On Tel Aviv's waterfront, the luxury Mandarin Oriental hotel's construction site is at a standstill. Cranes and scaffolding are deserted. Nearly 80% of all projects under construction in Israel seem to have been frozen.

With the Hamas-led terrorist attacks dragging down the consumer activity of a traumatized society, a third of restaurants in major cities have not reopened, due to a lack of employees and sometimes even customers. Thousands of volunteers are now arriving from towns in the countryside to make up for the lack of workers to pick up the fruit that is now in season. WhatsApp groups have sprung up to send volunteers to hospitals and supermarkets, but it's hard to tell if this surge of solidarity will last. When 160,000 people have been displaced, how could the economy not suffer?

Above all, the high-tech companies of which the country is so proud have seen their workforce of "geeks" and skilled executives melt by 10-15%, with nearly 360,000 reservists being mobilized by the army, equivalent to 10% of the working population. How many of these start-ups will survive, in a sector contributing 18% of the country's gross domestic product (GDP)? "All fundraising is frozen, and the sector is clearly in crisis," said Frédéric Samama, a French investor based in Tel Aviv.

Admittedly, these difficulties had begun long before the Hamas attack, as the global tech sector saw its fundraising slashed by three-quarters year-on-year, to just $873 million (€829 million) in the second quarter. But, the army's mobilization of many employees from this sector is undermining activity, with experts in cybersecurity and artificial intelligence often among the youngest. Between 20% and 30% of their workforce is on the front line, according to Samama.

"I have one project manager working in intelligence, a developer who flies drones, and another project manager now in artillery," said Ami Daniel, head of Windward, a start-up specializing in shipping analysis, "so, we're working more and sleeping less." With 60% of its workforce in Israel and the rest in Ukraine, India, the US and Europe, Windward is nevertheless fortunate to be "sufficiently internationalized to cope with the situation," admitted the boss.

Impact of mobilizing army reservists

"In the long term, I'm sure the sector will do just fine, given the resilience of Israeli society," said Joshua Levinberg, co-founder of JAL Ventures and Gilat Satellite Networks. At 70, the veteran of the Yom Kippur War has seen it all. But he has to admit that "American and European investors are thinking things over and, for the moment, prefer to wait and see how the situation turns out. Only the bravest, or perhaps the smartest, can take advantage of the devaluation of the shekel [Israeli currency] to do good business."

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