Small and medium businesses on the rise despite red tape

This year's report examined gender breakdowns in the sector for the first time, and found that self-employed women comprise only around one fifth (21.8%) of all the self-employed in Israel.

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February 1, 2016 21:56
1 minute read.
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Business colleagues [Illustrative]. (photo credit: INGIMAGE)

The number of small and medium enterprises (SMEs) in Israel increased in 2015, despite onerous red tape and bureaucratic hoops, according to a report the Economy Ministry’s Small and Medium Businesses Agency released on Monday.

According to the report, 2015 saw a rise in Israeli SMEs and employees, as well as an increase in their GDP and productivity relative to large businesses.

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Red tape, however, created “a bureaucratic and regulatory overload.”

Among the regulatory problems noted was a lack of cooperation among regulatory agencies, which prevented good online services for SMEs.

This year’s report examined gender breakdowns for the first time, and found that self-employed women comprise only around one fifth (21.8%) of all the self-employed in Israel, though the rate was slowly rising.

The report also found a gender income gap among the self-employed.

“Despite the fact that there was a rise in income among self-employed women between 2010-2012, they continued to earn only around 60% of the income earned by the men,” the report said.

Thirty-one percent of SMEs have female owners or co-owners, but just 22% had women as managers.

Over 99% of the businesses in Israel are small and medium-sized –defined as those with 100 or fewer employees – and account for 60% of employment and half of economic output, according to agency director Ran Kiviti.

Such businesses, however, have greater trouble navigating and shaping regulation than their larger counterparts.

“The strength and ability of small and medium-sized businesses to influence state policies, regulation, and politics, is small relative to that of the large businesses, and their ability to grapple with bureaucratic-administrative demands is smaller,” he said.

Economy Ministry Director-General Amit Lang said that greater efforts needed to be made to boost SMEs.


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