How Israel Became a Global Tech Leader

Israel has emerged as a major player in tech startups, receiving twenty-eight times more capital flow than the U.S., on a per capita basis.  The country’s high-tech companies raised $14.95 billion in 2022 through 663 deals, and fifty-seven Israeli companies went public in 2021, raising $4 billion, almost three times the amount raised by IPOs in 2020.  Furthermore, Israel invests 4.1% of its gross domestic product into research and development which is twice the OECD average, and is ranked second in the world for research and development expenditure per capita.

Israel is home to one of the largest startup ecosystems in the world, with Tel Aviv being the seventh largest in 2022, boasting a startup value of $120 billion.  The city raised $20 billion in 2021, 63% of the national total, and gained thirty new unicorns, totaling ninety-two unicorns in 2022.  Additionally, major companies like Volkswagen, Anheuser-Busch, Apple, and Citibank have established innovation centers in the city.

Israel has created a haven for entrepreneurs and innovators through various government programs and tax incentives.  Many U.S. venture capitalist firms have offices in Israel, and Israeli startup founders have moved headquarters to thrive in U.S. cities to tap into local investment.  Small local markets and security threats have forced Israeli entrepreneurs to operate globally, and the elite cybersecurity intelligence unit, Unit 8200, has produced a group of world-class cybersecurity experts with the talent to start companies.In summary, Israel’s powerful impact on the global tech scene is due to various government programs and tax incentives, elite intelligence units, a prominent level of investment in research and development, and a need to operate globally.  These factors have attracted major companies and investors, solidifying Israel’s reputation as a startup nation.