Science & Technology
The Israeli technology sector is a vital part of the country's economy. It consists of 6,000 companies and contributes 18% to the gross domestic product. Additionally, it accounts for about half of the country's exports and 30% of tax revenues.
Israel: The Country of Startups
Israel is known as "the country of startups" because it has more emerging technology companies per capita than any other country in the world. Major American companies like Microsoft, Apple, Google, and NVIDIA invest heavily in research and development in Israel. These companies have already started feeling the effects of the recent aggression against the Gaza Strip.
The Resilience of the Technology Industry
The technology industry in Israel has been instrumental in protecting the country's economy during times of crisis. It helped Israel weather the storm of the Great Recession in 2008-2009 and recover quickly from the COVID-19 pandemic.
The Impact of the Al-Aqsa Flood
However, the ongoing Israeli aggression on the Gaza Strip has severely affected the technology sector. More than 80% of advanced technology companies in Israel reported being impacted by the war.
Workforce
One immediate consequence of the war is the mobilization of over 300,000 reserve soldiers, which has affected the workforce. Forbes reports that around 10% of technology employees were recruited, with some companies experiencing a 30% loss of employees.
Cancellation or Delay of Investments
Israeli startups raised $27 billion in 2021, but the war has posed a challenge to the continuous flow of investments. Over 40% of technology companies had investment agreements delayed or canceled, and only 10% were able to meet with investors.
Exports and Tax Revenues
The technology industry contributes 30% of Israel's tax revenues, making its prosperity crucial to the economy. However, the aggression has caused business disruptions and slowdowns, impacting exports and tax payments. Many companies are at risk of closure, delays in production and delivery, and difficulties in meeting investor requirements.
