New program to boost growth of traditional industry

October 10, 2007 08:24

The recommendations included increasing the current tax benefit of 13.3% for factory workers to 20% for the next 10 years.

1 minute read.

israel makov 88 224

israel makov 88 224. (photo credit: Ariel Jerozolimski)

A new long-term program, recommended by the Industry, Trade and Labor Ministry's business committee to promote the traditional industry and R&D growth in the periphery, is expected to add NIS 42 billion to gross domestic product over the next 17 years and more than double output per worker from $40,000 to $85,000. "The implementation of the program will advance innovation and is aimed at increasing R&D companies within the traditional industries to be based in the periphery in an effort to boost growth and competitiveness," said Israel Makov, former CEO of Teva Pharmaceutical Industries Ltd. and head of the business committee, which was introduced by Industry, Trade and Labor Minister Eli Yishai in May to formulate a program to revitalize the periphery. The business committee, which includes industry leaders, academics and government officials, on Monday presented Yishai with the recommendations of the program, which would require an investment of NIS 1.8b. for implementation over a four-year period. Yishai authorized the ministry's director general, Gabriel Maimon, to prepare an operative action plan for implementation of the recommendations. The program advises raising the awareness and resources necessary for boosting innovation such as the implementation of proactive strategic corporate and expert advice for the compatibility of existing technologies and investment into human capital and skilled workers, in particular among small- and medium-sized companies. In addition, the committee recommended the allocation of sources to revive the competitiveness of traditional industry through investment into R&D to create innovation and through more cooperation between academic research and companies operating in traditional industry. In order to empower the peripheral areas, which have been suffered amid the boom of hi-tech in the country's center, the committee recommended three essential basic conditions including the implementation of a fast and accessible transport system, community development and an education system offering equal opportunities. Furthermore, the committee called upon the government to introduce incentives and attractive conditions for raising living standards in the periphery to be competitive with those in the center of the country. The recommendations included increasing the current tax benefit of 13.3 percent for factory workers to 20% for the next 10 years for a limit of up to NIS 25,000 instead of the current NIS 10,000.

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