Thought Pieces

The shift of global economic power to giants in Asia and to awakening African countries is transforming Israel’s map of foreign trade, which has traditionally relied on two key trade blocs: the US and the EU. Israel is investing a great deal of resources as well as diplomatic and business efforts to establish trade and investments with Asian and African countries, which on their part, are expressing a great deal of interest in acquiring technologies and knowledge from Israel.

Recent decades have seen an increasing recognition that the focal point of the global economy is gradually shifting to the East, and that Asia possesses, and will continue to possess, a key role in the global economy in lieu of American and European economies. At the same time, after years of civil unrest, famine and hardship, Africa appears to be on the path to growth as well. These two centers of commerce are in Israel’s sights, with Israel striving to gradually decentralize its foreign trade and redirect a growing segment of its exports to these regions.

With China and India, this is a dramatic shift in the distribution of global power. China is already ranked as the second largest economic superpower in the world, and according to one assessment, it is projected to surpass the US in 2030. India is undergoing significant economic reform under the leadership of Prime Minister Modi, and it, too, is contending for the position of a global economic superpower. African countries are still recovering from years of political and economic stagnation. They are undergoing substantial reforms and are hungry for investments.

In recent years, the Israeli high-tech industry has reached exceptional achievements on a global scale, placing Israel at the forefront of global technology innovation.

But this industry is not exempt from problems and challenges, chief among them the need to assure the continuation of the human capital advantage, in light of the grave shortage in skilled personnel (engineers, programmers), the crisis in technology studies and the maturation of the high-tech industry which is causing investors to prefer entrepreneurs who have already proven themselves.

Above all, there is a need to find new growth engines.

In recent years, the Israeli high-tech industry has reached exceptional achievements on a global scale. High-tech exports, for example, were 45 billion dollars in 2017, approximately 45% of total Israeli exports, while the scope of capital raised and the scope of exits reached new heights.

Anyone who examines the Israeli economy over the past three decades understands that Israel has gone from a sleepy economy to a technology tiger by virtue of high-tech.

Israel has already surpassed the per capita GDP of superpowers like France and Britain and is approaching those of industrial giants like Germany and Japan.

The life sciences industry differs from many others, from the investor’s point of view. While the return on investment from a successful development may be huge, the hurdles that must be overcome are many and, in most cases, serious.

Almost every R&D project in the life sciences industry requires substantial investment and it may take years before a successful product is approved for marketing. These factors magnify the importance of IP (mostly patent rights) as a determining factor for the success of investment in the field. Unfortunately, together with other issues discussed further below, they also severely complicate the management of the IP factor in life sciences projects. It is important that life sciences investors appreciate both the dangers of mismanaging IP and the opportunities arising from successful management. Such an understanding is also an invaluable tool in deciding on prospective investments.

There is a long tradition of protection for well-known marks in Israel, but trademark owners need to ensure that they are fully exploiting the advantages of the system. Well-known marks are protected in Israel under the Trademarks Ordinance (New Version) (5732-1972). The ordinance was amended in 1999 in order to comply with Article 16 of the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPs) and Article 6bis of the Paris Convention for the Protection of Industrial Property.