10.3 Sectors in Israel that make up Israel’s Bioeconomy
Agricultural sector
In 2008, the agricultural sector constituted 2.5% of Israel’s overall GDP accounted 3.6% of the country total exports. Despite the fact that only 3.7% of the workforce was engaged in agriculture, Israel achieved an impressive level of self-sufficiency, producing 95% of its own food necessities. To complement this self-production, Israel relied on imports of commodities such as grains, oilseeds, meat, coffee, cocoa, and sugar. The agricultural sector plays a significant role in Israel’s bioeconomy, contributing approximately 2-3% to the country’s GDP. This sector focuses on crop cultivation, livestock farming, and the production of various agricultural products. It has a strong emphasis on innovation and sustainable farming practices, given the limited availability of arable land and water resources. Israeli agriculture has pioneered advanced irrigation techniques, such as drip irrigation, which have been adopted globally.
Agriculture in Israel is stands as a remarkable tale of resilience and adaptation, defying challenging environmental constraints, particularly the scarcity of natural resources like water and arable land. This intensive agricultural system has not only thrived but also expanded its capabilities in a country where more than half of the land is desert. The core of Israel’s agricultural success lies in the seamless collaboration between researchers, farmers, and agriculture-related industries, consistently pushing the boundaries of innovation across all agricultural domains. Israel’s agricultural journey, stemming from necessity, holds valuable lessons for the developing world. In a harsh environment with limited water resources, Israeli farmers and scientists have showcased exceptional determination and creativity in nurturing a thriving agricultural sector. They have demonstrated to the world that the real worth of land is determined by how effectively it is utilized. This productive synergy between research and development and industry has led to the creation of a market-oriented agri-business, exporting agricultural technology solutions globally, with a particular focus on water-related solutions. Since its early beginnings in the late 19th century, when Jewish settlers returned to their historic homeland, Israel has been dedicated to transforming arid lands into fertile fields, often driven by ideological motivations. The agricultural feats in Israel have been possible due to the close partnership between farmers and government-funded researchers. This collaboration has resulted in the implementation of advanced methods, technological breakthroughs, and innovative techniques and agro-mechanical equipment. Since achieving independence in 1947, Israel has significantly increased its cultivated land, growing it by a factor of 2.70, to encompass around 1.2 million acres. However, the irrigated land area, which had reached about 0.66 million acres until the mid-1980s, has been reduced to less than half a million acres due to mounting water scarcity and urbanization. The agricultural settlements has also grown from 401 to 751 over the past half-century, although the proportion of the population residing in these settlements has decreased from 11 percent to less than five %.
Presently, Israel sustains a significant portion of its food requirements through domestic production, with supplemental imports, primarily of commodities like grains, which are balanced by agricultural exports. Key agricultural products encompass dairy and poultry items, alongside a rich variety of flowers, fruits, and vegetables, especially in warm regions that provide an advantage for Israeli farmers in the European markets. Israel becomes a significant supplier to Europe during the winter months, exporting items such as melons, tomatoes, cucumbers, peppers, strawberries, kiwis, mangoes, avocados, various citrus fruits, as well as long-stemmed roses and spray carnations.
Over time, the agricultural sector’s contribution to Israel’s Gross National Product (GNP) has gradually decreased, falling from 11.1 percent in 1951 to 2.7 % in 2008. Similarly, the share of agricultural exports as a part of total exports has dropped from 60 percent to less than 2 percent. Nevertheless, there has been a significant absolute increase in annual exports from $21 million in 1950 to $1.2 billion in 2009. This shift can be attributed to the widespread adoption of innovative farming techniques, modern irrigation, water treatment technologies, and a transition towards export-oriented farming practices.
Biotechnology and Life Sciences
The biotechnology and life sciences sector is a critical component of Israel’s bioeconomy, contributing to both GDP and job creation. Israel is renowned for its innovation in biotechnology and life sciences. This sector encompasses pharmaceuticals, medical devices, genetics, and genomics research. Israeli companies have made significant advancements in the development of medical treatments, diagnostic tools, and biopharmaceuticals, contributing to both economic growth and global health improvements.
Currently, Israel hosts approximately 160 biotechnology companies, covering a wide spectrum of technologies encompassing therapeutic pharmaceuticals, diagnostics, bioinformatics, and agricultural biotechnology. In the year 2000, there were 25 newly established companies in this sector, with private investments totaling $203 million, and three firms successfully raised $140 million through foreign stock exchanges. The biotechnology industry employed around 4,000 individuals, achieving sales of $800 million, marking a notable increase from the previous year when it stood at $600 million. Remarkably, 80% of the biotech products were directed toward international markets. Nonetheless, despite the industry’s robust growth in recent years, the total sales of biotechnology-derived products in the country remained a relatively small fraction when compared to Israel’s Gross Domestic Product (GDP) of $93 billion. Several factors may contribute to this phenomenon, including the fact that a significant portion of biotech companies is still in early developmental stages, the presence of a scarcity of commercially viable technologies, and many struggling with insufficient funding.
Environmental and Renewable Energy Technologies
Israel’s bioeconomy also includes the environmental and renewable energy technologies sector, contributing to the country’s efforts to ensure sustainable resource management. In 2022, 11.8% of Israel’s energy mix came from renewable energy sources, totaling 4,765 MW in renewable energy production capacity With a strong emphasis on sustainability, this sector focuses on developing and implementing clean and renewable energy solutions. Israel has made substantial investments in research and development related to solar energy, wind energy, and water treatment technologies. As part of the bioeconomy, these technologies not only reduce the environmental impact but also create economic opportunities.These sectors, among others, collectively contribute to Israel’s bioeconomy, which is marked by a commitment to harnessing biological resources for economic development while minimizing environmental impact. Israel’s unique blend of innovation, research collaboration, and resource-efficient practices positions it as a leading player in the global bioeconomy.