69% of startups say R&D is down, IIA and IATI survey paints grim pictures for Israeli tech
The survey from July 2020 better shows some of Covid-19’s impact on the tech sector
Sixty nine percent of survey participants reported that the research and development processes in their companies were slowing down or have stopped completely. When recording challenges faced with long term durability as a whole, 45% of all startups suggested their companies cannot maintain the change in operations for longer than six months and would require further funding.
Sales also suffered significantly due to the cash crunch brought about by the pandemic. Sixty percent of the companies surveyed that are in the sales stage reporte significant impact (more than 25%) to sales volume.
“The current survey, based on an extensive sample of high-tech companies in Israel, indicates highly problematic trends in the Israeli high-tech sector, which should serve as a warning sign for decision makers,” said Karin Meir Rubenstein, the CEO and President of Israel Advanced Technology Industries (IATI) an umbrella organization representing the tech industry. “The situation it depicts is grim and more problematic than we previously envisioned at this stage of the crisis.”
It’s not all bad news for Startup Nation, however. Data published by the Israel Tech Funding Report (IVC) showed that even though there was a decrease in size and number of investment rounds at the start of the crisis, there has been a spike in investment in recent months. The survey suggests that part of the uptick was due to national government assistance which matches a similar trend in global capital markets - mainly the U.S. equity market.
The survey was conducted by the Israel Innovation Authority and IATI (Israel Advanced Technology Industries) and included 825 companies; 46% in software, 38% in healthcare, and 16% in hardware and communication.