5 biggest trends in Israeli tech

Waterfront view of Tel Aviv / Photo credit: sedmak / 123RF

Like every other tech hub in the world, Israel’s is wholly unique. It is affected by local events, cultural norms, government policies, and geopolitics.

The following are some of the biggest trends we’ve seen.

Israel’s defense-tech spillover

As consumer and defense technologies converge, Israel’s defense apparatus and the country’s tech industry get closer.

Retired Israeli generals have become regulars on the boards of homegrown startups and many former employees of Israeli intelligence agencies have gone private, selling their skills and technologies to billionaires and foreign governments.

Israeli tech companies take on some cyber-operations that used to be carried out internally within Israeli’s defense apparatus. At the same time, the likes of Mossad (the country’s national intelligence agency) and Internal Security Agency have set up venture investment arms and startup incubators.

The US-China-Israel tech triangle

The US is not only Israel’s biggest ally, it’s also the default market for nearly all Israeli startups.

But an influx of Chinese investments, coupled with new market opportunities in China’s mainland, brings a wind of change. Combine the trend with an active US-China trade war and a long history of Israeli-US tension over Israeli defense exports to China, and what you get is a delicate geopolitical dance.

An international crackdown on Israeli online fraudsters

From binary options trading platforms, online ad injectors, to even shadier businesses, Israel plays host to hundreds of companies walking a fine legal line. In many cases, these companies cross over to the criminal side. While Israeli police bide its time in handling the problem, citing jurisdictional issues, international agencies are already cracking down on some of these outfits, pointing fingers at Tel Aviv.

Automakers flock to Israel

It started with the largest ever acquisition of an Israeli technology company: Intel’s US$15.3 billion acquisition of Jerusalem-based auto chips developer Mobileye. Three years later, over a dozen car manufacturers have on-ground operations in Israel, tapping local talent, driving wages higher, and bringing the tech developed in Israel into cars and mobility systems the world over.

Talent crunch

As more multinationals set up operations in Israel, the hunt for local talent grows fierce. For some Israeli startups, this is a dire threat, as the likes of Amazon and Facebook snatch their top employees. Artificial intelligence experts are the focus, with government agencies and academic institutions scrambling to put in place new curriculums and reforms that would position Israel as a future leader.

See: Israeli tech is facing a severe talent crunch. Here’s what can be done

Diversity

Israel’s tech industry is a safe place for the various factions of Israel’s fractured society and a platform for shared creativity. Arabs, Jewish Orthodox men, and, to a lesser degree, women, have been left out of the country’s tech boom. This has deepened economic gaps and threatened to make an almost unbridgeable co-existence even more precarious.

While some trends are positive and a slew of government and private programs aim to make Israeli tech more inclusive—change is slow to come.