Last week was an exceptionally good time for Israel’s economy. Microsoft announced that it was planning an additional 2,500 jobs in the country, spread over 5 new operational centres. And easyHotel revealed its plans for launching in the Holy Land. Both statements represent a very powerful ‘thumbs-up’ for the country.

The Bank of Israel has also drawn an optimistic picture. As fears of inflation is dominating discussions amongst many world bankers, the BoI left the rate of interest unchanged. It feels that the shekel will remain high and thus protect most suppliers suppliers from facing higher prices.

What I think is of most interest is a trend I picked out in the high-tech sector.

Yes – let’s quickly deal with the elephant in the room. The competition for human capital is playing havoc with salary packages. And the government is reacting too slowly with introducing post-corona retraining programmes. However, as the Innovation Authority reported back in June, there are approximately 13,000 open positions – down from 19,000 two years previously.

However, that same report also noted:

Israeli high-tech has demonstrated a high level of resilience in responding to the economic impact of the coronavirus crisis thanks to the sector’s ability to respond quickly to the new working environment and uncertain conditions. In 2020 and 2021, the sector demonstrated growth according to various economic indices.

The capital raised by Israeli start-ups has more than quadrupled over the past decade, and in 2020 totaled $11.5 billion – 20% more than the amount of capital raised in 2019. The average size of an investment round increased by 10% compared to 2019, with the bulk of this growth in funds raised by later-stage start-ups, some of which raised unprecedentedly large rounds totaling hundreds of millions of dollars.

Within five years, the Israeli high-tech sector increased by sevenfold the number of investments in excess of $100 million – from 3 such investments in 2015 to 20 investments of more than $100 million during 2020. Moreover, in the first quarter of 2021 alone, some 20 investment rounds of more than $100 million were closed (according to IVC Data – The Israeli Tech Review, Q1 2021).

Israel Innovation Authority Annual Report, 16.6.2021

The past month has seen two Hollywood giants echo these trends. Ashton Kutcher is partnering up with Israeli cultured meat co MeaTech. This follows a decision from Leonardo diCaprio to invest in a similar Israeli firm, AlephFarms.

It is easy to list other successes. The point is that when you link up all these stories, there is a clear positive pattern for the Israeli economy that had seemed to be drifting for the past couple years, because of political instability and corona. Hopefully, that period is now in the past.