“If we don't come to our senses, there is a danger of a lost decade, similar to the aftermath of the Yom Kippur War”
“If we don't come to our senses, there is a danger of a lost decade, similar to the aftermath of the Yom Kippur War”
Viola Group founder Shlomo Dovrat also warned that "the markets are showing us that we are not in the right direction and that they don't believe us that much."
"Israel is in a security crisis that started with the legal reform. It is an unprecedented reality - a reality we have not known until today," said Shlomo Dovrat, chairman of investment firm Viola Group and founder of the Aaron Institute, at the institute's annual conference held at Reichman University on Tuesday. "Israel's economy entered the crisis with extraordinary resilience, but the situation right now is fraught with risks in such a way that if we don't come to our senses and act decisively, there is a danger of a spiral and a lost decade, similar to the aftermath of the Yom Kippur War, but much deeper and worse because society is much more divided." He warned that "the markets are showing us that we are not in the right direction and that they don't believe us that much."
Dovrat noted that the war and the political upheaval revealed a deep weakness in the state institutions and the political system: "On October 7, the institutions did not function. The result is serious damage to the citizens' trust and sense of security."
According to Dovrat, Israel has long ceased to be a startup nation, as the current macroeconomic impact extends far beyond startups. He stated, "The high-tech industry is no longer the locomotive - it is the track for the whole train, but it is at risk."
Dovrat explained that the most important challenge for high-tech is how to preserve the relative advantage in artificial intelligence. He said, "This is unprecedented and we have not seen such a phenomenon in at least the last 50 years, if at all. All industries will undergo dramatic changes due to AI. We face a tremendous challenge in human capital. This issue goes beyond the inclusion of Arabs and the ultra-Orthodox. Israel is not necessarily strong in this field. Unit 8200 is not necessarily relevant to AI. There is a lack of infrastructure in Israel, which is necessary for innovation. But there is potential, and we can be at the top. Investments in the world are recovering, but not here."
