Tel Aviv Startups (Shutterstock)
In 2023, the Israeli high-tech industry contributed 20%, or NIS 340 billion, to the GDP.
By Vered Weiss, World Israel News
The startup sector has often been compared to the locomotive of Israel’s economy, but after a slowdown caused by judicial reform protests in 2023 and the war against Hamas in 2024, Israeli tech is seeking government stimulus for support.
The release of the Israel Innovation Authority’s annual report shows that while Israel’s tech sector is still relatively stable, it is expected to grow more slowly than in the past few years and may require government stimulus to compensate for a decline in foreign investment and an increase in competition.
Dror Bin, CEO of the state-run IIA, told The Times of Israel, “Despite all the local and global challenges over the past year, the slogan that Israeli tech delivers manifested itself in reality as the sector is resilient and continued to grow in 2023 albeit at a slower pace.”
He added, “However, going forward, the tech sector’s high dependency on foreign investments and increasing competition, backed by massive government investments in other global innovation hubs, require the Israeli government to double down on its investments in Israeli tech.”
In the 2024 budget, the Israeli government gave the IIA an additional 1 billion shekel ($273 million) to assist struggling startups.
The IIA hopes that the Israeli government will continue its stimulus policy for startups as it drafts the budget for 2025.
Dror Bin said, “We believe that this increased investment should continue and be included in the coming years to make sure that all the necessary investments are here to sustain the leadership of the Israeli tech hub.”
In 2023, Israeli startups saw a 55% decline in fundraising, partly due to judicial reform protests and in the latter months of 2023, because of the war.
In 2023, the Israeli high-tech industry contributed 20%, or NIS 340 billion, to the GDP, versus 6.2% in 1995, and made up 53% of total exports, amounting to $73.5 billion.
In 2023, the number of employees in the high-tech sector increased by 2.6% to 396,000, accounting for almost 12% of the country’s workforce.
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