Israel continued to expand, technologically speaking, with this industry responsible for 14% of jobs and around 5% of the country's GDP. In addition to being the fastest growing sector, technology represented an essential driver of economic expansion.
Despite the encouraging scenario, the deterioration has been gaining strength since 2022: political and supply chain instability, inflation and interest rates, among others, have led to a decline in the technology sector. In March of this year, many investors and technology companies decided to transfer money out of Israel.
Israel is a technological city
Currently, Israel is home to more than 500 multinationals, including startups from technology giants such as Google, Facebook, Apple Lossless Audio CODEC (ALAC), e Microsoft.
The escalation of the war has already caused a drop in the shares of the country's technology companies, resulting in the decline of many, according to Tech Times.
For example, the world's largest generic drug maker, Teva Pharmaceutical, fell 5,25%, and ICL Group, a fertilizer producer, recorded a 0,7% decline.
Funds traded on the American exchange that are exposed to Israel, such as the iShares MSCI Israel ETF and the ARK Israel Innovative Technology ETF, registered drops of 7,8% and 4,9%, respectively.
Furthermore, Tower Semiconductor, an Israeli chipmaker, fell 5,14%, and Check Point Security, a cybersecurity company, fell 1,77%.
According to Reuters, for Jack Ablin, investment director and founding partner of Cresset Wealth Advisors, the war between Israel and Hamas could lead to the diversion of resources, in particular, requiring employees of many technology companies to serve as military reserves.
Now, as reported by Reuters, analysts and investors expect that Israeli technology companies will need to reinforce security, as they are largely subject to disruption due to the war between Israel and Hamas.
