Israeli Hi-Tech execs have made their way to the Knesset to sound the alarm. The first blow was the legal coup and now - a decrease of approximately $30 million in the Innovation Authority's budget, which threatens to harm the state's support for Israeli high-tech.
The budget, which in the previous government was $414 million, this time will be approximately $386 million, due to the lateral budget trimmings in the government ministries caused by the increase in the allocation of coalition funds.
Yodfat Harel Buchris, the investment manager of Bloomberg Capital fund in Israel, presented concerning data about the high-tech market in the country. This includes a decline in investments in Israeli companies, a sharp decrease in the establishment of new startups, widespread layoffs, and more.
Harel Buchris emphasized the need for government support, highlighting the alarming situation. "Foreign investors are losing confidence in our ability to deliver. 80% of investments come from abroad. While there is a global crisis, Israel's decline is disproportionately higher.
"It's not just about numbers; there's a negative atmosphere. An entire generation of young companies is being lost. In four months, we've undone what took 20 years to construct from the ground up. The locomotive that drives Israel is derailing, and the Treasury is turning a deaf ear," she said.
MK David Bitan, Chairman of the Economy Committee, addressed the issue, emphasizing the significance of the high-tech sector as a driving force for the Israeli economy. He stressed the importance of preventing any negative impact on the sector to avoid detrimental consequences for the economy.
While acknowledging the gradual nature of political processes, he expressed hope that the situation would not unfold as perceived and assured that efforts would be made to avert such an outcome.
At the conference, Prof. Kendall, the co-chairman of Startup Nation Central's research institute, shared his perspective, stating, "Over my 14 years of studying high-tech, our institute's goal has been to make every Israeli citizen recognize the real value of high-tech for them.
"The GDP per capita is a measure of our quality of life, and there's one industry here that competes globally and employs about 11 percent of our workforce. The downside is that everyone wants to be part of this industry.
"If 10,000 to 20,000 people, some of whom are residents here, leave Israel, we won't have a high-tech industry anymore. Now it's all about when it will happen."
Efrat Raiten, a member of the Labor party, highlighted the repercussions of legal reforms on investments in Israeli companies, expressing, "A robust democracy enables the business sector to thrive in a free and competitive market, rather than relying on proximity to the government.
"The legislation, budget, and government decisions being pursued suggest a growing risk of corruption and the emergence of uncertainty that will undermine the economy, especially in terms of high-tech investments. This will inevitably impact society at large and its resilience."