Israeli Innovation Authority Chair Reports Over 50% Surge in Startup Support Requests
Dr. Alon Stoppel, Chair of the Israeli Innovation Authority, highlighted the critical role of Israel's high-tech sector at the National Economic Conference hosted by Calcalist, Bank Leumi, and Clal. He noted that 11.3% of Israel's workforce is employed in high-tech, contributing 25% to 30% of income tax revenues, about 18% of the national GDP, and nearly 58% of exports. This sector is a major driver of the country's economic growth and living standards.
Stoppel reported a record year for exits, including major cybersecurity deals with Palo Alto and CyberArk, and Israel ranking fourth globally in the number of unicorn companies valued over $1 billion. Additionally, 35 multinational corporations established new R&D centers in Israel this year. However, he acknowledged a global decline in new startup formations due to technology convergence and the need for more skilled labor.
Despite this trend, the Innovation Authority is witnessing a reversal in 2024-2025, with a more than 50% increase in entrepreneurs applying for support. Stoppel identified three transformative technological forces reshaping the market: the AI revolution, with over 25% of approximately 9,000 Israeli companies citing AI as their core technology; the DeepTech revolution, where Israel ranks second worldwide with 1,500 companies and 36% of recent investment capital; and the geopolitical race driving massive government investments in chip manufacturing and quantum computing infrastructure.
To address these challenges, the Innovation Authority focuses on three main areas: venture creation, building technological and scientific infrastructure for applied research, and adapting regulation and taxation. Stoppel emphasized that innovation is both a national and security interest, noting a 1.6 billion shekel investment to support the market amid challenges like currency fluctuations.
Finally, Stoppel stressed the importance of expanding high-tech beyond the Tel Aviv metropolitan area to Israel's periphery. He argued that sustainable social and employment impact requires attracting major companies such as Intel and Nvidia to build infrastructure and broad industrial technological activities outside the central region, thereby reducing social gaps and ensuring continued economic leadership by the high-tech sector.
