Israel’s Tech Industry: Resilience in Adversity


Israel’s renowned tech sector, often hailed as the “startup nation,” has weathered various storms throughout its existence, emerging stronger each time. The industry has stood tall from economic downturns and global pandemics to geopolitical conflicts, and its current resilience is no exception.

The Power of Tech in Israel

Tech stands as the cornerstone of the Israeli economy, constituting its single largest sector. Even before the conflict, concerns were arising. Some tech leaders pointed to government plans to weaken the judiciary, causing unease among investors and exacerbating a global slowdown in startup fundraising. Despite the challenges, Israeli tech firms, accustomed to operating in turbulence, have established “playbooks” to ensure business continuity. 

Economic Pillar Under Strain

The tech industry is not just a vital economic player; it is the linchpin of Israel’s GDP, accounting for 18%. Furthermore, it contributes to half of the country’s exports and 30% of tax revenue, underscoring its indispensability to the nation’s economic health.

While acknowledging the immediate difficulties, Israeli tech companies express optimism that the sector’s resilience would prevail. A “Statement of Support” for Israeli startups, entrepreneurs, and investors garnered signatures from over 500 VC funds worldwide. The statement emphasized Israel’s integral role in the global innovation ecosystem and called for collective support during challenging times.

Filling the Workforce Gap to Deliver Business Goals

The immediate impact of the war on the tech workforce has been significant. With more than 300,000 military reservists called up, Start-Up Nation Central (SNC) estimates that approximately 10% of tech employees in Israel have been drafted, with certain companies seeing rates as high as 30%. In response to this unique predicament, tech companies are navigating uncharted territory by deploying creative strategies to fill the workforce gap and sustain their commitment to delivering on business goals.

Recognizing the need for swift action, many tech leaders are turning their gaze beyond the nation’s borders to tap into global talent pools. In a departure from conventional hiring practices, companies seek skilled professionals outside of Israel to augment their teams and maintain operational continuity. The rise of remote work, accelerated by the global pandemic, has proven to be a key enabler in navigating the current talent shortage. Tech companies, accustomed to agile and decentralized work environments, are leveraging the flexibility of remote work to seamlessly integrate professionals from different parts of the world into their teams.

This approach not only facilitates a rapid response to the immediate workforce gap but also positions companies to adopt more inclusive hiring practices in the long term. As the borders of physical offices dissolve, the industry is embracing the idea that talent knows no geographical boundaries.

Navigating Workforce Challenges: The Power of Strategic Partnerships

In the face of a significant talent shortage brought about by the recent conflict, Israel’s tech industry is turning to strategic partnerships as a beacon of efficiency and reliability. Partnering with a trusted ally can be the key to addressing immediate staffing challenges while deftly navigating the complex seas of international laws and regulations.

Efficient Team Setup with Global Expertise: A reliable partner can expedite the hiring process, allowing companies to hire and onboard developers or entire teams simultaneously, complete with a site manager or Team Lead in just two weeks. This streamlined approach not only ensures a cohesive team but also mitigates the challenges associated with managing dispersed talent. This accelerated timeline is crucial in times of urgent talent needs, ensuring that projects stay on track and business goals remain achievable.

Global R&D Centers: A Seamless Reality: Setting up a fully equipped Research and Development (R&D) center on a global scale becomes a tangible and efficient goal with the right partner. From navigating local regulations to providing the necessary infrastructure, a reliable ally can turn this complex endeavor into a seamless process.

Trust in Talent’s Expertise and Background: Partnering with a reputable entity assures companies of the expertise and professional background of the talent they bring on board. This not only enhances the quality of the workforce but also eliminates uncertainties related to the skills and capabilities of the hired professionals.

Mitigating Risks in International Hiring: Navigating the complexities of hiring expatriates can be a minefield of legal and regulatory challenges. A trusted partner can help companies navigate these waters, ensuring compliance with international laws and regulations, and minimizing the risks associated with hiring from different countries.

Transparent Cost Calculations from the Outset: Understanding and managing costs is a critical aspect of any business operation. Partnering with a reliable entity allows companies to calculate costs transparently from the beginning, eliminating hidden surprises and ensuring budgetary control throughout the hiring process.

Focus on Innovation, Not Operations: By entrusting staffing operations to a reliable partner, companies can redirect their focus toward product development and innovation. Free from the burdens of routine hiring operations, teams can channel their energy and resources into driving the core objectives of their projects.

As Israel’s tech industry faces turbulent times, these strategic partnerships emerge not just as lifelines but as catalysts for transformation. They signify more than efficient hiring; they symbolize resilience, adaptability, and an unwavering commitment to innovation. In this voyage through uncertainty, the tech sector not only survives but continues to set sail toward a horizon brimming with promise, creativity, and growth.

About the Author
Andrii Bezruchko, CEO and founder of Newxel company. Newxel stands as a global IT staff augmentation powerhouse, excelling in full-cycle tech recruitment services and R&D center development. Newxel has established a prominent presence across 11 locations worldwide, driving revenue of around $20M. Prior to that, he spent more than 20 years developing software and building and managing development teams and R&D centers worldwide, donning hats as CTI/CIO and Director of R&D across diverse companies.
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