The global economy is hitting a wall of constraint. As the Gulf war grinds on and energy buffers thin, the era of “growth at any cost” is being replaced by a harsher reality.
While Europe sags under demographic weight and Asia’s industrial engine shudders against fragile supply lines, a new hierarchy is emerging.
In this landscape, advantage will not belong to the largest economies, but to the most disciplined. Israel is the case in point: a nation that turned a lack of resources into a high-growth system defined not by what it has, but by how it survives.
Much of the global West has drifted in the opposite direction. An era of cheap money encouraged firms to prioritize scale over efficiency and expansion over sustainability.
Large segments of the technology and services sectors continue to operate at a loss, sustained by the expectation of future capital or government support rather than present performance. The underlying assumption is that size will eventually justify itself, whether through market dominance or strategic indispensability.
This logic persists in different forms in Western economies. It was evident in the “too big to fail” banks that preceded the global 2008 financial crisis and continues in sectors such as aerospace, where firms like Boeing and Lockheed Martin rely heavily on expanding government contracts to cushion bad decisions.
Even companies at the frontier of AI operate without clear profit horizons, sustained by continued inflows of cheap cash.
The need for a different model
This model works in a world of abundance. When capital is cheap and energy is plentiful, inefficiency can be absorbed and deferred. For much of the past few decades, that has been enough.
But this world is beginning to shift. As constraints tighten, tolerance for inefficiency is disappearing. Emerging economies now face a harsher reality: the Western growth model they have spent decades trying to copy is no longer viable in an environment where supply chain disruptions have become a quarterly routine.
Israel’s experience, however, points in another direction. Scarcity and uncertainty have pushed entrepreneurs toward a distinct operating model: rapid iteration and lean execution. Capital is directed toward initiatives that perform under pressure, not those that depend on favorable conditions.
The direction of travel is clear. Israel should look first to the least efficient economies with the highest growth potential, particularly across Asia and Africa, for two reasons.
In this regard, demographic considerations provide for the first reason. The developed world is shrinking in historical terms, while emerging economies continue to expand both in population and in the labor force.
Growth will increasingly come not from mature service sectors, already facing pressure from automation and AI, but from economies still industrializing at scale.
The second reason is more basic. Israel lacks what economists simply call “stuff.” Critical minerals, agricultural inputs, and industrial capacity are concentrated elsewhere.
Lessons from other countries
Case in point, African economies supply raw materials that feed both people and machines. Asian economies transform them into finished goods, from textiles to advanced electronics. A growing Israeli economy will depend more heavily on both ends of that chain.
India offers a clear case. Manufacturing remains underweight relative to its potential, contributing roughly 17% of GDP. Yet, the sector is expanding steadily, with industrial output growing by an annual rate of 5% in early 2026, driven largely by manufacturing activity.
This is an economy with scale, ambition, and inefficiencies that leave room for optimization. Israeli firms specializing in logistics, automation, and resource management could embed themselves directly into production processes, raising output while securing long-term partnerships.
In Africa, the Democratic Republic of Congo (DRC) sits at the resource end of the value chain. The country holds some of the world’s largest reserves of critical minerals, including cobalt and copper, both essential for EV’s and aerospace technologies.
However, its industrial base remains underdeveloped. Much of this value is extracted inefficiently and exported in raw form, often to China for refining, with limited domestic benefit.
The DRC is one of many African economies rich in raw materials, from coffee to lithium and gold, yet unable to turn that wealth into higher-value goods, held back by uncertainty, limited know-how, and weak systems.
If Israel wants to catch the wave, timing matters. So far, much of the world has felt little immediate impact. Oil and LNG shipments move slowly, often at little more than bicycle speed, and many of the cargoes now arriving were contracted months ago.
The result is a delay. Strategic reserves in countries such as China and Japan have further softened the initial impact. But as these buffers begin to thin, likely by mid-April, with the full force felt into May, production economies will be forced to extract more output from each unit of energy.
This is where Israel can step up. Its model of doing more with less, shaped by constraint and refined under wartime pressure, can be adapted and exported.
Entering these markets early, even at low initial returns, would position Israeli firms and institutions as trusted partners in the next phase of industrial growth.
There is also a geopolitical dividend. The US remains locked in economic competition with China over manufacturing capacity and control of critical mineral supply chains.
An Israeli presence embedded within emerging economies can offer a complementary pathway, strengthening American-aligned economic networks while providing those same countries with tangible gains in productivity.
Efficiency, in this sense, is a tradable asset. Israel has spent decades perfecting it. The next step is to sell it.
The writer is a geopolitical analyst and former director of operations at Hashiloach, a policy journal.