Although there has been a recent decline in hiring within the tech sector, Israel’s renowned hi-tech industry, the “Startup Nation,” remains optimistic about its long-term prospects despite the global economic slowdown and domestic political unrest.
The global economic slowdown and domestic political turmoil have not impaired the long-term prospects of Israel’s vaunted hi-tech industry, officials, and insiders say, despite a recent decline in hiring in the sector.
According to official figures, nearly 18 percent of Israel’s gross domestic product comes from the tech sector, which employs 12 percent of the workforce, generates almost a third of its income tax, and constitutes half of the exports.
Worldwide inflation and climbing interest rates had caused a drop-off in Israeli tech jobs in 2022, with the number of hiring in the sector dipping 0.2 percent in the first quarter of 2023—its first fall since 2008, said a newly issued report.
The “stagnation” in tech hiring, however, had yet to impact Israel’s GDP or exports negatively, said Dror Bin, director of the Israel Innovation Authority (IIA) which compiled the report together with the Start-Up Nation Policy Institute (SNPI).
As of last month, nearly a third of Israeli technology companies said they were “reducing recruitments”, with one in four saying they had completely halted new hiring, according to the report.
Concerns over the global market’s negative impact on Israel’s economy were exacerbated by controversial legal reforms the Israeli government introduced in January, triggering mass protests, some spearheaded by leaders from the tech sector who said it endangered the country’s democracy.
Prime Minister Benjamin Netanyahu’s government has halted its bid to push through the legislation it says is needed to rebalance power between the government and the judiciary, as talks continue between his right-wing coalition and the opposition.
Even well-established tech giants were feeling the heat, albeit differently.
Gil Messing, head of product incubation at Israeli cybersecurity firm Check Point Software, said his company was still recruiting rather than shedding staff.
Despite the slowdown, the IIA’s Bin was confident the Israeli tech sector, which has moved over the decades towards disruptive technologies to face challenges in fields such as agriculture, food, and the environment, would not be negatively impacted in the “mid- and long-term.”
Miroslava Salazar with AFP
