECD countries, by firm size, 2010-12 108
Access to finance 108
Debt finance 108
Figure 3.16. Volume of outstanding (stock) business loans, Israel and selected G7 economies, 2014 109
Table 3.3. Outstanding business loans in Israel, 2007-14 110
Equity finance 111
Top ten OECD countries for venture capital investments, 2014 111
Table 3.4. Venture capital investments in Israel, by origins of the fund, 2007-12 112
Taxation affecting small business 112
Figure 3.17. All-in average income tax rates and all-in tax rate less cash transfers at average wage, 2015 113
Box 3.7. Denmark’s Home-Job Plan 114
Figure 3.18. The combined corporate income tax rate across OECD countries, 2016 115
Foreign Direct Investment 116
Figure 3.19. FDI inflows across OECD economies, 2015 116
Figure 3.20. Inward FDI flows in Israel, 2005-15 117
Conclusions and policy recommendations 117
Key recommendations on business environment and framework conditions for SMEs and entrepreneurship 118
Notes 119
References 120
Chapter 4.The strategic framework and policy delivery system in Israel 123
The strategic policy framework 124
Box 4.1. Functions of the Israeli Small and Medium Business Agency (SMBA) 125
Coordination across government ministries and agencies 126
Table 4.1. Israeli ministries and agencies involved in SME and entrepreneurship policies and programmes 127
Box 4.2. Authorities to be granted to the SMBA under the proposed SME Bill 129
Box 4.3. The Inter-ministerial State Council on Small and Medium Enterprises and Entrepreneurship, Spain 129
Dialogue with SMEs and entrepreneurs 131
Box 4.4. Example of a SME Advisory Committee, Ireland 132
The programme portfolio and mix 132
Strengthening the policy focus on raising the level of innovativeness of non-technological SMEs 132
Increasing programme support for new business creation, especially in non-technological fields 133
Promoting the growth of traditional SMEs 133
Programmes for the development of young entrepreneurs 133
Policy to foster integration of entrepreneurship throughout the education system 134
Policy delivery arrangements 134
Figure 4.1. Schematic of the main policy delivery structures for SME support in Israel 135
The SMBA 136
Box 4.5. SMBA’s One-Stop Shop SME programme information service 137
Box 4.6. Evaluating entrepreneurship and SME policies and programmes 139
The Authority for Economic Development of the Minorities Sector (MEDA) 140
The Israel Innovation Authority (IIA) 140
The Foreign Trade Administration (FTA) and the Israel Export Institute (IEI) 140
Ministry of Immigrant Absorption 141
Conclusions and policy recommendations 141
Key recommendations on the strategic framework and policy delivery system 142
Note 143
References 143
Chapter 5.National programmes for SMEs and entrepreneurship in Israel 145
Access to finance programmes 146
The State Credit Guarantee Programme 146
Box 5.1. The operation of the SMBF 147
Table 5.1. SMBF-guaranteed loans, April 2012-June 2014 149
Table 5.2. Approved and executed loan guarantee credit volumes, 2007-13 149
Table 5.3. International practices in loan guarantee programme fees and commissions 150
Box 5.2. Determining guarantee fees in Japan’s Credit Guarantee Corporations 150
Micro-enterprise lending 151
Venture capital 152
Box 5.3. The YOZMA Venture Capital Fund, Israel 153
Business angels 154
Alternative financial instruments 154
Box 5.4. Business Development Companies (BDCs), United States 155
Box 5.5. The Small Business Investment Company (SBIC) programme, United States 157
Innovation programmes 161
Israel Innovation Authority (IIA) programmes 161
Box 5.6. Technion-Israel Institute for Technology, Israel 162
Box 5.7. The Kibbutz Industries Association – building capacity to manage the innovation process 165
Start-up accelerators 165
The Israel Investment Centre 166
Green innovation programmes 166
Non-technological innovation programmes 167
Box 5.8. Innovation Agents, Denmark 168
Box 5.9. Innovation Networks, Denmark 170
SME internationalisation programmes 171
Foreign Trade Administration 172
Israeli Export Institute (IEI) 173
Box 5.10. SME Exporting Assistance: the case of Enterprise Ireland Programmes 173
Export financing 174
SME workforce skills development programmes 175
