Qualcomm’s Confidence in Israel’s Economy
Straight from the Jerusalem Boardroom #167, August 24, 2012
While Israel’s economy is increasingly impacted by the global economic meltdown, which has decreased tax income, increasing budget deficit, requiring substantial cuts in government expenditures:
1. Israel’s Central Bureau of Statistics: Israel’s economic growth during the 2nd quarter of 2012 was 3.2%, surpassing the 2.5% expectation, compared with a 2.8% growth during the 1st quarter. Growth per capita increased 1.4%, reaching almost $30,000. Exports of goods and services –40% of Israel’s economic activity - surged 10%, following a decline during the previous three quarters. Private consumption rose by 5.4%. Investment in fixed assets, which constitute a key growth engine, fell by 1.1%. Imports declined 9.3%. Inflation assessment is within the 2%-3% target, but recent and expected price increase raise concerns (Globes, Aug. 17).
2. According to an August 2012 Bloomberg global health survey of 145 countries, Israel ranked 6th in the quality of healthcare it offers its population along with their general health status. The report was based on information by the World Bank, the UN the World Health Organization, and studied life expectancy, mortality rate, and obesity levels among other factors. Israel followed Singapore, Italy, Australia, Switzerland and Japan, ahead of the Holland, France, Canada, Britain and the USA. While Israel's hospitals are crowded, and there is a shortage of doctors and medical staff, medical care in Israel is funded by the government for all citizens, regardless of their financial means. Israelis’ life expectancy is one of the longest in the world.
3. Qualcomm, the $105BN San Diego-based digital wireless telecommunications giant, has acquired Israel’s DesignArt for $130MN, leveraging Israel’s innovative manpower. Qualcomm operates an Israeli R&D center, employing 260 persons (Globes Business Daily, Aug. 23, 2012). Europe’s $5BN STMircoElectronics acquired Israel’s bTendo for $9MN, which will be the core of ST’s R&D center in Israel (Glboes, Aug. 6).
4. The NYC-based OrbiMed Healthcare Fund Management led a $20MN round of private placement by Israel’s Ornim, joined by General Electric. This is OrbiMed’s third investment in Israeli companies (Globes, August 22). William Murphy, the CTO of the NYC-based Blackstone Group announced the first Israeli investment by the world's largest private equity fund - the data security start-up WatchDox Ltd. (Globes, Aug. 14).
5. 35 years ago, the Soviet basketball champion boycotted Israel during the European Championship. During the 2012 London Olympics, David Blatt the Israeli coach of the Russian national team – a former Princeton basketball star, who is also the coach of Israel’s champion Maccabee Tel Aviv – is credited by his Russian players for winning the bronze medal.