Israel gets low ranking in business index

Dun & Bradstreet measures number of businesses in relation to population.

The Israeli entrepreneurial spirit is well-known around the world, but a global report by business research firm Dun & Bradstreet shows that the rate of active businesses measured in proportion to the country's population is relatively low compared to the majority of countries in Central Europe and North America. The D&B study measuring the number of businesses in relation to the size of the population placed Israel at number 25, with one business for every 24 inhabitants, just before Argentina and after Germany, Hungary and Italy. Israel has a global reputation for its hi-tech sector, which is often referred to as Silicon Valley II. More than 100 Israeli businesses trade on the New York Stock Exchange, Nasdaq and AMEX. "Despite the Israeli entrepreneurial spirit, there are many difficulties and obstacles for young entrepreneurs to open businesses because of high, basic capital needs and high taxes levied on companies and businesses," said Reuven Kovent, CEO of Dun & Bradstreet Israel. "In addition to these difficulties, there is a lack of government support and incentives needed to encourage small- and medium-sized businesses." Kovent called upon the government to support and encourage entrepreneurial ideas and projects through the allocation of budgets, lowering taxes for companies and businesses and cutting red tape. Every year an average of 43,800 new businesses open their doors in Israel while 28,600 are faced with closure. Norway was ranked No. 1 in terms of the number of businesses relative to the size of the population, with an average of one business for every four inhabitants. The Czech Republic was No. 2, with a similar ratio. New Zealand and Sweden were third and fourth, with one business for every five inhabitants. Hong Kong was No. 5, while China was last on the list at No. 35, with one business for every 524 inhabitants. The B&D report was based on information from 120 million businesses around the world. It found that in countries with a high number of businesses the risk level is low. A majority of the first 10 countries in the ranking had a low level of risk; businesses in these countries realize their commitments, make on-time payments to suppliers and build a secure business environment, B&D said. A report by the Manufacturers Association of Israel published Tuesday showed that small- and medium-sized factories employing 20 to 100 people expect a further slowdown in their rate of productivity in the third quarter compared to the second quarter, mainly as a result of the sharp drop of the US dollar against the shekel and a downturn in global and domestic demand. The small- and medium-sized factories index compiled by the association fell to 91.73 in the second quarter from 95.68 in the first quarter and 107.97 from the last quarter of 2007. According to Oren Rambam, head of the association's small- and mediumsized factories committee, as the index moves below 100, it is a sign that industry is experiencing a slowdown in overall activity, including productivity, exports, investments and employment.