Start-Up Nation Central: Tech is the engine that will pull the Israeli economy out of the Covid-19 crisis

“The Covid-19 pandemic has given us the opportunity to reimagine the relationship between Israeli high-tech and the rest of the economy. Three avenues should be the first stepping stones on this path: 1. Investments: directing Israeli savers’ money to the high-tech sector. 2. Strengthening tech companies’ efforts to hire underrepresented populations. 3. Connecting traditional Israeli businesses to advanced tech solutions. All of these solutions can result in a new equilibrium that is mutually beneficial for Israeli high-tech and the rest of society”.

These are the main conclusions emerging from the new report “The New Digital Age: From a Health Crisis to Economic Opportunities for Israel” written by analysts from Tel Aviv-based non-profit organization Start-Up Nation Central. In the paper, the organization outlines the forces that will shape this transition and highlight the local and global opportunities this new digital age presents for the Israeli tech sector, and the different ways in which to capitalize on these opportunities.

According to the report, Covid-19 could be the pivotal moment heralding the true beginning of the digital age. “As the world quickly adapts to the new reality — technologically and, equally important, psychologically and socially — we may find ourselves reaching a new digital equilibrium in which moving more digital bits and fewer people and goods will be the ‘new normal.’

“This accelerated digitization will be reinforced by an increased need for self-sufficiency, resilience and efficiency, elements high on the agendas of countries and companies alike. Rather than standing back and watching as this ‘new normal’ unveils, forward-looking nations, industries, companies and individuals should leverage the digital opportunities generated by the crisis in order to emerge stronger and more resilient.”

Start-Up Nation Central is an independent nonprofit organization that builds bridges to Israeli innovation. The report argues that Israel’s society and economy in general — and its tech sector in particular — should view the Covid-19 pandemic as an opportunity. It also outlines the forces that will shape this transition and highlights the local and global opportunities this new digital age presents for the Israeli tech sector, and the different ways in which to capitalize on these opportunities.

According to the report, over the past decade, the world has experienced a huge increase in the applications of Artificial Intelligence (AI), Augmented Reality (AR), Autonomous Technologies, Big Data and Internet of Things (IoT). Yet the Israeli tech ecosystem is particularly strong in a variety of technologies that will become even more important in the post-pandemic era. “We analyzed nine major sectors where these technologies are applied in terms of their current capabilities and strength, as well as expected growth in future demand. We argue that five leading Israeli sectors – Cybersecurity, Digital Health, FinTech, Industry 4.0, and AgriFood-tech – are very well positioned to see an increase in demand in the new digital age."

“The Israeli tech industry is the country’s most productive sector, playing a more significant role in the economy than in any other country. Over the years, however, the sector has gradually become detached from the mainstream Israeli economy. This is a dangerous path and a threat to the sector’s sustainability and to the Israeli economy that depends on it heavily.

“In the dawn of the post-pandemic new digital age, pairing the pressing needs of Israeli society with the strength of its tech engine can result in unparalleled achievements. Israel can transcend its “Start-Up Nation” status and become the leading nation in providing its citizens – and ultimately the world – with cutting-edge digital solutions in health, education, and welfare. All sectors should direct their efforts toward designing and then implementing this vision”, the document concludes.