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Source: https://www.jpost.com/business-and-innovation/opinion/article-839503
Experts Underestimated Israel's Wartime Economic Resilience
(Jerusalem Post) Ran Kivetz and Jonathan M. Barnett - Throughout 2024, analysts sounded a steady drumbeat of gloom and doom about Israel's economy. In September, Moody's downgraded Israel's credit rating by two notches. The pessimists were wrong. The Israeli stock market went up more than 30% in 2024, outperforming the major stock indices. In 2024, Israel also enjoyed the third-highest level of venture capital investment on a per capita basis, trailing only Singapore and the U.S. Many analysts had focused on dramatic headlines that portrayed Israel as alone and trapped within a "ring of fire" of hostile neighbors, while ignoring its military prowess, technological capacities, and population's resolve (as Hamas, Hizbullah, and Iran have since learned). They overlooked evidence of Israel's underlying economic, geopolitical, and demographic advantages. The U.S., Israel, South Korea, and Taiwan form an elite group of innovation leaders that consistently outperform other developed economies in the percentage of GDP invested in R&D ("innovation input") and U.S. patents issued per capita ("innovation output"). Industry observers have long recognized the unconventional perseverance, creativity, and can-do attitude of Israelis - qualities rooted in Jewish history. Ran Kivetz is a professor at Columbia University Business School. Jonathan M. Barnett is a professor at the University of Southern California School of Law.