Leaders of Israel’s vaunted high-tech industry are concerned that a growing number of Israeli tech workers will potentially move abroad unless confidence in the local industry is restored.
In addition, tech executives warn that the recent $30 million slashing of the Israel Innovation Authority’s budget could potentially undermine the Israeli state’s ability to nourish the local tech sector.
Israel’s high-tech sector has emerged as the main engine of the Jewish state’s economy. While it only employs about 10% of the total workforce, it generates over 50% of the total export. Unless the situation is reversed, a growing number of Israel tech workers could eventually move abroad to locations that are more favorable.
Yodfat Harel Buchris, managing director at Blumberg Capital in Tel Aviv, said fresh data revealed a decline in Israeli tech foreign investment. It also showed that fewer start-ups are currently being formed and that layoffs are on the rise in the local tech sector.
"Foreign investors are losing confidence in our ability to deliver. 80% of investments come from abroad. While there is a global crisis, Israel's decline is disproportionately higher,” warned Buchris.
"It's not just about numbers; there's a negative atmosphere. An entire generation of young companies is being lost. In four months, we've undone what took 20 years to construct from the ground up. The locomotive that drives Israel is derailing, and the Treasury is turning a deaf ear," she lamented.
The decrease in investments reportedly coincides with the introduction of the current Israeli government’s judicial overhaul plans, which is creating uncertainty among investors.
Start-Up Nation Policy Institute CEO Uri Gabai recently issued a warning that the current economic trend threatens the Start-up Nation’s future.
“We welcome the postponement of [judicial] reform, but as long as uncertainty about the future of democratic institutions in Israel persists, the industry will continue to be challenged. It is important to warn: If the trend does not change not soon, it may be the end of the Start-up Nation,” said Gabai.
The All Israel News Staff is a team of journalists in Israel.