Israeli technology is the best in the world - It's time to prioritize it in government procurement

Despite the countless times that Israeli companies have proven their technological leadership, there is still no declared government policy to encourage the purchase of technological services and products from these companies. While Israeli defense companies receive purchase orders from the local government, Israeli software companies, which are very successful in the local and international business markets and sell their products to foreign governments and giant companies around the world, do not receive a similar opportunity.

In my role, I meet with dozens of small and medium-sized Israeli companies that have amazing technology at the forefront of global research and development, and we are exploring collaborations with some of them. In each meeting, the issue of government procurement comes up, and specifically, how is it possible that governments around the world are interested in and purchasing Israeli technology while the Israeli government is not? There is silence in the room, and after a few speculations, we continue the discussion.

Sagive Greenspan.

In countries around the world, there is declared government support for local companies. As a current example, let's look at the U.S. and the Gaza War. U.S. President Joe Biden provided a very generous aid package to Israel for defense purchases, but effectively conditioned it on purchases from American companies only. Biden's stated goal is that for every dollar that goes out for aid to Israel, at least half of it will go back to the American economy, so in effect, only half of the amount will be spent outside the U.S. It is apparent that when the government purchases from Israeli companies, a large part of that purchase goes back to the government in taxes and increased employment.

To understand the enormous potential of the government technology market, just look at the Nimbus cloud project. A project that brought the world's largest technology companies, including Microsoft, Cisco, Amazon, and Google, to put forward endless resources and means in order to win the tender to provide cloud services. The global giants competed for the local government procurement because they see it as a strategic asset. It is clear that the decision of the Israeli government to implement Israeli technologies is not only a business goal for the companies, but also a strategic move for the country. Integrating and promoting the purchase of Israeli technology will support the high-tech industry and the Israeli technological ecosystem will enjoy significant added value.

Despite the difficult crisis that the industry is going through, the Israeli startup nation is today at a more advanced stage of maturity than in the past. If in past years, many successful companies were sold to foreign technology giants, in recent years we have seen more and more Israeli companies refusing very generous financial offers, while their value reaching billions of dollars.

There is no doubt that one way to help these companies develop is through the encouragement of local government procurement. Especially now, against the backdrop of Moody's downgrade of Israel's credit rating and the future implications of this, such a move would be a clear signal from the government and an expression of confidence in the technological strength of the local market.

In addition, the preference for “blue-and-white” procurement will greatly encourage the establishment of new companies. These companies have not, until now, taken the local government market into account as a significant target for growth, and it is possible that promoting this move will lead them to recalculate their course.

Government confidence in high-tech will lead to a new wave of investments

The term “blue-and-white” must also take root in the technology market, not only in the field of fruits, vegetables, and food. We are currently in one of the most challenging periods in the country. A period in which the government must take significant steps to strengthen the economy and empower the local market. This is the time to adopt creative solutions.

At the beginning of last November, Knesset member, Michael Biton, submitted a bill that aims to prioritize Israeli procurement, a proposal that was signed by 45 Knesset members, but it is still unclear whether it will be promoted and will also include the technology sector.

This is the time for the Israeli Innovation Authority and Minister of Science and Technology Ophir Akunis to launch a campaign to promote the purchase of blue-and-white technologies by government bodies in Israel. Government officials often boast about Israel's technological achievements, and now more than ever, they have the greatest opportunity to give the necessary momentum to many Israeli companies. This is the time for government bodies to change the equation and promote a move in the right direction, which will somewhat restore the lost trust in the government.

The writer is the CEO of Priority.