The 10 plagues of Israel's high-tech ecosystem

• Published date: 20 April 2024
• Author: JERUSALEM POST STAFF
• Publication title: Jerusalem Post, The: Web Edition Articles (Israel)

The Jerusalem Post asked high-tech industry experts and stakeholders to share their insights on 10 of these modern "plagues," uncovering the underlying issues and exploring potential solutions

The Plague of Cost-Driven R&D Decisions

A growing trend among companies is the tendency to set up their operations and expand their workforce in destinations known for their cost-efficiency, such as Bulgaria or India. This shift is largely driven by the attraction of accessing a workforce that is less costly compared to more established tech hubs, like Israel. Nonetheless, in Israel, the equation remains steadfast: high cost comes with very high value.

"Here in Israel, we see a distinctive blend of a strong no-matter-what development ethos, unparalleled innovation spirit, impeccable execution, and swift delivery, placing Israeli high-tech as leaders on the global map," shares Eliel Schurman, head of Engineering at the SAP Development Center in Israel. "It is imperative that companies do not overlook the invaluable Israeli workforce and its unique contribution, integral in propelling both their enterprises and products to new heights. Embracing the unique qualities of the Israeli workforce is essential for sustaining the innovative edge and success synonymous with Israeli hi-tech culture."

The Entrepreneurial Stagnation Plague

From 2007 to 2015, Israel experienced a surge in startup creation, but since then, there's been a dramatic decline of over 50% in new ventures annually. This trend signals a reluctance among entrepreneurs to launch startups, despite ample opportunities in fields like cyber and AI. This stagnation threatens the tech sector's vitality and local economy. While support programs are crucial, fostering a culture of entrepreneurship is equally important.

Ziv Elul, co-founder and CEO of Pery, a digital health company: "Areas like mental health have seen increased demand, highlighting opportunities for innovative solutions like AI-based ADHD interventions. However, startup incubators are dwindling, and collaborations with foreign entities are stalling. Rejuvenating Israel's innovation prowess demands concerted efforts to reignite entrepreneurial spirit and drive collaborative initiatives forward. Together, we can uphold our position as a global innovation leader."

The Valuation-Bubble Plague

In recent years, there has been a proliferation of Israeli high-tech companies focusing predominantly on valuations and fundraising rather than the core essence of...