From Fruit to Wafers: The History of Israeli Exports

Since the birth of the nation in 1948, exports have soared 13,400% from $6 million to $80.5 billion.

Israeli export has grown hugely since the country's foundation in 1948. How much? It's grown 13,400-fold, says a government report.

Israel's annual exports have risen from $6 million 63 years ago to $80.5 billion, says the report from the from the Israel Export and International Cooperation Institute, an arm of the Ministry of Industry, Trade and Labor, released on the eve of Independence Day.

Israel Jaffa oranges

Diamond exports have grown by a factor of 3,190, from $2.8 million to $8.9 billion over the same period.

"From an exporter of oranges in the early years, Israel has become a developed country... The change is not just quantitative but also qualitative," the institute's chairman, Ami Erel, said Monday.

But he warned that the development of exports over time requires substantial investment in education and research facilities, as well as an effort at sustaining improvement in the level of innovation, areas in which some feel Israel has been falling behind.

Over the decades Israel changed the basis of its exports from citrus and other fresh produce to advanced technology-based exports, the report says. Israel's main exports today include electronics, computer systems and software, silicon wafers, communications and medical instruments.

The Israeli high-tech sector, including research and development services, generated about $28.5 billion in exports last year, representing about 35% of Israel's total exports.

Agriculture represented only about 2% of the country's exports in 2010, despite an increase in 2010 to $1.3 billion.

Analysis of the export data reveals that since 1948, North America and Europe have remained the main destinations of Israeli exports. In the 1950s and 1960s, about 70% of Israel goods sold abroad went to Europe, while currently only about 32% of Israeli exports go to European customers. About 33% of Israel's exports currently go to North America.

In the 1950s, only about 1% of the country's exports were sold to Asian customers, while now 24% of Israeli merchandise headed abroad goes to Asian destinations.

Israel's first trade agreement with a foreign country was signed with Hungary in December 1949, the institute said, in a pact in which the Hungarians committed to supply Israel with beef, grain and machinery, and heavy industrial equipment. For its part, Israel agreed to supply Hungary with paint, chemicals, thread, citrus and dentures. Hungary's trade with Israel is now worth $376 million.

The volume of Israel's overall exports of goods and services is expected to reach $86 billion this year, an increase of 7% in dollar terms, the institute says.