It was only a couple of years ago that we were reading that the Israeli hightech juggernaut would come to a halt. There were not enough exits of value. And not enough large corporates were being developed.

Hmm. Well, depending on how you identify a unicorn, there are now in Israel at least 45, as of August 4th 2021. And just this week, Papaya announced a US$3.7 billion valuation. As for creating the next conglomerate, it is estimated that there is a shortage of qualified labour in the country, probably to the tune of 15,000 jobs. (Hightech represents about 10% of all jobs in the domestic employment market.)

And then along came the Sparks Consulting Group. Their study delved deep into those employment numbers.

….. in 2020, Israeli tech had 335,000 employees, of whom 50% were tech staff and the other half support staff in marketing, finance, human resources etc. …….. the success of the sector depended on a small group of about 6% of total employees, or just over 20,000 people.

The big danger is the brain drain scenario – twice over. First, much of the core talent is inevitably sucked into the big five like Google, already operating in Israel. Few can match their conditions of employment. Alternatively, these top leaders could drift abroad, lured by seemingly greener pastures.

Is the start-up nation concept going to disappear overnight? Obviously not. That said, leaders and planners of Israel’s economy will need to devise new and bolder incentives to ensure that home-grown talent stays…. at home.