Israel's hi-tech sector, a stalwart of the nation's economy, is showcasing resilience in the ongoing conflict, as noted by OurCrowd CEO Jon Medved during a press event held Wednesday night. Despite the challenges, the tech community remains fully mobilized, contributing significantly to stability and functionality during these testing times.
Representing 14% of the workforce, contributing 18% to the GDP, and accounting for over 50% of exports, Israel's tech industry has played a crucial role in the nation's economic landscape. Over the last three years, an impressive $50 billion has been invested in Israeli technology, with 80% of the funding coming from overseas.
Medved pointed out that, despite companies having between 10% and 25% of their workforce in reserves, commitments and service level agreements are still being met efficiently.
“The tech community is fully mobilized,” he said. “The country as a whole has about 8% of its workforce pulled up in the reserves, but in technology, it's two to three times that. However the companies seem to be, by and large, handling it well because of multitasking, because of redundancies built in, and because frankly, this isn't our first rodeo.”
An outpouring of support
Medved praised the civilian response in the ongoing conflict as noteworthy, with civilians leading command centers, driving initiatives from blood donations to food collection. “The civilians are really stepping up, especially in those areas where other parts of this society — maybe the government, for example — have left a little bit of a vacuum,” he said.
That support is not just being felt at a local scale, Medved pointed out. “We are bolstered by a really unprecedented outpouring of tech support from around the world for Israel and its tech community,” he said, highlighting supportive statements from President Biden and 800 firms who have expressed solidarity with Israel's tech community.
Medved emphasized the tech sector's active role in providing essential technology during the conflict. Companies like mPrest, supplying software for Israel's Iron Dome system, and Edgy Bees, contributing drone and satellite-based mapping technology, showcase the industry's involvement in crucial areas.
A growth bump on the horizon?
Despite economic warnings and downgrades, Medved presented historical data indicating that Israel's hi-tech sector not only recovers but experiences growth a month or two into conflicts. Graphs depicting GDP per capita and venture capital investment demonstrate this resilience.
Recent major tech exits during the conflict, such as Palo Alto Networks acquiring Talent for over $600 million, hint at a robust tech market. Medved also discussed currency dynamics, noting rebounds in the Israeli shekel and the Tel Aviv Stock Exchange 35 index, showcasing potential stabilizing effects.
“On the Tel Aviv Stock Exchange 35 index, you'll see that there was a very steep drop the first day of trading after October 5. But you'll notice that the rebound has started happening again: we're up about eight to 9% from the trough over the last couple of trading days. And we'll see if that rebound holds,” he explained.
Addressing the timing of the attacks, Medved expressed hope that the reconciliation process with the UAE and other Arab nations will overcome challenges. “There's been a lot of discussion about whether or not this is going to put a nail into this incredibly important process, or whether the process is going to overcome this challenge and move forward in terms of historic reconciliation between Israel and its Arab neighbors,” he said. “Who knows what's going to happen, but at least people like myself retain hope. We believe that we will continue this historic process.”
Medved acknowledged the profound impact of the recent events, drawing parallels to the lasting impact of the Holocaust. While recognizing the collective trauma, he emphasized Israel's historical resilience, noting that crises are inevitable, but how one reacts is key to moving forward.
“We are — unfortunately or fortunately, probably a little of both — the masters of crisis. This isn't our first war. We've had worse ever since I got here, ever since the beginning, yet we move forward and build,” he said. “Yes, we’ve had terrible losses. There is not a person who doesn't know somebody who was a hostage or was killed, everybody is involved. I'd much rather be talking about all the wonderful companies and all the positive things that we're doing, but this is where we live.”