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Israel's tech sector powers the economy by contributing 20% of GDP
Israel’s high-tech sector now accounts for 20% of the country’s economic growth, the Israel Innovation Authority (IIA) said Tuesday as it urged the government to accelerate more investment in technology development.
In its State of the High-Tech Sector in Israel 2024 report, the state-funded government said that despite an eight-month war against the Palestinian Islamist group Hamas in Gaza, technology continued to improve – albeit it was slower than in 2021 and 2022 – and was such Israeli progress in particular. It accounts for 53% of total exports.
About 600 new jobs were created last year as tech companies raised $8 billion by 2023, down 55% from 2022. In total, Israel has about 9,200 tech jobs, of which 4,00,000 are employees.
IAA chief executive Dror Bin said that while its budget has grown to help pay for programs totaling $250 million to support start-ups that are having trouble raising funds due to the war and global economic conditions, the country must “double” its investment in technology
“Israel doesn’t have a lot of natural resources – we’re not a big oil and gas power,” Bin told Reuters. “We are a country on the edge of the desert, so we don’t have much water. The only biological resource we have is the white blood cells in the brains of the people here, and we have to make sure they continue to thrive and grow.”
Innovation, Science, and Technology Minister Gamliel acknowledged that innovation is Israel’s most important resource and that the government must “continue to support companies and create vital infrastructure.”
Bin also predicts a similar year to last year in 2024 due to investment concerns. However, foreigners are still active investors because they know how to assess the risks of a fund they will invest in Israel and want to invest when the valuation is attractive. He said he would like to see more Israelis invest.
Cybersecurity and fintech remain the hottest areas for investors. Still, climate technology is one of six new startups as entrepreneurs seek to meet the challenges of a planet that is “making temperature, and the health care facilities of an aging population that addresses the proportionality of the provision of food, water, and quality,” he said.
Conclusion: Israel’s tech sector not only contributes to the national economy But is also a powerful force for innovation and a beacon of economic resilience. Contributing 20% to GDP.