Israel has emerged as a major player in the global tech startup scene, earning its reputation as the Startup Nation. In 2022, Israel’s high-tech companies raised an impressive $14.95 billion through 663 deals. Additionally, Israel invested 4.1% of its GDP into research and development (R&D), double the OECD average, and is ranked second in the world for R&D expenditure per capita.The country’s success can be attributed to various factors.
Israel has established itself as a hub for innovation, hosting R&D centers for major companies like Amazon, Apple, Cisco Systems, Facebook, Google, Microsoft, and more. Israel’s success can be attributed to government programs and tax incentives that support entrepreneurship and innovation. Programs like Yozma, launched in 1983, matched outside venture capital investment in Israeli startups and asked for returns upon successful exits. The country also offers grants, tax incentives, employment aid programs, and intellectual property incentives to foster growth.
Furthermore, Israel’s economic relationships expanded with the signing of the Abraham Accords in 2020, normalizing relations with the United Arab Emirates and Bahrain. This development has extended Israel’s economic reach in the Middle East, potentially creating over 150,000 new jobs and generating more than $1 trillion in economic activity if the accords expand to include 11 nations.