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Introduction
As Israel navigates a critical crossroads in its economic development, the country’s tech sector remains its most formidable asset. At the recent Tech1 conference in Eilat, experts from across the innovation landscapeāincluding leaders from EY Israel, Goldman Sachs, and unicorn foundersācame together to examine the nationās trajectory through 2030. The discussion illuminated both the promises and pitfalls facing Israelās innovation economy. With global shifts, domestic challenges, and an evolving startup ecosystem, the panelists offered urgent calls for changeāand a renewed vision for what Israeli success should look like in the coming years.
the Original
At the “Israel 2030 ā Build and Recover” panel at the Tech1 conference, Noam Canetti, Managing Partner at EY Israel, stressed the importance of expanding investments beyond just research and development (R\&D). He pointed out that key areas like marketing, finance, sales, and HR are underfunded, yet essential for scaling companies domestically instead of relocating to the U.S. Israel, he said, is currently navigating a āperfect stormāāfacing technological disruption, socio-political instability, and stiffening competition from other innovation hubs.
Canetti emphasized that Israelās lack of natural resources, cheap labor, or a sizable internal market makes tech its only viable growth engine. He noted a shift in the startup ecosystem, now populated by more mature, revenue-generating firms that may not go public but instead pursue profitability or private capital.
Goldman
Tom Livne, founder of unicorn company Grace, highlighted the personal and national resilience needed to sustain tech success. He advocated for profitable growth over unsustainable expansion and emphasized the importance of company culture. Livne also called for deeper involvement in fields like health tech and climate innovation, while encouraging greater inclusion of underrepresented groups in tech, including the ultra-Orthodox and Arab populations. He concluded that continued investment in Israeli innovation represents a modern form of Zionism and national strength.
What Undercode Say: š§
The insights shared during the panel reflect a pivotal moment for Israelās tech ecosystem, and we at Undercode see several critical takeaways:
1. Diversification Beyond R&D:
Israeli innovation policy has long favored R\&D-heavy startups. While this approach has birthed global successes, it’s no longer enough. For Israel to sustain growth, the same emphasis must now be placed on operations, marketing, talent management, and scaling strategies.
2. Mature Startups, New Challenges:
The shift from early-stage startups to growth-stage companies brings new structural and financial challenges. Many of these firms are choosing profitability over IPOsāa reflection of a global trendābut Israel lacks the infrastructure to fully support them at this stage. This calls for tailored investment policies and corporate development programs.
3. Investor Sentiment Is Strong, But Fragile:
Global investors are still enthusiastic, but not blindly so. Confidence is anchored in talent quality and startup maturity. However, ongoing political instability risks turning that confidence into caution. Stability isnāt just a luxuryāitās a business requirement.
4. Inclusion Is No Longer Optional:
Livneās call to include marginalized communities in the tech workforce aligns with global ESG trends. The untapped potential within Israelās ultra-Orthodox and Arab populations can provide both social equity and economic benefit. Companies that harness this diversity will have a competitive advantage.
5. Deep Tech Is the Next Frontier:
With the rise of AI, digital health, and climate tech, the focus must shift to building products with genuine competitive moats. Israelās strength in cybersecurity and semiconductors should be extended into these emerging verticals through state-backed programs and public-private partnerships.
6. National Culture and Entrepreneurial Spirit Matter:
The concept that “culture eats strategy for breakfast” is a crucial reminder that company success depends not just on business plans but on internal values and leadership. This ethos must extend to the national innovation culture as wellāencouraging bold risk-taking, resilience, and long-term thinking.
ā Fact Checker Results š
š®š± Tech as Economic Driver: Fact ā Tech contributes 40% of Israelās tax revenue.
š Investor Confidence: True ā Israel still enjoys strong global interest despite instability.
š§āš¤āš§ Underrepresented Groups: Accurate ā Arab and Haredi participation in high-tech remains disproportionately low.
š® Prediction
By 2030, if Israel successfully shifts its innovation policy toward holistic company supportābeyond just R\&Dāand stabilizes its internal political landscape, it could evolve into the world’s leading scale-up nation. However, failure to address these gaps could lead to a talent drain, loss of global investor trust, and stagnation in its tech ecosystem. šš¼š
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Reported By: calcalistechcom_ed85d55f993208d257bdab7d
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