Israel’s future, security and prosperity depend on economic independence. Israel’s industry, especially the export industry, must be the central and decisive driving force toward economic independence. Industry can show some impressive achievements, but more significant growth is needed to reach economic independence.
The Samuel Neaman Institute for Advanced Studies in Science and Technology began a comprehensive research project to examine policy alternatives for the advancement of various sectors of the industry in Israel from the technological, scientific, educational, organizational and other points of view, as well as aspects of infrastructure problems, with emphasis on medium and long range. The present research deals with the polymer and plastics industries.
The polymer and plastics industries embrace many fields of activity in the economy and their policy has technological, scientific, educational, economic, marketing and environmental components. Many external and internal constraints are affecting Israel’s polymer and plastics industry, such as: changes in polymer sciences, developments in production and processing technologies of plastic materials, changes in training scientific and technological manpower, dependence on processes and equipment developers and producers abroad, shortage of basic and cheap raw materials, the existing infrastructure of research and development and polymer and plastics sciences education, obsolescence together with renewal of uses and products, etc.
Characterization and analysis of the competitive forces included in the industrial branch (according to Porter) is the key to the development of the branch and the process of preparing a strategic plan for it. In the development of every sector several stages can be observed: the penetration stage, the growth stage, the saturation and maturity stage, and the decline stage. Sales figures of the plastics industry indicate signs of saturation and even decline in some market segments. Other market segments are in the growth and expansion stages. For growth renewal, therefore, there is need for innovation and penetration into new markets.
An initial analysis done during the preliminary stage of the research, indicated that Israel’s plastics industry is characterized by fragmentation – generally, there is not one company with a meaningful share of the market and the ability to significantly influence the market. Statistics indicate that the plastics industry is characterized by a large number of small and medium sized companies and a relatively small number of big companies. The reasons for this can be attributed to relatively low penetration barriers in the various market sectors, a significant part of the industry serves the consumer market in which transportation costs are high relative to the product’s price and market needs are varied, part of the industry lacks critical size in negotiations with buyers and suppliers, and finally, there are relatively high barriers to leaving the market.
A significant strategic opportunity is inherent in overcoming the fragmentation in the plastics industry. There is, therefore, a need to: expand activity in those market segments where there is an advantage to size, or an advantage in ongoing experience; to unify the multi -varied needs of the market; to cooperate in negotiations with buyers and suppliers in order to obtain a critical mass, and last, identify as early as possible branch trends and accordingly draw up a branch policy which will bring about unification and cooperation.
Deciding on policy in the plastics industry and the decisions connected to its implementation are aimed at directing and advancing this branch of the industry, while having to consider the reciprocal relations between the plastics industries and other industrial systems with aims of their own.
In order to achieve an effective policy there is need for ongoing dialogue and joint planning between the policy makers in government and industry. Also needed, in addition to policy analysts, is the contribution of experts in the various areas dealt with by the policy.
In the framework of the present research on the polymer and plastics industry in Israel the relevant information will be presented and analyzed, with the intention of maintaining and encouraging the dialogue between policy makers in government and industry, towards crystallizing a comprehensive policy for the plastics and polymer industry in Israel.
