Israel's economy is resilient — despite the Hamas attack and its aftermath. Here's why
One of the things Israelis have come to realize in the wake of the horrific Oct. 7 attack is that people have a problem with complexity. After being woken up on a peaceful Saturday morning by sirens announcing a surprise assault, breaking a de facto cease-fire, and slowly learning the dreadful toll of the attack, with over 1,200 killed and 240 kidnapped including babies, women and elderly people, Israelis do not understand how so many people around the world see them as the victimizers and not the victims. Even worse is that Hamas, which showed its true face that morning, is perceived as a freedom-fighting organization.
The reason is that most of us tend to view reality in a simplistic way and avoid dealing with complexity. For those who consider themselves humanists and advocates of progressive and liberal ideals, the underdog is, by definition, the victim. They cannot fathom that the country with the strongest military in the region could be the one being unjustly attacked. For them, the “casualty balance” says it all. It is heartbreaking to see droves of young people across the West supporting a terrorist organization while chanting slogans that actually mean the annihilation of a country and its people.
Another complexity Israelis now face is how to convey to the world the severity of the atrocities that took place, the threat Hamas poses and explain the need for the current military operation Israel is undertaking — all while maintaining a message of “business as usual.” How do we explain that while Hamas is firing rockets indiscriminately at Israel’s population centers, economic activity is continuing relatively uninterrupted thanks to the Iron Dome antimissile system?
Israeli tech keeps going
Israel’s economy is heavily dependent on its tech industry, which accounts for 18% of its GDP and about 50% of its exports. This industry is globally oriented, with most of its customer base and funding sources coming from overseas. Over 450 leading multi-national companies have R&D and innovation activity in Israel.
Their presence in Israel is due to the country’s innovation capabilities and tech talent density — despite any geopolitical or security concerns. It is important to show business continuity to that audience, sending a resounding message that “Israeli tech delivers, no matter what.”
Over the past 30 years, the tech industry has grown tremendously, unhindered by cycles of violence that have taken place. Data from two of the major security events in recent history, the 2006 Lebanon War and Operation Protective Edge in 2014, demonstrate the resilience of the tech industry and its ability not just to withstand the crisis but also to recover quickly.
In the months after the second Lebanon War, 52 companies raised a total of $500 million, including some of Israel’s leading tech companies such as Kaltura, Wix and SolarEdge. The performance of the high-tech industry during and after Operation Protective Edge was similar. About 290 companies raised $1.74 billion, marking a 38% increase from the period leading to the operation and generating Israeli unicorns such as JFrog, ironSource, and Fiverr.
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A familiar pattern of economic resilience
The current conflict, while different in scale, is showing the same pattern of economic resilience. In less than four weeks from the Oct. 7 attack, the stock market started to rise again. The shekel has gained strength compared to the American dollar and Israeli tech stocks traded on Wall Street have now stabilized. In addition, we have seen several significant mergers and acquisitions accompanied by 22 investment rounds, totaling $700 million.
“Lies that life is black and white spoke from my skull,” wrote Bob Dylan, pointing at the naiveté of simplistic worldviews and understanding that, more often than not, there is complexity involved. Life is not black and white and is not a zero-sum game. The fact that one person suffers does not mean the other does not. One can be both strong and a victim at the same time.
By the same token, Israel is at war, but it is not a war zone. It is fighting for its security, but its economy is strong and resilient. We want the world to know and understand that we were hurt severely and support our effort to remove the security threat. But also know that we are strong, and our economy and tech industry are continuing. It is a complex message to convey but an important one.
Hamas’ deadly attack on Oct. 7 has had devastating consequences both to Israelis and Palestinians, with thousands of innocent people hurt on both sides. We can only hope that as we emerge from this cycle of violence, we will better understand the complexity of the reality in which we live and create a better one for all.
Yariv Becher is vice president of innovation diplomacy at Start-Up Nation Central and a former commercial attaché on behalf of Israel’s Ministry of Economy, helping Israeli technology companies access foreign markets.
This article originally appeared on NorthJersey.com: Israel economy: Complex challenges of resilience
