Israel is allocating NIS 110 million to raise productivity in national priority areas

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by Ifi Reporter Category:Government Jun 19, 2018

The Ministry of Economy and Industry is launching a new program, allocating NIS 110 million to raise productivity in the industrial sectors in national priority areas and in Jerusalem
Industrial enterprises whose sales turnover is up to NIS 200 million will be able to receive a grant of up to NIS 3 million for the following purposes: investment or upgrading in technological equipment of systems, improvement of operational excellence, empowerment of human capital, promotion of innovation and efficiency in resources and raw materials
Minister of Economy and Industry Eli Cohen: "The Ministry of Economy's plan to raise productivity is intended to improve the competitiveness of Israeli industry, to raise the profitability and wage level of workers and to re-grow the industry, increase production and improve the resilience of the Israeli economy"
In the framework of a number of recent government decisions, the aid was intended to increase the pace of productivity growth and enable the Israeli economy to reduce barriers and improve competition with the countries of the United Nations
The level of productivity depends on a variety of areas, including the human capital of the economy, the physical capital stock, the technological level of the enterprise, the efficient utilization of factors of production, and more. Accordingly, the new program proposes various methods of action that can improve the productivity indices (the value added per job and the value added per hour) by at least 30%, thereby increasing the level of productivity in the corporation or in the plant or production line.
The plan is intended for corporations wishing to streamline and raise their productivity in the corporation as a whole or in a specific corporation or any production line, provided that the main occupation of the establishment is in one of the manufacturing industries and the income of the establishment in Israel does not exceed NIS 200 million The Law for the Encouragement of Capital Investments regarding the Grants Track.
An industrial plant whose plans are approved will receive assistance for the implementation of its plan to increase labor productivity (including the business plan), as well as assistance for the cost of preparing the plan, in addition to the eligible investments.
In the framework of this provision, the applicant for assistance must formulate a "plan for raising labor productivity" that relates, at the very least, to two of the five components listed below. Ingredients 1 and 2 are mandatory components, while components 3-5 are optional components:
Component 1: Investment and / or upgrading of technological equipment and systems related to the supply chain, in order to improve operational metrics such as OEE - Overall Equipment Effectiveness, existing production potential and various operational measures to improve production efficiency in the plant according to its equipment (mandatory component);
Component 2: Improving the expected operating excellence of the OPER (obligatory component);
Component 3: upgrading, upgrading and empowering human capital for the operation of advanced equipment and systems, in order to raise the professional and technological capabilities of the employees (an optional component);
Component 4: Promoting process innovation, product innovation, innovation in business models, innovation in customer experience, innovation through design thinking or integration, provided that they increase the value added (optional component).
Component 5 - Streamlining of Resources and Raw Materials - A series of measures and actions, mainly reduction in the original, aimed at causing the plant to produce more outputs with less resources and raw materials, provided that they increase the added value. For this purpose - "reduction in the original", any action related to the design, manufacture, purchase or use of materials, resources or products leading to reduction in quantity or toxicity of the waste generated in the manufacturing process.
For a plant with a turnover of up to NIS 10 million, the qualifying investment ceiling will not exceed NIS 1 million, with the assistance rate being 30% - up to NIS 300,000.
For a factory whose turnover is NIS 10-75 million, the qualifying investment ceiling will not exceed NIS 5 million, with the aid rate being 30% - up to NIS 1.5 million.
For a factory whose turnover is NIS 75-200 million, the qualifying investments ceiling will not exceed NIS 10 million, with the aid rate being 30% - up to NIS 3 million.
The aid will be provided through capital investments and through support for soft investments.
Nahum Itzkovitz, Director of the Authority for Investment and Development of Industry and Economics: "Improving productivity in Israeli industry is the order of the day. The effort currently being made by the Israel Investment Authority to promote the fertility track is supposed to generate a change in consciousness as well as in practice. The creation of a clear goal for improved productivity is expected and will lead to future resources and efforts that will lead to the advancement of industry in Israel, especially in peripheral areas of priority. Improving productivity is the key to industry and a thriving economy in Israel. "

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