Box 5.11. Apprenticeship Carolina 176
Business diagnosis, advice and consultancy programmes 177
Box 5.12. The Single Business Service and Entrepreneurs’ Infrastructure Programme, Australia 178
Box 5.13. The Early Warning programme, Denmark 179
SME public procurement programmes 181
Box 5.14. The Korean On-line Procurement System (KONEPS) 182
Support for social target groups9 182
Box 5.15. The Sunbeam programme, Israel 183
Box 5.16. Créajeunes, France 184
Conclusions and policy recommendations 185
Key recommendations on national SME and entrepreneurship support programmes 187
Notes 190
References 190
Chapter 6.The local dimension to SME and entrepreneurship policy in Israel 193
The role of local government 194
Local government responsibilities 194
Business licensing 194
Planning permission 194
Industrial site provision 195
Local economic development programmes 195
Potential capacity-building support 195
Co-ordination among local authorities 196
Box 6.1. Inter-municipal cooperation company Leiedal, South West Flanders 197
Tailoring policies to local conditions 198
Local variations in SME and entrepreneurship activities and conditions 198
Figure 6.1. Number of enterprises per capita and enterprise births per capita in Israeli districts, 2005-11 199
Figure 6.2. Self-employed earnings per capita by main ethnicity of the local authority district, 2011 200
Building local clusters and supply chains 199
Box 6.2. The Centres of Expertise Programme (OSKE), Finland 1994-2013 201
Table 6.1. Traditional and modern approaches to regional policy 204
Box 6.3. The EU Smart Specialisation Strategies 204
Conclusions and policy recommendations 206
Key recommendations on the local dimension of SME and entrepreneurship policy 207
References 207
Chapter 7.Entrepreneurship and SME development in the Arab Israeli population 209
Socio-economic conditions of Arab Israelis 210
Arab Israeli early-stage entrepreneurship 210
Table 7.1. Rate of total early-stage entrepreneurial activity in Israel and its Arab population, 2009-13 211
Table 7.2. Perceptions of entrepreneurship in Israel’s Arab and Jewish populations, 2013 211
Characteristics of Arab-owned SMEs 212
Distribution of Arab- and Jewish-owned employer businesses by enterprise size, 2014 212
Table 7.3. Distribution of employment in Arab- and Jewish-owned employer businesses by enterprise size, 2014 213
Table 7.4. The distribution of Arab- and Jewish-owned employer businesses by industry sector 213
Constraints on Arab Israeli SME and entrepreneurship development 214
Local market demand 214
Box 7.1. Minority Supplier Development, United Kingdom 215
Box 7.2. Supplier Diversity Europe 216
Workforce skills 217
Figure 7.1. Labour force participation rates by sex and years of education, Arab Israelis and Jewish Israelis, 2013 218
Management skills and practices 218
Box 7.5. Going for Growth, Ireland 220
Access to finance 221
Lack of industrial and commercial premises 224
Table 7.5. Central government support for the development of industrial zones in Arab communities 2010-16 225
The spearheading and co-ordinating role of the MEDA 226
Table 7.6. Main government programmes for Arab Israeli business development and the role of MEDA and implementation partners 228
Box 7.3. Institutional arrangements and responsibilities for minority economic development in the USA 230
Conclusions and policy recommendations 233
Key recommendations on SMEs and entrepreneurship in the Arab Israeli population 234
Notes 235
References 235
Chapter 8.Medium-sized enterprises in Israel 237
The relevance of MSEs 238
Table 8.1. Employer enterprises and employee jobs by business size class, 2012 238
Productivity and innovation performance 239
Labour productivity 239
Figure 8.1. Labour productivity by enterprise size, total economy 239
Figure 8.2. Labour productivity by enterprise size, manufacturing and services 240
Innovation 241
Table 8.2. R& D expenditure by business size class and industry, 2010-12
Table 8.3. Manufacturing R& D expenditure by size class and technology intensity, 2010-12
Table 8.4. Technological innovation in manufacturing by type and business size class, 2010-12 242
Table 8.5. Non-technological innovation in manufacturing by type and business size class, 2010-12 242
