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JIIS Bulletin - May 2012
Getting down to business
In total, 34,700 businesses operated in Jerusalem in 2010, representing 7% of all businesses around the country, and a little under half the number of those found in Tel Aviv (64,700). It should be noted, though, that one third of those enterprises are small businesses, employing no more than four workers. 

But that is not the whole story: in 2010, 3,200 businesses opened in the capital while 2,700 closed their doors permanently. In other words, some 500 additional businesses were operating in Jerusalem. To put this in the context of "survival," it emerges that only half (52%) of the shops and services that opened for business in 2005 were still there in 2010. This figure, incidentally, is rather constant for the whole country for that 5-year period. 

“Business activity in the urban space is one of the indicators of economic strength,” says JIIS researcher Eitan Bluer. ”It is influenced by supply and demand economics, population size, and social and economic processes. Businesses that have salaried employees have considerable weight in the local economic system – they are in fact the economic engine for creating employment and encouraging innovation.” 

It is interesting to note that in Jerusalem the businesses with the highest survival rate (67%) were in the fields of education and health, and banking and finance. By comparison, in Tel Aviv the highest survival rate were those focusing on education and health (69%) and in Haifa, banking and finance (60%). 

In the high-tech sector, 1,000 businesses were operating in Jerusalem in 2010, or 3% of total businesses, compared to 2,960 (5%) in Tel Aviv and 73f0 (4%) in Haifa. The survival rate in this sector was highest in Jerusalem – at 59% - well above the national average of 54%. 

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