The ongoing conflict with Hamas is poised to disrupt a fragile recovery in Israel’s crucial tech sector, warn investors and analysts. This setback follows the decline in the world economy and the divisive judicial reforms enacted by the government earlier this year, which caused a considerable reduction in financing.
Israel, renowned as one of the world’s most innovative high-tech economies, heavily relies on this sector, accounting for 14% of its workforce and nearly a fifth of its overall economic output. Despite enduring decades of regional turmoil, it is anticipated that investments will rebound once the conflict subsides and global fundraising regains momentum, according to experts.
Jon Medved, Chief Executive of OurCrowd, one of Israel’s largest venture capital firms, expressed concerns: “Overseas investment will slow down in the coming weeks and months, particularly as hostilities persist. This is a challenging time to secure investment, with numerous flight cancellations to Israel.”
After a deadly assault by gunmen from Gaza on Saturday, the situation widened when Israel declared war on the Palestinian militant organization Hamas. Since the onslaught by Egypt and Syria on Yom Kippur 50 years ago, this infiltration has been the deadliest breach of Israeli land.
As Israel navigates these challenging times, the tech sector’s stability and resilience remain pivotal, with hopes that peace will eventually reignite its growth trajectory.
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