The Israeli economy is an unusual place. On one hand, after years of unparalleled growth the high-tech sector has come to a screeching halt. New investment has tanked and some of the Unicorns have found their values cut in half or more. This decline could be a short term phenomena, but it could represent a major shift. I believe if the judicial overhaul is halted the investment downturn will be a short-term circumstance, and the overall strengths, particularly the talent that fueled Israel’s previous phenomenal growth will reassert themselves.
The economic sector where there has been no slowdown is the defense industries. Since the start of the Russia-Ukraine war, orders for Israeli arms have been pouring in. With Europe rearming, and NATO members actually planning to reach the 2% of GNP, there is a large market for Israeli defense products. The only negative is that Defense products require physical manufacturing, so the value-added and profit is not anything like the software industry. It does however provide good paying jobs to people who would not easily find their way to the high tech world.
