The commerce and service sectors constitute a major share of the Israeli economy: 60% of all employees and 65% of the gross value added to the domestic business product. These sectors, like the rest of the economy, consist mostly of small and mid-size businesses, however they are mainly oriented towards the local market and are less exposed to international trade. The large share these sectors have in the domestic business product illustrates their immense impact on economic productivity and on the cost of living. These sectors currently exhibit low productivity when compared internationally, with a gap of 44% in terms of GDP per hour worked, compared to the benchmark countries. The low levels of labor productivity in these sectors, as in other sectors of the Israeli economy, have a significant adverse effect on GDP per capita and the cost of living, and are caused by factors which will be discussed in detail below. Indeed, on a long-term perspective at a time when the Israeli economy has high employment, the GDP per hour worked is the main growth barrier facing the Israeli economy, and the reason Israel has remained at a low standard of living compared to leading countries.
Committee Members
Committee Coordination and Report Writing
Committee Coordinators | Ayelet Kol and Miri Shmueli*
Committee Coordinators on behalf of Aaron Institute | Dr. Sarit Menahem-Carmi and Dr. Avihay Lifshitz
Report Writing | Ayelet Kol, Dr. Sarit Menahem-Carmi, Miri Shmueli, Gilad Be'ery, Roi Herzog, Shira Tzahci, and Dr. Avihay Lifshitz
Our thanks to all other associates who took part in the committee's meetings and work:
Ms. Einav Aharoni-Yonas, Dr. Yair Eilat, Ms. Rinat Bachar, Dr. Nir Ben-Aharon, Mr. Gilad Brand, Mr. Nir Baranga, Mr. Igal Gurevich, Attorney Lilach Dachoach, Mr. Moran Dayan, Ms. Noam Dan, Dr. Lev Drucker, Ms. Naomi Himeyn Raisch, Ms. Levana Zagury, Ms. Yaffa Hovav, Attorney Sady Yashar, Ms. Hanna Leiderschneider, Ms. Avigail Levy, Mr. Hagay Levin, Attorney Yaara Lemberger, Dr. Yuval Mazar, Ms. Ronit Nissenboim, Mr. Ido Sofer, Ms. Ifat Citroen, Mr. Mark Feldman, Mr. Avi Fleishon, Mr. Ofer Rimon, Dr. Dalia Shilian, Ms. Hagit Shani, Ms. Rony Schnitzer, Attorney Sarit Spiegelstein, Mr. Kyrill Shraberman.
* Miri Shmueli served as Policy and Strategy Senior Division Manager at the Ministry of Economy and Industry