Policy levers for MSE development 242
Workforce skills development 242
Improving management skills and practices 243
Box 8.1. Management 4 Growth Programme, Ireland 244
Box 8.2. The Growth Accelerator, the Netherlands 245
Access to finance 247
Box 8.3. The Enterprise Investment Scheme (EIS), United Kingdom 248
Box 8.4. The “OurCrowd” crowdfunding platform, Israel 250
Box 8.5. Main principles of new crowdfunding regulation in Israel 251
Box 8.6. The Crowdfund Act under the JOBS Act, USA 251
Supply chain development 252
Targeted public procurement 253
Innovation support 254
Box 8.7. A selection of Israeli R& D programmes catering to MSEs
Box 8.8. Knowledge Transfer Partnerships (KTP), United Kingdom 255
Conclusions and policy recommendations 256
Key recommendations on medium-sized enterprises 257
Note 257
References 257
Chapter 2. SME and entrepreneurship performance in Israel1
This chapter investigates SME and entrepreneurship characteristics and performance in Israel in comparison with other OECD countries. It presents the numbers of SMEs, their employment and value-added contributions to the economy, and their export and innovation levels and shows breakdowns by SME sectors and size bands. It also explores entrepreneurship behaviours and attitudes in Israel by population group. There are several clear areas of excellence in Israel’s SME and entrepreneurship activity, including a high business creation rate and a large share of high-impact enterprises. At the same time, there are relatively low numbers of SMEs and low levels of SME productivity, particularly in manufacturing. There is also a strong dualism whereby very productive high-technology SMEs and start-ups operate alongside a much less efficient and relatively underdeveloped traditional SME sector. Entrepreneurship rates are also much higher among men than women.
The size and structure of the SME sector2
The size analysis
Small and medium-sized enterprises (SMEs) constitute 99.8% of Israel’s business enterprises (Figure 2.1). Only 0.2% of Israeli employer businesses have more than 250 workers, i.e. around 500 companies. The predominance of SMEs in the business population is common to all OECD countries, although the proportion of enterprises that are SMEs in Israel is slightly above the OECD average. Micro-enterprises (1-9 employees) account for 92.3% of all businesses in Israel compared with an OECD average of 90.0%, small enterprises (10-49 employees) account for 6.3% of businesses compared with an OECD average of 8.3% and medium-sized enterprises (50-249 employees) account for 1.5% of businesses compared with an OECD average of 0.7%. Thus, compared to the OECD average, the Israeli SME economy is weighted towards the micro-enterprise segment.
Note: Countries are presented in descending order, from the country where SMEs (up to 249 employees) are the biggest share of the total business population to the country where they are the smallest share. All countries present information using the enterprise as the statistical unit except Korea and Mexico which use establishment. For Canada and the United States, data do not include non-employer enterprises. Data for Korea include financial services. Different size classes apply to Australia (1-19; 20-199; 200+), Korea (1-9; 10-49; 50-299; 300+), Mexico (1-10; 11-50; 51-250; 251+), Turkey (1-19; 20-49; 50-249; 250+).
Source: OECD based on OECD (2015a), Entrepreneurship at a Glance 2015, OECD Publishing, Paris.
Some 69.3% of the business sector workforce is employed by an SME in Israel, which is slightly greater than the OECD average of 68.7% (Figure 1.1 reproduced below). Medium-sized firms (50-249 employees) account for 18.9% of national business employment compared with the OECD average of 17.7% and small companies (10-49 employees) account for 23.4% of the business workforce compared to an OECD average of 21.0%. On the other hand, only 27.0% of the employed labour force in the business economy is engaged in a micro-enterprise in Israel, which is below the OECD average of 29.1%. Given the above average share of micro enterprises in business numbers, this suggests that micro firms are relatively small in Israel compared with other OECD countries.
