Official data suggests that Israel's exports of hi-tech goods declined by 3% in the third quarter of 2005 to US$3.86bn, but external sales of pharmaceuticals soared 19% in the three-month period.
In response to the new figures, local manufacturers have called on the government to make hi-tech industrial exports a priority for 2006. According to the demands, key goals for Israel's industrial policy should include deepening the penetration of international markets, an area in which leading local drug firms have achieved notable success in recent years.
The recent performance of pharmaceutical exports is a tribute to Israeli drug firms, and has come at a time when some research-based international companies are wary of investing in high-value product development in Israel due to concerns over the country's intellectual property regime. Nevertheless, some observers doubt that high-volume sales of generic drugs usefully compare with less internationally competitive hi-tech product areas such as telecommunications equipment and avionics.