Investment in the Israeli tech industry hit a three-year high amid the country’s multi-front wars, attesting to its resiliency. But one of the country’s most important sources of tax income, Israeli tech employment, faces a slowdown after a decade of continuous growth in the number of workers, according to a new workforce report published Wednesday.

The worrying trend, if it persists, could have far-reaching ramifications for the growth prospects of Israel’s war-battered economy and the transformation of the future employment market around AI, RISE Israel Institute, and research center IVC warned in a joint report.

“After years of rapid employment growth, the last two years have seen an abrupt standstill — driven by global economic headwinds, domestic political uncertainty, and the effects of a protracted war,” said RISE Israel chief economist Assaf Patir. “The most prominent impact of these contrasting trends has been on human capital in high-tech: a sharp increase of 75,000 employees between 2021 and 2022 was followed by an almost complete halt in employment growth over the past two years.”

“With the highest share of high-tech employment in total national employment worldwide, its performance is critically important to the broader economic landscape,” Patir said.

Over the past 22 months, Israeli startups have been grappling with the ongoing........

© The Times of Israel