Israeli government must adapt, incerase support for hi-tech ecosystem - opinion

The Israeli government must adapt and better support the high-tech and startup ecosystem.

Since the war began on October 7, 2023, Israel's high-tech and startup ecosystem has been grappling with a drastically altered reality. The Initial Shock: The early days were marked by a profound sense of shock.

With the nation in survival mode, work seemed like a secondary concern. As the conflict stretched into a prolonged state of war, the challenges became clearer. A Workforce in Flux: A significant number of employees were called to reserve duty, creating a notable labor shortage.

Yet, in true Israeli fashion, adaptability prevailed. Many reservists continued working from the field, using laptops whenever they could spare a moment. The New "Normal" Life in Israel has taken on a surreal rhythm.

Work happens when possible, often interrupted by air raid sirens. Calls with international clients are paused mid-conversation as Israelis take cover in bomb shelters or lie on the ground, hoping for safety.

Later, those calls resume with an explanation of the "new normal," which is far from normal by any standard. Families displaced from border areas now live in hotels or rented apartments while parents scramble to find new schools for their children.

Israel’s high-tech sector faces travel, budget, and growth challenges

Amid this upheaval, professionals are navigating whether to travel abroad for client meetings, balancing the risks of leaving their families in uncertain circumstances. Challenges of International Travel Travel has become a logistical and emotional challenge.

With fewer airlines willing to fly to Israel and skyrocketing ticket prices, every trip involves a new layer of uncertainty. The fear of extended delays or canceled flights complicates decisions, as leaving family behind for longer than planned feels increasingly burdensome.

Adapting Through Resilience: Despite these difficulties, the Israeli tech sector continues to demonstrate remarkable agility. Companies are finding ways to maintain operations, even under severe constraints. The Ministry of Economy and Industry has introduced grants and support for businesses attending international events, though such measures are only small steps in addressing the broader challenges.

Aviation and Conference Setbacks, El Al, Israel's national airline, recently implemented price caps on tickets to curb the soaring costs. However, a lack of sufficient flights remains a bottleneck. Additionally, the government has yet to resolve insurance issues with foreign airlines, deterring them from resuming flights to Israel.

The international conference landscape in Israel has also been severely disrupted. Foreign companies are understandably hesitant to send representatives to Israel, leading to event cancellations. These cancellations not only result in immediate financial losses but also risk erasing these events from future calendars, diverting their relevance and attendance to conferences held outside of Israel.

The Government's Role: Amid this crisis, the 2025 budget proposal adds further strain. High-tech professionals, who are already shouldering extended reserve duties and higher taxes, face additional burdens. Meanwhile, segments of the population, such as the ultra-Orthodox community, remain exempt from military service, exacerbating social tensions.

Moving Forward, Israeli innovation thrives on resilience and adaptability. While the current situation presents unprecedented challenges, the tech and startup community has shown its ability to overcome adversity in the past.

However, sustained government support, international cooperation, and a long-term strategy are crucial to ensure that Israel's high-tech sector continues to thrive in these uncertain times.

The government must take proactive steps to help the high-tech and startup ecosystem in greater steps.

Small grants will not be cut, and the majority of new startups that are being founded in Israel aren't being registered in Israel, so some of the income from possible exits will not come back to Israel.

The government must take proactive steps to support the high-tech and startup ecosystem on a larger scale.

Small grants alone are insufficient. The majority of new startups being founded in Israel are not being registered domestically, meaning potential income from exits may not return to the country. To ensure the long-term sustainability and growth of IIsrael's innovation sector, more substantial measures and incentives are needed to keep startups rooted in Israel, fostering local investment and benefiting the national economy.