Israel has emerged as the leading player in the tech industry, thanks to its massive startup potential, research and development investment, and business-friendly government policies. In 2022, Israeli high-tech companies raised $14.95 billion through 663 deals, and cybersecurity startups raised $8.8 billion. This is more than three times the amount raised in 2020. Israel invests 4.1% of its GDP into research and development which is twice the OECD average, and it is ranked number two in the world of research and development expenditure per capita. It is also home to research and development centers for major companies such as Amazon, Apple, Cisco, and Google.
Tel Aviv is the seventh largest startup ecosystem in the world with a $120 billion startup value in 2022. Startups raised $20 billion in 2021, accounting for 63% of the national total. Various government programs and tax incentives, such as Yozma, have helped create a haven for entrepreneurs and innovators in Israel.
Factors driving Israel’s business success include the presence of United States Venture Capital firms and Israeli founders moving headquarters to tap into local investments. Another driving factor is the talent produced by Unit 8200, an elite cybersecurity intelligence unit. Israel has also established over thirty grants and tax incentive programs for research and development, employment aid, and intellectual property.
The Abraham Accords have also extended Israel’s economic relationships in the Middle East, creating opportunities for job creation and increased trade. With its startup potential, business-friendly policies, and global outlook, Israel, the startup nation is set to remain a dominant player in the tech industry for many years to come.