<img src=”https://storage.googleapis.com/prod-zenger-upload/image/20230704/feat_f1dedff2-25c2-4be9-a132-8247d9571e7e.jpg” alt=”An aerial view taken on April 13, 2023 shows the northern Israeli kibbutz of Yiron which was established in 1949 less than two kilometres from the Lebanese border, on the ruins of a Palestinian village destroyed by Jewish forces during the 1948-1949 Arab-Israeli war. Entrepreneurs are repurposing the Israeli kibbutz into hubs for creative and hi-tech industries, after decades of decline in the rural communities once considered models of socialism. MENAHEM KAHANA/AFP/GETTY IMAGES“>
The high-tech industry is the fastest-growing sector in Israel’s economy, with the highest productivity and the most significant contribution to the economy, according to a new “State of the High-Tech Industry in Israel 2023” report from the Israel Innovation Authority.
According to the report, about 14 percent of Israeli citizens work in technological and non-technological high-tech professions. This sector enjoys the highest growth rate in the number of employees and the fastest increase in wages.
Salaries in the tech sector are nearly three times higher than in the rest of the economy, and job satisfaction in high-tech is twice that of other professions in Israel.
Highlights from the Innovation Authority report:
Life sciences and climate tech
Approximately 30% of the IIA’s investments in 2022 were directed toward life sciences, which includes pharmaceuticals, medical devices, and biotechnology, compared to only 7.5% of private investments in these segments.
The report also took note of Israel’s growing climate-tech sector, numbering 516 companies. Around 24% operate in the energy sector, while 37% are involved in agriculture, food, and water. Fundraising for Israeli climate-tech companies has grown threefold from less than half a billion dollars in 2018-2019 to over $2.5 billion in 2021.
At the same time, the report found that Israel remains a software nation, with organizational software, fintech and cybersecurity accounting for over 40% of startups established each year and over half of the investment flow. In 2022, 70% of the total investments were in software domains, compared to 48% in 2013.
“Concerns about the corporate structure in Israel and warnings from global rating agencies have joined a complex global economic period that began in 2022 with the halt of the extensive capital inflows that governments worldwide provided to stimulate markets during the COVID-19 pandemic,” said Dr. Ami Appelbaum, chairman of Israel Innovation Authority.
“This period continued with the Russia-Ukraine conflict, challenges in global supply chains, and a rise in global inflation and interest rates. All these factors have caused significant difficulties for the Israeli high-tech industry, resulting in a 70% decrease in capital raised in Israel.”
Today, Appelbaum said, “We are at the threshold of a period in which three domains of innovation are poised to transform the world as we know it: Generative AI, quantum computing and communication, and innovation in climate-related fields. The need to preserve Israel’s national resilience does not allow the country to slow down innovation in any of these areas and lag behind. It is a period of deep economic and social crisis, but also a period that presents opportunities if we can navigate wisely.”
Produced in association with ISRAEL21c