Note: Countries are presented in descending order, from the country where the SME sector as a whole (up to 249 employees) accounts for the largest share of national employment to the country where it explains the smallest share. All countries present information using the enterprise as the statistical unit except Korea and Mexico which use establishment. For Canada and the United States, data do not include non-employer enterprises. Data for Korea include financial services. Different size classes apply to Australia (1-19; 20-199; 200+), Korea (1-9; 10-49; 50-299; 300+), Mexico (1-10; 11-50; 51-250; 251+), Turkey (1-19; 20-49; 50-249; 250+). This Figure appears as Figure 1.1 in this report.
Source: OECD based on OECD (2015a), Entrepreneurship at a Glance 2015, OECD Publishing, Paris.
SMEs make up the vast majority of enterprises in Israel in both manufacturing and services, but their share of total business employment is greater in services (69%) than in manufacturing (60%). The SME employment shares within these two sectors are slightly below the OECD averages, respectively 71% and 62%. Whereas the employment shares of micro and small firms in manufacturing and micro firms in services are smaller than the OECD averages, the employment shares of medium-sized firms in manufacturing and medium and small firms in services are greater than the OECD averages (Figure 2.2). These results stem from relatively small sizes of Israeli small manufacturing and micro services enterprises and a relative dearth in both numbers and employment in Israeli micro manufacturing firms.
Source: OECD based on OECD (2015a), Entrepreneurship at a Glance 2015, OECD Publishing, and OECD (2014), Entrepreneurship at a Glance 2014, OECD Publishing, Paris.
SMEs generate 62.3% of business economy value added in Israel, which is above the OECD average of 57.9%. Each of the main SME size bands in Israel contributes a greater share of national business value added than the OECD average (Figure 2.3).
Note: Countries are presented in descending order, from the country where the SME sector as a whole (up to 249 employees) accounts for the largest share of national employment to the country where it explains the smallest share. The same country-specific considerations of Figure 2.1 apply to Figure 2.4.
Source: OECD based on OECD (OECD, 2015a), OECD Entrepreneurship at a Glance 2015, OECD Publishing, Paris.
High-impact SMEs
Israel performs quite well among OECD countries in generating high-impact SMEs in services, although its performance is not exceptional in manufacturing (Figure 2.4). High‐growth firms, i.e. firms that are able to grow rapidly over a short period of time, made up 3.1% of the total in industry, 4.4% in services and 5.0% in construction in Israel in 2013. Such firms tend to account for a substantial proportion of new job creation in a country, for example, Henrekson and Johansson (2010) found that around 4-6% of the fastest growing firms produced half-to-three quarters of new jobs across a range of OECD countries. In addition, high-impact SMEs tend to generate positive knowledge spillovers and often become role models for budding entrepreneurs.
Note: The OECD defines high-growth firms, from an employment point of view, as firms with average annualised growth in employees greater than 20% a year, over a three-year period, and with ten or more employees at the beginning of the observation period, while gazelles are high-growth firms which have been employers for a period up to five years.
Source: OECD based on OECD (2015a), Entrepreneurship at a Glance 2015, OECD Publishing.
Gazelles are a sub-set of high-growth firms, in that they are high-growth firms that are start-ups or that have been recently established. Gazelles represent 0.3% of all firms in industry, 2.1% in services and 0.9% in construction, which, with the exception of industry, are values significantly higher than those in the other benchmarked countries. It is this type of performance that has given rise to the image of Israel as a “start-up nation” where growth-oriented entrepreneurship can thrive.3
Relative to 2008, the proportion of high-growth firms in the economy has decreased in manufacturing and services. This is partly related to lower economic growth rates in the period immediately following the global economic crisis but is also the statistical outcome of a continued surge in the total number of firms in the national economy, most of which do not achieve high-growth status.
Self-employment
On average, 51% of active...
| Erscheint lt. Verlag | 21.11.2016 |
|---|---|
| Sprache | englisch |
| Themenwelt | Technik |
| Wirtschaft ► Volkswirtschaftslehre | |
| ISBN-10 | 92-64-26379-9 / 9264263799 |
| ISBN-13 | 978-92-64-26379-6 / 9789264263796 |
| Informationen gemäß Produktsicherheitsverordnung (GPSR) | |
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