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From Workshops To High Tech:
Israeli Industry Turns 100

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c ts—W4

40

FRIDAY, DECEMBER 18, 1987

0

ne hundred years ago,
when Leon Stein, a
mechanical engineer
from Poland, opened his iron
casting and machine con-
struction workshop in Neve
Tzedek, the Jewish suburb of
Jaffa that would later become
Tel Aviv, there was no trace of
industry in Palestine. The
total population of the coun-
was 500,000, of whom a
mere 45,000 were Jews, and
Palestine was still a neglected
province of the Ottoman
Empire.
By 1900, Stein's workshop
had grown into a factory
employing 150 workers, mak-
ing among other items, a
filter for water pumps, in-
vented by Stein, which enabl-
ed great expansion of the
developing citrus orchards.
Later on, Stein also found a
way to adapt oil burning
engines so that they could use
coal. During World War I, this
enabled the engines to con-
tinue to operate the al-
important water pumps when
liquid fuel was unobtainable.
The next innovator in the
industrial desert was Baron
Edmond de Rothschild who,
out of concern for the grape-
growing colonies he had
established in Palestine,
opened two wineries, one in
Rishon Lezion in 1889 and
one in Zichron Yaakov in 1891
and a glass-bottle factory in
1895. The Rishon Lezion
winery possessed the first
electric generator in
Palestine.
Today, industry now brings
in 65 percent of Israel's export
profits, while employing only
24 percent of the work force.
The range of products is wide,
considering the small size of
the home market.
Israel's industry is divided
into three main sections:
private enterprise, labor
. federation (Histadrut) enter-
prises and government in-
dustry, the result of Israel's
special history. The largest
company is the Histadrut
holding company, Koor, which
is a very varied and, for
Israel, large industrial
empire.
There have been some
dismal failures in industrial
development, such as the at-
tempt to have automobiles
assembled in Israel. This
seems to have been based on
the wishful thinking that,
since the USA, the richest
country in the world, had an
automobile industry, then if

Sorting and pressing at the Zichron Yaakov Winery in 1953.

Israel had such an industry,
she too would be prosperous.
Such failures, however, have
been rare.
Thday there is an advanced
and profitable chemical in-
dustry, including the Dead
Sea Works and Israel
Chemicals. Food products are
exported everywhere. The dia-
mond polishing industry, that
produces more than 50 per-
cent of the world's industrial
and gem-quality diamonds, is
Israel's single largest export
industry and the largest dia-
mond industry in the world.
Science-based industry is
encouraged both with govern-
ment incentives and with
special science-based industry
parks that provide the com-
plex infrastructure needed by
these industries.
Defense and armaments
items (including aircraft)
have been deliberately
developed as export in-
dustries to enable Israel to
equip its own defense forces
and to reduce reliance on
foreign weapons suppliers.
This is a necessity dictated by
Israel's delicate political
situation.
In 1906, the first modern
oil-pressing factory was
established, and this was
followed by various work-
shops that provided employ-
ment for the growing Jewish
community in Palestine.
After World War I and the
establishment of the British
Mandate, larger factories, in-
cluding the Nesher Portland
Cement Factory (1925), began

to arise. In 1934, the first
pharmaceutical company was
founded. Between 1933 and
1937, 600 factories were
established, most of them in
the Haifa industrial area.
World War II changed the
situation dramatically: im-
ports ceased and local produc-
tion was encouraged. By
1943, industry was, for the
first time, more important
than agriculture. At that
time, industries characteristic
of advanced economies began
to develop, such as machine
building, toolmaking, chemi-
cals and pharmaceuticals,
fine mechanics and optical
instrument-making.
industrial school.
After Israel achieved in-
dependence in 1948, there
was a temporary regression
in the quality of industry.
Building became the main in-
dustrial branch, because of
the need to build homes for
the flood of new immigrants,
and labor-intensive textile
plants were established in
order to employ them. Since
many of these did not do well;
their establishment was later
criticized. At that time, there
was insufficient trained man-
power for more advanced in-
dustries, and the textile fac-
tories served as an important
industrial school.
In a wider context, Israel
repeated the experience of all
newly industria 1 i zing nations
that have to turn inexperienc-
ed persons into an industrial
working class.

World Zionist Press Service