Israel’s High-Tech Sector Grows Through War, Layoffs and AI Disruption
Israel’s high-tech industry is doing something few expected: expanding through war, layoffs, political isolation, a stronger shekel and the rapid spread of artificial intelligence.In this data-rich report, The Media Line’s Keren Setton looks beyond the headlines about job cuts to explain why Israel’s most important growth engine continues to outperform expectations. Figures from the Israel Innovation Authority show that high-tech output rose 8.2% in 2025, capital raising increased 30%, and exits and technology exports reached record levels.The momentum carried into…
Israel's high-tech sector is experiencing unexpected growth despite challenges like war, layoffs, and a strong shekel. According to The Media Line's Keren Setton, data from the Israel Innovation Authority shows an 8.2% rise in high-tech output in 2025, a 30% increase in capital raising, and record levels for exits and technology exports. This momentum continued into 2026, with technology employment surpassing 600,000 in the first quarter, a 7% increase. This growth occurs as companies strategically replace workers with outdated skills with those in research, development, product, and AI roles. Rotem Meitiv-Klein of Experis Israel notes that "more than 40% of Israeli technology companies plan to hire during the coming year." Dr. Sergei Sumkin suggests AI will reshape rather than eliminate jobs, with product roles combining coding, marketing, and business expertise seeing growth. However, the sector still faces pressures from the appreciating shekel, which impacts export earnings, and international boycotts and criticism.
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