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Economy, Manufacturing

medical electronics, defense industry, Haifa, government investment, computer hardware

Despite limited natural resources, Israelís manufacturing sector is the most diversified and most technologically advanced of any country in the Middle East. The needs of the defense industry, together with a desire to boost export earnings, have encouraged government investment in industry, especially in research and development. A skilled and educated workforce, continually renewed by immigration, also aids manufacturing. Israelís industrial output is among the fastest growing in the world. In 1996 the industrial sector, including mining and construction, accounted for 27 percent of GDP and 80 percent of export earnings, and employed 28 percent of the workforce.

Until the 1970s manufacturing was concentrated on traditional branches such as food processing, textiles, chemicals, pharmaceuticals, and metal products. Since then Israel has moved into high-technology fields such as medical electronics, telecommunications, computer hardware and software, and diamond polishing. Cut diamonds and electronic equipment are now among Israelís biggest export earners, together with chemical products, textiles, transport equipment, and machinery. The Tel Aviv-Yafo metropolitan area and Haifa serve as the primary manufacturing centers.

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