When it comes to technology, Israel has long been a powerhouse in the game. The US and other countries have particularly lucrative defense deals that purchase the latest state-of-the-art equipment from Israel, as they are known for being world leaders in the space. The hardware and software sector is particularly competitive and innovative. But will 2020 continue to see Israel continue to make gains?
A look back at 2019
2019 was a good year for the Israeli exports, with it growing to new record heights - $114 billion, up from $109 billion the year before. According to Reuters, “The Economy Ministry said the increase this year stems mostly from a nearly 12% rise in services exports, with growth led by the high tech sector such as software, computing and research and development services.”
In 2019, it also became the year of the unicorn, with no less than 20 Israeli companies hitting the $1B valuation mark - “more than France, Germany, and Australia combined” - as per Israel21c, with taxi-hailing service Gett, Cybereason, a cybersecurity company, and the task management app Monday all getting the unicorn seal of approval. Not only this, but start-ups raised more than $6billion in venture capital. It was a great year all round for tech, with predictions indicating the rise would be ongoing.
Israel as an innovator
It should come as no surprise to anyone that follows tech markets that Israel sits in the 6th place position in Bloomberg’s annual Innovation Index in 2020. This is despite the fact that it slipped down a spot from last year and lags behind other nations such as Germany (#1), South Korea (#2), and Singapore (#3). This still puts it ahead of other countries that are far richer by GDP, such as the US, China, and Japan. In fact, Israel sits at #33 on the list of countries by GDP - markedly less than Germany and South Korea.
It’s often said that smaller countries are better placed to be innovators as they are less likely to be stifled by far-reaching, large legislations - they are able to experiment more easily and change rules when things don’t work out.
Will 2020 change things?
While the world is currently in a state of flux, due to the ongoing effects of coronavirus, it can be difficult to ascertain where each economy will stand when things start to calm down and ‘return to normal.’ This has made the future of almost everything less certain.
Israel has seemed to have done just as well as not better with keeping coronavirus under control than other countries, if not better. Restrictions on movement and gathering, and implementing face coverings and phone-based tracking were rolled out in a fairly timely manner, and despite economic concerns about the distribution of aid, established tech companies are unlikely to go under.
While the response has been different in different parts of the world, it seems like Europe and the US have borne the brunt of the virus, which may make these economies slower to recover.
Tech in 2020
Obviously, 2020 has been ruining for many businesses, but a boon for others. Who could’ve guessed that Zoom’s user base would jump from 10 million to 200 million in mere months? In 2020 new no deposit free casinos will launch with technologies not from a single country, but alongside other tech innovators such as Sweden and South Africa. Plenty of companies have been forced to pivot, restructure, shift supply chain operations, and turn their workforce around quickly.
For Israel’s tech hardware manufacturing sector, plants have closed, and in sometimes, staff has been laid off. In software, there have been job losses and furloughing, with the hope to get back to full-time operations as soon as is possible. For companies that have not been running at a loss, or only with a small amount of savings to run off, it will be possible to stay afloat. For defense, we can expect private companies and the military itself to be running leaner than usual for at least 18 months and beyond.
Ultimately, Israel is in the same shape, if not better shape, than other economies at this time. The concentration on tech over the past years has made sure that it will continue to be a mainstay industry. Because it is a smaller country, that has managed so far to keep things fairly under control, it means that it may be better up to the task at bouncing back than others, such as the United States.
Will any country be a powerhouse in any industry in 2020? It’s unlikely. While China has a grasp of mask manufacturing and is slowly starting up their economy again, it will take a while for all industries to recover. The Israeli tech sector is still poised to continue growth - it might just take a little while to get back there.