OpinionThe Israeli state must support its tech industry. Here's how.
Opinion
The Israeli state must support its tech industry. Here's how.
"From the Web Summit annual conference to the scandal surrounding the dismissal of the Israeli employee from Intel, the Israeli tech industry finds itself at the forefront of the wartime campaign and needs to receive the right tools to prevail," writes Moran Chamsi, Managing Partner at Amplefields Investments Fund
Even in these challenging times, The Israeli tech industry has remained a steadfast pillar driving the economy forward, serving as a source of global innovation and, for Israelis, a source of national pride. However, headwinds that have been blowing for nearly two years, and even more intensely since the outbreak of the war, now threaten this economic driver.
For the past year, whether by choice or circumstance, the Israeli tech industry has found itself on one of the battlefronts – the economic front. Throughout this period, investors, entrepreneurs, and opinion leaders have taken a strong stance: protesting the dismissal of Paddy Cosgrave, founder of Web Summit, after he called for a boycott against Israel; supporting Yizhar Shai's Next October initiative; mobilizing the tech industry to aid both the home front and frontline fighters, all while upholding high professional standards under the banner "Israeli Tech Delivers: NO MATTER WHAT"; engaging in battles within the world of venture capital between Israeli funds and those demonstrating hostility; and more.
Even more complex are the cases involving global multinational or Israeli corporations – where anti-Israel factions have emerged (e.g. at Google and Amazon) or incidents where employees have made inflammatory statements against Israel (e.g. at Wix). A particularly serious incident occurred recently with the dismissal of an Israeli employee after he complained about encountering hostile attitudes at his workplace, Intel. This escalation signals a dangerous trend for the entire industry.
Despite these challenges and difficult circumstances – including a shortage of employees due to reserve duty, the need to support employees of startup companies during the war, and the struggle to secure foreign investment – investments in Israeli startups have shown signs of recovery in recent quarters. Israeli innovation, entrepreneurial spirit, and pursuit of excellence have managed to overcome all challenges and achieve the unthinkable in times of war – halting the decline in investments.
However, this resilience cannot last indefinitely. While multinational companies appreciate Israeli innovation, they are reconsidering their steps in a region that grows more controversial and less stable with each passing month. Startups that managed to survive the first year of war, combined with a pre-existing global recession, are beginning to run out of resources and funding, with some closing down (mirroring the trend in the US, where just last week it was reported that the number of startups closed in the past year surged by 60%!). The downgrade of Israel's credit rating is also unwelcome news for the Israeli economy in general and for investments in the Israeli tech industry, which relies primarily on foreign capital. Israeli entrepreneurs have always maintained professionalism and technological leadership, but their Israeli identity has now become a significant factor on the economic battleground, whether we like it or not.
In such difficult times, the state must support the tech industry even more, on three levels:
- For multinational corporations operating in Israel, it is crucial to create significant incentives for them to expand their operations and convey that, with regard to the tech industry, business continues as usual.
- For investors and startups, changes in taxation and regulation are necessary to encourage the continued flow of capital to the industry (such as the expansion of the "Angels Law").
- At the employee level, the state must establish a body that provides legal assistance and information for employees in international companies who encounter hostility and discrimination. This would inform them of their rights while giving them tools to address these challenges. A similar effort should be made to address global Israeli companies whose employees incite against Israel.
For those who harbor animosity towards Israel, damaging the Israeli tech industry would be the icing on the cake following partial successes recorded in academic institutions in the United States and in trade relations with other countries. The tech industry can win this fight; it possesses all the abilities and talent necessary to maintain industry leadership for many years to come.
The contribution of the Israeli tech industry to the Israeli economy, the home front, and morale is invaluable, but as the war escalates, it is necessary to move from sporadic initiatives to a concentrated national effort. Benefits and support for the tech industry are needed now – before it's too late.
Moran Chamsi is a Managing Partner at Amplefields Investments Fund
