Small and medium-sized businesses (SMBs) are among the most important growth engines of the local economy. Haifa sees these businesses as a cornerstone of building the urban economy in its territory and establishing a thriving sustainable economy that fortifies its residents’ communal and social resilience. Therefore, business and commercial planning will be part of any spatial planning.
Background to formulating the vision
Some 99% of all businesses in Israel are small or medium-sized businesses, employing 60% of workers in the economy, responsible for 75% of the additional jobs each year and generating 54% of the business product. These figures are similar to Haifa’s: Over 99% of businesses are defined as small or medium-sized, and over 93% of these are actually defined as microbusinesses – up to five employees or self-employed people.
Although most of the business product in the high-manpower economic sectors is produced by small and medium-sized businesses, their power and ability to influence policy, regulation and politics in the country, as well as coping with bureaucratic-administrative requirements, are far less than those of the large businesses. For these reasons as well as the knowledge and financing barriers, the productivity of small and medium-sized businesses is lower than that of the large ones.
Therefore, Haifa municipality will place small businesses at the forefront of activity in the urban economy in general and commerce in particular, and will do so in recognition of the economic and social potential inherent in their activities and the cultural role they play in shaping the city’s identity.
Haifa Situation Report (2019 summary)
Heat map of the concentration of active businesses in Haifa 2020 (data source – Haifa municipality’s Center for Economic and Social Research)
- About 22,000 businesses operate in Haifa, about 8,350 of which require licensing (about 85% of them already have a legal business license).
- The duration of treatment by licensing agencies far exceeds the recommended, standing at an average of 91 days of treatment when it comes to out-of-town elements and 32 days for urban elements (in 2019).
- Some 948 businesses closed in the city in 2019, compared with 1,064 businesses require licensing that opened that year (the ratio between opening and closing a business in Haifa – and Israel in general – was 1.12 in favor of opening in 2019).
- Low survivability has been observed in these industries: hospitality and food services, wholesale and retail trading, repairs.
- Only 10% of licensing-seeking businesses currently apply for information early.
- During 2019, about 1,211 businesses received tickets from the Municipal Supervision Department.
- During 2019, 124 indictments were filed against small businesses in the city.
Goals and Objectives
Objective for 2025: To improve the city’s standing in the Ministry of Economy’s index of business-friendly cities.
Objective for 2030: To become a top 5 city in the index of business-friendly cities.
From understanding the enormous importance of small and medium-sized businesses to the urban economy and recognizing the existing structural barriers, the main goal set by the Haifa municipality in the field of urban economics is to strengthen and nurture the small businesses operating in its jurisdiction.
Already, the municipality is working on easing the bureaucracy in its corridors and moving to a “one-stop shop” service concept through a series of measures – organizational, regulatory and technological – aimed at encouraging business activity throughout the city in general, and in the heart of the city in particular. In this context, the municipality is investing in improving and accessing the licensing process for business owners and developing a new urban system for promoting businesses. This system will include new mechanisms for ongoing dialogue and decentralized management that will enhance cooperation and communication between the municipality and businesses in the city.
- Organizational Infrastructure:
- Turning the Business Licensing Department into a business licensing and promotion division – an organizational change incorporating additional employees and resources, as well as a change in content and practices;
- Implementing the “one-stop shop” concept in all municipal services provided to businesses (not only in the field of licensing);
- Establishing an urban system to promote business – business administrations in special commercial areas and markets.
- Regulatory Infrastructure:
- Changing the municipal tax decree – a relatively real reduction of municipal taxes for businesses on commercial streets in general, and in the heart of the city in particular;
- Adapting municipal tenders for small and medium-sized businesses and encouraging local procurement;
- Creating incentives for returning business activity to the city’s streets.
- Technological Infrastructure:
- Improving the existing knowledge base about business and commercial activity in the city – supply and demand.
Objective for 2025: An improvement in the intensity of commerce in the heart of
the city (a positive balance in opening businesses in the area).
Objective for 2030: An improvement in the intensity of commerce in all commercial areas in the city, and an improvement in residents’ access to commercial services in the city (a positive balance of opening businesses in the city above the multi-year average of the past five years, and an increase in the share of residents within a 15-minute walk from a variety of trading services).
The municipality will promote the redesign of mixed-use quarters, complexes and streets – residential, business, leisure and recreation – and upgrade the public space in strategic areas. Such new planning means uncompromisingly striving for a sustainable living and work environment that can provide and meet every need, while at the same time reducing as much as possible the existing waste of energy and resources.
- Hadar – Promoting a multidisciplinary strategic plan and specific projects in the field of commerce and employment, derived for the purpose of developing Hadar as a central focus within Haifa’s main business center that dominates the entire “heart of the city” and is divided into various areas, some of them high in residential use and some high in commerce and employment (in cooperation with Orna Angel, Urban Renewal and Sustainability Consultant).
- Lower City and Port Area (Innovation District) – Continued development of the area as an anchor of employment and commerce in the city. Analysis of programs, consulting in the field of business-commercial development and identifying opportunities to promote change generators in the short-to-medium term.
- Central Business District (East) – Promoting an urban renewal plan that will guide the area’s development. Accompanying the program’s preparation; providing recommendations regarding employment, commerce and housing; and identifying opportunities for developing change generators in the short-to-medium term.
- Wadi Nisnas – Accompanying the program’s preparation, providing recommendations regarding business and commercial activity, and identifying opportunities for developing change generators in the short-to-medium term.
- Adding a mix of uses to main arteries in renewable neighborhoods – Renewal of coastal neighborhoods (Neve David, Sha’ar HaAliyah, Ein Hayam), Kiryat Eliezer and Kiryat Eliyahu, Kiryat Haim, Kiryat Sprinzak, Neve Sha’anan.
- Regulating a mix of uses of urban streets to solve the legality of businesses in planning and construction terms.
- Improving the appearance of street commerce – Accompanying the approval process of the Commercial Front Renewal Guide and preparing a plan for adaptation, implementation and enforcement among businesses.
- Physical development to support commercial and business activity – Treatment of abandoned or neglected areas and buildings, and upgrading the public space (lighting, security, infrastructure, places to stay, placemaking) as actions that support business activity.
1. The food trucks project
2. The Cash-Back project to encourage consumption in small businesses (participation in The 2021 Global Mayors Challenge).