Since 1987 the economic relations between Australia and Israel have been on a path of exponential growth.  The tyranny of distance and lack of awareness were some of the reasons for the deficiency of major activities prior to this date.

However, during the past decade there has been a big increase in the volume and nature of the economic relations between Australia and Israel. This can be observed in the number of visitors and delegations to and from Israel and Australia, the number of Israeli companies which opened offices or manufacturing facilities in Australia, the cooperation and information exchange programs which exist, and the volume of trade.

The Israel Trade Commission believes this is just the beginning of prosperous partnerships and the prospects for future development and cooperation are tremendous.

Australia and Israel have much in common. Both are relatively young countries with small populations, of which a high percentage is made up of immigrants.  Both are forced to look outwards to the global market.  Both countries place a great importance on education. There is however one key difference between Israel and Australia, that being Israel's complete lack of natural resources compared to Australia.  This factor accounted for much of the initial trade exports from Australia to Israel, and is still the main source of exports today. Israel imports vast amounts of coal from Australia.

In order to compensate for Israel's lack of natural resources, Israel has had to take advantage of its only other resource, human capital. In the early stages of trading relations, Israel's greatest exports to Australia were in the channels of Agrotechnology, Machinery and Electronics, and whilst these sectors have continued to expand,  the effect of the "new economy" is taking hold.  This is evident when one considers the emerging markets of Information Technology, Telecommunications and Biotechnology.

There is little doubt that the traditional trading climate is undergoing a revolution.  Over the past few years Israel has come to be known the world over as “The Second Silicon Valley”.  A country success story – a source of innovations, which has attracted vast amounts of venture capital.  Australian ministers, Government officials and business people have gone to Israel to see first hand the “Israeli model” of how the government, Industry and Academia supports and actively promotes this development.

A change in thinking has also emerged in Australia recently. There has been growing recognition by the government and companies in past years that in order to compete in the global market, Australia can not be dependent solely on the export of raw material. One has to combine this with “value-added” sectors like IT&T and Biotechnology and become a ‘clever country’. This growth in awareness made it clear that Australia and Israel can learn a lot from each other.  This has attracted an increasing number of high level visits : Senator Richard Alston - the Australian Minister of Communications,  Ms Pridor, the manager of the Israeli Technological Incubator program, and Dr Orna Berry, former Chief Scientist of Israel's Ministry of Industry and Trade, to name just a few examples of this trend. 

As a result of this increased awareness, Australia looked to the Israeli model when developing the programs of support for Venture Capital and Technological Incubators programs and have incorporated aspects of the “Israeli models”.

The following are the four key components of trading relations and opportunities between Australia and Israel – Trade, Investment, Cooperation in R & D, Trade Missions To & From Israel.

Trade

Official figures of Exports to Israel grew from $US59 million in 1996/7 to $US118 million in 2002. Israel’s exports to Australia have also grown strongly during the same period - from $US164 million to $US266 million.

The composition of trade is shown in the following diagrams:

Investmentt

A major trend for Israeli companies in the last few years is to open local offices in Australia. Almost 40 Israeli companies now have a presence in the region.

For more information see http://www.israeltrade.org.au/localoffice/local.html

The level of Australian investment in Israel is also continuing to expand as the opportunities arise.

Cooperation in R & D

Under the auspices of the Office of the Chief Scientist, Israel has established a model of innovation in which start-ups can grow and look for international partners.  The fact that Israel has the largest number of companies outside of North America listed on the NASDAQ is testimony to the success of this Office.

Australia has already recognized the need to implement such policies and have taken steps to initiate the process.  The recently held National Innovation Summit was a success and it was another example of how Australia is looking to learn from the Israeli model.  Dr Orna Berry, the former Israel chief scientist was a keynote speaker at the National Innovative Summit detailing the Israeli model and urging Australia to be a global player.  This is an example of the opportunities for information exchange, which are currently taking place and which must be encouraged.

Trade Missions To and From Israel

There is much activity occurring between the two nations that is helping to facilitate trade.  In recent years many high profile delegations have transpired, all which have served to highlight the opportunities on both sides of the globe.  The Australia – Israel Chamber of Commerce has played an important role in organising many of those missions and developing the awareness of the possibilities on both sides.  

High profile delegation leaders have included:

	Outgoing  Missions
	Leader of the mission	Title of the leader
1989	Mr Tony Berg	Managing Director, Macquarie Bank
1991	Hon Neville Wran	Chairman, CSIRO
1992	Mr Paul Simons	Chairman, Woolworths
1993	Prof. Ron Penney	Director, Centre for Immun. St Vincent
1994	Mr John Gough	Chairman Pacific Dunlop
1995	Mr David Mortimer	Managing Director, TNT
1996	Mr Reg Clairs	Group Managing Director, Woolworths
1997	Mr Charles Goodes	Chairman, ANZ banking Group
1998	Minister Alan Stockdale	Treasurer and Minister for Multimedia, Vic
	Mr Stan Wallis	Chairman Coles Myer, Amcor
	Prime Minister conference
	Mr Colin Chandler	Managing Director, Proton Consulting
1999	Minister Richard Alston	Minister for Communications IT and Arts
	Mr Phil Scanlan	Managing Director/CEO Bonlac Foods
2000	Mr Bob Mansfield	Chairman Telstra
2002	Minister Peter McGauran	Federal Minister for Science
2004	The Hon. Warren Truss	Minister for Agriculture
	The Hon. Peter Beatie	Premier of Queensland
	The Hon Steve Bracks	Premier for Victoria
	Paul O'Sullivan	CEO, Optus
	The Hon. Warren Truss	Federal Minister for Agriculture
	Incoming Missions
1996	Mr Gurion Meltzer	Chairman AICC
1998	Ms Limor Livnat	Minister of Communication
1999	Mr Gurion Meltzer	Chairman AICC
	Mr Max Livnat	Deputy Director General, TAMAS
2002	Enviro 2002 Convention & Congress
2003	Mr Gurion Meltzer	Chairman AICC

These missions are certain to continue as they not only raise the awareness of the opportunities which exist but play an important role in establishing real and beneficial long-lasting business ventures.