Tel Aviv at sunset, Israel Startup Israel
Over 80% of high-tech firms in Israel Startup Nation are having problems right now due to the ongoing “Iron Swords” War to destroy the Hamas terrorist group in Gaza. This is according to a report released by the Israel Innovation Authority (IIA) together with SNPI (Startup Nation Policy Institute). The report surveyed 500 Israeli firms and found that 41% have had investment deals delayed or canceled entirely while only 16% reported no problems at all stemming from the onset of the war.
Of the firms polled, 14% have experienced only investment problems and 43% only manpower problems, while 27% have had problems in both areas. And 70% of the companies surveyed reported that they were forced to delay project and/or research due to the situation.
There are many reasons for this, such as the problems posed to any nation’s economy at a time of war. But the Israeli firms are also hurting due to the reserve military call-ups of so many of their personnel.
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These firms were already having problems due to the dry-up of new investments caused by the global financial crisis coupled with Israel’s domestic political turmoil caused by the government of Prime Minister Benjamin Netanyahu’s controversial judicial reform plan.
According to the report, The “Iron Swords” war has already begun to show its signs in the Israeli economy. “Going forward to the many fluctuations that have characterized the past year, the weakening of the shekel and putting Israel under negative surveillance by the rating agencies may indicate the beginning of an economic crisis whose intensity is still unknown,” it said.
“The critical role of the high-tech industry in the economy becomes more important than ever in these times – both for the containment of the crisis and for the speed of the intensification the day after,” the authors wrote.
SNPI said about five hundred hi-tech companies and start-ups, in various sectors and recruitment stages, responded fully to the survey. It added, however, that it is important to note that the survey is not a random sample of companies: all the high-tech companies were invited to respond, and it is likely that the motivation to respond increases if a company is in a more difficult situation.
At the same time, explained SNPI, the respondents do constitute a representative sample of the high-tech industry in terms of the size of the company and the recruitment stage, so that you can learn from it about trends and the type of hardships that the companies suffer from and how hardships. These vary between companies at different recruitment stages.
Start-Up Nation Policy Institute (SNPI) is a non-profit independent think tank, specializing in innovation policy and the Israeli innovation model.
