Jerusalem or Tel Aviv: The Middle East’s tech capital - opinion

Being the center of the world’s major religions, people from across the globe look to Jerusalem for inspiration and the ability to make a great impact.

 TAKING IN an Old City view through virtual reality glasses, at Jerusalem’s Tower of David.  (photo credit: HADAS PARUSH/FLASH90)
TAKING IN an Old City view through virtual reality glasses, at Jerusalem’s Tower of David.
(photo credit: HADAS PARUSH/FLASH90)

Everyone knows that Tel Aviv is the epicenter of technology in Israel. Ranking as the third-largest tech scene globally by practically every metric, the city has transcended any expectation of what is possible when it comes to scaling and building impactful businesses.

Jerusalem has also slowly been building a reputation for itself as a formidable leader in both the country and the region at large. Much of this is thanks to the grassroots work of organizations such as Made in JLM and the Israel Innovation Authority.

What has made Jerusalem unique as a tech scene are its diversity and rich history. Being over 5,000 years old, Jerusalem has a wealth of knowledge and passion from its residents. This has resulted in an incredible grassroots movement toward building the city up as a fast-growing tech scene on the global stage. Today, the city boasts more than 600 start-ups and billions of dollars in funding.

The past does not always predict the future

Rewind 25 years. If you asked Israeli investors where the country’s tech scene was, they would likely tell you Jerusalem. Amid the rapid tech acceleration in the late 1990s, venture firms such as Pitango, founded by Chemi Peres, the son of former president Shimon Peres, sprang up and poured hundreds of millions of dollars into the ecosystem. The city was by all metrics flourishing, but all the success came to an abrupt halt when the century turned. For starters, the burst of the dot-com bubble led to a general stall in the start-up industry globally for several years.

AERIAL VIEW of Jerusalem's Chord Bridge, August 3, 2021 (credit: MARC ISRAEL SELLEM)AERIAL VIEW of Jerusalem's Chord Bridge, August 3, 2021 (credit: MARC ISRAEL SELLEM)

However, while many ecosystems came out of the burst with strides, Jerusalem saw a complete brain drain and transfer of tech power to Tel Aviv. In September 2000, then-opposition leader and future prime minister Ariel Sharon made a visit to the Temple Mount, resulting in what would become the nearly five-year wave of violence and terror that came to be known as the Second Intifada. As the streets of Jerusalem became de facto war zones, Jerusalemites who would have previously founded and scaled their companies in the city took their talents, and as a result the investment capital, to the coastal city of Tel Aviv. Indeed, the rest is history.

Fast forward to today, and Tel Aviv is a behemoth of an ecosystem, with many of the largest start-ups in the world birthing in the city, and multinational corporations opening up offices in its new lofty buildings.

A slow but steady rise

As Tel Aviv quickly grew to become a global powerhouse in tech, helping Israel to earn the name of “Start-Up Nation,” Jerusalem was void of any tech scene. Even the venture firms based in the city refused to invest in Jerusalem companies, and those that saw success on their own quickly relocated their headquarters to Tel Aviv.

The government has always seen it as beneficial to grow Jerusalem as a commercial hub. For one, it is the nation’s capital and millions around the world visit there every year. Secondly, it serves as a melting pot for a wide range of cultures, religions and identities. Walking through various parts of Jerusalem, one encounters everyone from haredim to Arabs. In many cases living in harmony, in others in bitter antipathy. The government saw this diversity as a means to ending much of the bloodshed that has plagued the city for the past few generations.

The idea of the government and many idealistic Jerusalemites was that if you could build the city as a commercial and tech hub, the increase in wages and opportunity would help bridge gaps between supposed enemies and help create bonds. This started a nearly decade-long process toward building Jerusalem into the tech hub it is today.

A dream of generations

It is no secret that the building of Jerusalem as a thriving city is one that has carried the Jewish people throughout its 2,000 years of exile and has been an invigorating idea since the reunification of the city following the Six Day War. This idea has only continued to take hold as a new generation of idealistic Jews come to positions of power and influence.

Today, as Israel continues to formalize its relations with many of its Arab neighbors, a new bloc of influence and prowess is emerging in the Middle East, this time with Israel at the helm. Having already established itself as a regional and global power, Israel is able to forge strong bonds through common culture, religion and history. As a result, Jerusalem is emerging as not just the tech capital of Israel but as the tech capital of the Middle East.

Being the center of the world’s major religions, people from across the globe look to Jerusalem for inspiration and the ability to make a great impact. To this end, it is no surprise that Jerusalem is now a breeding ground for innovative technologies and companies. Moreover, as additional countries in the region publicize their relations with Israel, Jerusalem is bound to continue in its rapid growth as an economic capital.

Looking to the future

Thanks to the hard work of pioneering Jerusalemites, many of the world’s largest companies such as Apple and Microsoft will open offices in the city in the coming years. This is alongside the already massive start-ups founded in the city such as Mobileye and Lightricks, and fast-growing companies like Vayyar and Visionary.ai.

To complement this growth, the government has invested billions of dollars in the new Jerusalem Gateway project to expand the city’s business district and the International Convention Center. This will work to make the city more welcoming to foreign visitors, as well as create a space for emerging companies and tech leaders to grow and showcase their success. More so, it will allow for the commute of talent from Tel Aviv to quickly enter the city with the under 40-minute train ride.

As Jerusalem continues to grow, it will serve in the mission of leaders past and present to make the capital a place where inspiration and common bonds unite people of all creeds. ■

The writer is an entrepreneur, and Hebrew thinker, known as Osher in Hebrew. A recent oleh, he writes and edits at The Jerusalem Post while also helping to oversee the start-up ecosystem in Jerusalem with Made in JLM. On Twitter: @troyfritzhand.