Image: Reuters
Hamas’ terrorist attacks in Israel are also having an impact on the country’s traditionally strong technology industry. Experts fear that the attacks could stifle the industry’s already sluggish recovery.
“Foreign investment will decline in the next few weeks and months,” predicts Jon Medved, managing director of venture capitalist OurCrowd. Avi Hasson, head of the non-profit organization Start-Up Nation Central, which brings together emerging companies and potential investors, also expressed skepticism. “As long as we are in the midst of war, it is hard to imagine any big deals getting done,” Hasson said.
- To the live blog: The situation in the Middle East
Fierce fighting has been raging in Israel for a week. In response to the attacks, Israel is flying reprisal attacks on the Gaza Strip and calling 300,000 reservists into arms, including employees in the tech industry.
In the short term, this is a major burden, says Jack Ablin, founding partner of the financial advisor Cresset. In addition, the protection of many company locations must be drastically increased because many tech companies have connections to the military.
Pillar of the Israeli economy
Israel’s high-tech sector is the fastest-growing part of the country’s economy. Companies are among the world leaders in cybersecurity and artificial intelligence (AI). They account for around 14 percent of all jobs, around a fifth of economic output, a quarter of income tax revenue and more than half of Israel’s exports.
However, the industry had already suffered setbacks before the fighting broke out. The bankruptcy of Silicon Valley Bank (SVB) resulted in the loss of an important lender. In addition, the controversial judicial reform of the government of Prime Minister Benjamin Netanyahu and the associated mass protests unsettled investors.
According to a study by the research houses IVC and LeumiTech, Israeli technology companies received around 70 percent less capital in the first half of 2023 than in the same period last year. In the third quarter, however, the decline was only 14 percent, meaning the downturn lost momentum. According to the study, the industry has collected around five billion dollars (4.7 billion euros) since the beginning of the year.
In the medium and long term, Start-Up Nation Central boss Hasson is confident about Israel’s tech industry. “It has the ability to function during conflict and recover from it. I don’t think investors will lose confidence in Israel anytime soon.”
My themes
For your saved topics were
new articles found.
info By clicking on the icon you can add the keyword to your topics.
info
By clicking on the icon you open your “my topics” page. They have of 15 keywords saved and would have to remove keywords.
info By clicking on the icon you can remove the keyword from your topics.
Add the topic to your topics.
Source: Nachrichten
