High-tech companies are responsible for 43% of Israeli exports - Number of start-ups declined by 70%


by Ifi Reporter Category:Start Up Jun 15, 2021

The Innovation Authority's report shows that Israeli high-tech workers, who constitute about 10% of the employees in the economy, are responsible for about sixty percent of the income tax receipts from employees in Israel.
According to the report, the high-tech companies are responsible for 43% of Israeli exports and 40% of the value of the companies in the Tel Aviv 35 index of the large companies on the Tel Aviv Stock Exchange. The employees of the R&D centers of the multinational companies in Israel are relatively responsible for tax payments that are six times larger than their share among employees in Israel.
The year of the Corona 2020, brought with it extraordinary economic and health challenges. Israeli high-tech entered the crisis strong and stable and dealt with the shocks of the crisis.

The Innovation Authority's report presents, among other things, the opportunities that the high-tech industry has to contribute to the recovery of the Israeli economy through accelerating digital transformation, its diverse and multiple strengths, as well as the main challenges inherent in the worlds of finance and human capital.
The report shows that Israeli high-tech has managed to demonstrate high resilience to the effects of the corona crisis. This is due to the industry's ability to respond quickly to the new work environment and conditions of uncertainty. Into 2020 and 2021, the industry demonstrated growth in economic indices.
The capital raised by Israeli startups has more than quadrupled in a decade, and in 2020 amounted to $ 11.5 billion, 20% higher than the total fundraising in 2019. The size of the average capital raising rounds has increased by 10% compared to 2019, and most of the growth in investments is in the amounts that startups raise in the advanced stages: some in unprecedented amounts of hundreds of millions of dollars in each investment round.
In just five years, Israeli high-tech was enough to double sevenfold in the number of huge investments in excess of $ 100 million. From three investments in 2015, to 20 investments in the amount of more than $ 100 million during 2020. Also, in the first quarter of 2021 alone, 20 investment rounds of more than $ 100 million were closed.
High-tech exports are steadily growing, reaching $ 50 billion in 2020, more than 40% of total exports. Compared to 2019, the number of issuances in 2020 of Israeli technology companies increased by more than 50%.
The number of IPOs of Israeli startups, which are growing and maintaining their independence, reached a peak in 2020 of the first 31 IPOs of Israeli companies, mainly on the Wall Street and Tel Aviv stock exchanges.
In 2020, only four new R&D centers of multinational companies in Israel were opened, which are usually established as part of acquisitions and mergers. This is part of the industry's maturation and the growth of startups that maintain their independence. , And their share of the total high-tech cake is preserved.
Contrary to the image of high-tech as a young industry, there has been an increase in the average age of workers in the industry, which has become higher than the average age of workers in the economy as a whole. The average age in 2019 was 40.1, compared to the average working age in the economy which was 39.6.
Alongside the gratifying data, there are also alarming data from the report: in recent years, there has been a significant decrease in the index that examines the number of new start-ups that arise each year. Only five years have led to a drop in the number of new startups in Israel. - 850 new companies in 2019 and an estimated amount of about 520 new start-ups during 2020.
This figure represents a severe drop of almost 70% in the number of new start-ups opening every year compared to 2014.
One in four students in Israel is studying for a bachelor's degree in technological engineering or computer science. In 2030, more than 20-25,000 employees with limited or completely inexperienced employees are expected to join the high-tech industry each year, while according to the Innovation Authority's human capital report with SNC, conducted before the epidemic, only about 45% of companies declare Because they absorb juniors.
Competition for human resources in high-tech continued during the Corona epidemic, and the shortage of experienced workers that high-tech companies are interested in recruiting still exists and stands at about 13,000 job vacancies in the industry, compared to about 19,000 in 2019. In order to deal with the problem, so that new graduates will not be left jobless, high-tech employers, including adult Israeli start-ups, will be required to open channels for the absorption and training of inexperienced workers.
The Innovation Authority 2021 report reflects what appears to be the maturation of the Israeli high-tech industry. More and more Israeli start-ups are choosing to maintain their independence and grow as a whole, employing a large number of employees and leading significant business activities around the world.

The capital raised by Israeli start-ups in the mature stages is growing sharply, as mentioned, with more than 20 capital raising of more than $ 100 million in the first quarter of 2021 alone.
According to Dr. Ami Applebaum, Chairman of the Innovation Authority, "The impact of high-tech on the immunity of the Israeli economy requires Israel to ensure the continued prosperity of the industry: the number of new startups emerging each year decreases sharply, the amount of investment rounds shifts and budgets invested in R&D By the government are declining year on year and dramatically lower compared to the countries of the world. The state must continue to act in order to bring about a firm confrontation with the essential challenges facing the industry.



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