JERUSALEM’S HAR HOTZVIM is home to many hi-tech companies. .
(photo credit: MARC ISRAEL SELLEM/THE JERUSALEM POST)
Long considered economically and socially antiquated, as well as inherently challenged due to its unique geopolitical and social constructs, Jerusalem has nonetheless made great strides as a burgeoning tech center over the last decade.
Indeed, in 2015, Time magazine named Jerusalem one of the world’s fastest growing hi-tech hubs.
Furthering this progress, Startup Genome’s 150-page 2017 report ranking the world’s 20 top start-up economies gives Jerusalem a “runners- up honorable mention.” Its analysts assessed 55 start-up ecosystems across 28 nations.
Although Jerusalem didn’t crack the top 20, it was listed among eight runners-up that included Atlanta, Delhi, Denver-Boulder, Helsinki, Moscow, Mumbai and Salt Lake-Provo. The capital first received honorable mention in 2015, four years after the list was first compiled. It was mentioned again in 2016.
Tel Aviv, long an internationally distinguished tech hub, ranked 6th overall on the list.
Despite not making the top 20, Jerusalem took third place internationally in the category of international customers, one of the numerous metrics used to devise the final list. In that category, Jerusalem beat out Silicon Valley, which placed fourth; Tel Aviv and New Zealand, respectively, took the top two spots.
Jerusalem ranked fifth worldwide in terms of exit value per share (over 5%), another metric used by analysts to compile the final top 20.
“With a population of almost 1 million – one-third of which is Muslim – Jerusalem’s start-up ecosystem thrives on diversity and the actions of a helpful city government,” the report stated.
“The city boasts a number of recent start-up successes in cutting-edge realms like computer vision (image processing, virtual reality), machine learning and artificial intelligence.”
Drawn to its academic and healthcare business sectors – as well as its tax incentives – the number of hi-tech startups in the capital grew from 200 in 2012 to more than 600.
Thanks to these growing sectors, the city – whose economy has long foundered due to high Arab and ultra-Orthodox unemployment – is now experiencing what some are deeming an economic renaissance.
“Jerusalem is a top contender that narrowly fell outside of this year’s top 20 ecosystem index overall,” the report concluded.
“The city’s weakest factor is performance where, interestingly, its exit value is very strong but the total value of the pre-exit start-ups is weak, indicating strong outlier performance, with weaker fundamentals,” it stated Jon Medved, a 30-year veteran business leader and CEO and founder of OurCrowd, a Jerusalem-based venture-capital platform, said the city has all the tools necessary to become an international powerhouse.
“There is a lot of human capital here,” he said. “When you look for a place to set up shop as a start-up company, you look for a couple of things: First and foremost, is human capital – the people available who you can hire. And, for us in particular, given the global nature of our business, all the immigrants here really help us. We have Anglos, Spanish speakers, Chinese speakers – they’re all here.”
“People forget how cosmopolitan Jerusalem is,” Medved added.
Moreover, noting the planned sprawling business district at the western entrance to the city, which will be accessible by a highspeed train to and from Tel Aviv, Medved said Jerusalem is poised to become one of the world’s most venerable technology hubs.
“I think it will be a complete game-changer,” he said. “I think that it will take an already exciting, dynamic scene and supercharge it to warp speed.”