Total exports from Israel in 2020 fell by just 3 percent to $107 billion, with the strong shekel creating additional difficulties for Israeli exporters. However, Israeli companies have been able to react relatively well to exchange rate fluctuations and have not been hit as hard by the strength of their national currency as in the past.
Exports of goods fell 4 percent to $54 billion last year, while business services rose 9 percent to $47 billion. The high-tech sector, which generated profits with developments in cybersecurity, fintech and other fields, was primarily responsible for this increase.
The share of technology exports in Israel’s overall economy continues to grow, with sales in this area doubling over the past six years. High-tech services and physical goods make up about half of all Israeli exports. Since the Jewish land has few raw materials, this figure is not surprising. In the beginning, Israel was an agrarian society, and its transformation into the “Startup Nation” began in the agricultural sector.
The corona crisis even helped the technology companies, as there was great demand for digital products and services. Meanwhile, increasing cyber crime is driving demand for Israeli cybersecurity expertise.
The peace agreements with the Gulf states are also bearing their first fruits, with local markets opening up and eager to do business with Israeli companies. Gaining a foothold in the UAE and Bahrain will also enable Israeli companies to reach out to potential partners in countries that still don’t have diplomatic relations with the Jewish state.