Rising tech salaries and exchange rate pushing multinationals to reconsider Israeli R&D
"A significant increase in salaries can provide a nice addition to the Israeli tax authorities, but at the same time, it can become a real threat for future investments in Israel," writes Ami Aharonovich of Aerospike
Ami Aharonovich | 11:52 08.07.2021
The Israeli tech economy is going wild. The number of unicorns is peaking, with Israel having today more unicorns than all of Europe together, and the total amount of funds raised for 2021 already at 110% compared to last year, and this only halfway through the year. One of the side-effects of this is the fact that the salaries in the Israeli tech industry are significantly rising. The combination of a relatively low USD-NIS exchange rate along with the rising salaries might turn up to become a real risk for global companies which are highly invested in Israel. The Israeli tech industry is very well known globally for its talented human capital resources, however, there are many brilliant minds out there in the world and some of those can be found in other countries where the cost of employment can be much cheaper compared to that in Israel. Today, there are over 400 R&D and innovation centers in Israel owned by multinational companies and more than 60% of them are U.S.-based corporations.
Ami Aharonovich is the Israel Country Manager of U.S. company Aerospike.