The economy is waiting for the storm to pass. That is the mistake
The Israeli economy must abandon the habit of waiting for stability after every crisis. Uncertainty has become the new norm, requiring a shift in management strategies and state policy.
There is one habit that the Israeli economy must break: waiting for the situation to stabilize. Almost after every crisis, we hear the same sentences: when the war ends, when the interest rate drops, when consumption returns, when workers return from reserve duty, when the world calms down. And then, so we tell ourselves, it will be possible to return to planning, investing, and growing.
However, in recent years it has become clear that the waiting itself has become a routine. Uncertainty is no longer an exceptional event that must be overcome, but the new operating environment of the Israeli economy. Wars and security crises, the cost of living, labor shortages, changes in exchange rates, disruptions in supply chains, and sharp changes in consumption habits do not appear one after another in an orderly fashion. They exist in parallel and sometimes change within weeks. Despite this, a large part of the economy is still trying to manage itself with tools built for a more stable world.
The Israeli consumer has already been forced to adapt. He is more cautious, checks prices, compares, and decides quickly what he is willing to give up. But at the same time, he also refuses to stop living. People want to dress up, go out, buy a gift, renew themselves, and give themselves moments of normalcy. The consumer can reduce spending in one area and spend more in another, postpone a large purchase but continue to consume products that give him a sense of quality or pleasure. From the retailer's point of view, this means that the old models of "recession" versus "growth" are no longer sufficient. Behavior is much more complex.
The problem is that business and public systems have not always changed at the same pace. They still build annual work plans as if there is one central scenario, postpone investments until "the picture becomes clear," and look for temporary solutions for labor shortages or damage to operations, as if it were a one-time event. However, a business that waits for certainty before making a decision may find that a competitor who has already learned to operate without it has moved ahead of it.
Therefore, the required change is not another emergency plan, but a new management concept. Businesses need to move from planning based on one forecast to managing several scenarios in parallel. It is necessary to build more flexible inventory systems, shorten response times, diversify risks, invest in technology, and above all, give more authority to managers and employees in the field. In the future, a competitive advantage will not only be a better price or a better product, but also the ability to react faster to a changing reality.
But one cannot demand flexibility only from the business sector. Precisely when it is impossible to create certainty in reality, the state must create certainty in the rules. Consistent regulation, fast licensing processes, investment in professional training, and permanent emergency assistance mechanisms are not "benefits for business," but economic infrastructure. Businesses know how to deal with risk; it is much harder to deal with rules that change during the game.
Israel needs to stop trying to return to the economy that existed before the next crisis and start building an economy that knows how to function within it. The resilience of the economy will not be measured by the speed at which we return to routine after every shock, but by the ability to continue to invest, employ, and grow even when the shock is still ongoing. The Israeli economy should not wait for the storm to pass. It needs to learn to grow even when it is here.
Rami Shavit is the controlling shareholder and CEO of Mashbir.
