Despite being nearly 50% arid and comprised of desert, Israel has deservedly earned the escalation of ‘the start up nation’. For nearly two decades, the country’s economy has turned out high growth numbers, mainly thanks to a national model that embraces innovation.

And despite a sluggish start to 2015, Israel’s economy is on the move again. Growth for 2016 is estimated at above 3%. While there had been concern about the relatively high extent of consumer spending, this has cooled off somewhat. instead,exports have surged ahead by 4.4% in 3Q2015.

What are those stats hiding at a micro level? Interestingly enough, it has been known for some time that the large supermarkets are out of favour with consumers. In fact, one chain by the name of Mega has been shutting several shops and trimmed back many other outlets. In parallel, some of the large food manufacturers and distributors like Unilever, Tnuva and Strauss have seen their sales plummet by up to 6% since January.

The pattern is similar elsewhere. Fox clothes with hundreds of outlets is feeling the pinch. Cellcom, a key supplier of mobile services, has seen profits slump by over 50%. Soltam is a manufacturer of kitchen pots and has 15 outlets, yet its sales have collapsed by 40%, as it did not predict the success of other chains.

Bad? Well certainly not pleasant for the families of any laid off workers. Yet there is a flip side of the coin. At least for now, the additional tax on those who look to buy real estate as an investment has finally dulled (temporarily?) the drive for speculators to acquire new properties. And if you think the innovation – start up economy is tired, consider why 70 start up accelerators have emerged in the past three years alone.

There is much more work to do. Critically, key restrictive practices, such as in the Electricity Company, in the Ports Authority and in the distribution of fruit need to be commercially vapourised. Yet, the shifting balances are visible to all.

Back in 1986, Israeli literally froze 90% of the economy – wages, prices, etc. Since then, 95%+ of the population has benefitted significantly, as old industries lost their raison d’etre and structural changes were introduced. I suspect that Israel is beginning to embrace of yet another turnaround….. without having consciously engineered it. 2016 could well be a year of great promise for the economy of Israel, despite the bumbling of its government.