The Israeli tech sector, crucial to the nation's economy, contributes approximately 20% to the country's output and generates 25% of income taxes.

Despite its importance, high-tech companies have raised $7.8 billion in investments this year, reflecting a four percent decrease from the previous year.

The ongoing conflict has led to significant challenges, with 24% of surveyed companies relocating operations outside Israel due to funding uncertainty and staff shortages caused by reservist call-ups.

Since the onset of the war in Gaza in October 2023, 49% of Israeli high-tech companies have reported losing investments.

Concerns are widespread, with over 80% of companies and 74% of investors doubting the Israeli government's capability to support the tech sector's recovery.

Avi Hasson, CEO of Startup Nation Central, emphasized the need for government action to stabilize the business environment, particularly through passing a responsible budget.

A recent survey revealed that 49% of tech startups experienced investment cancellations, and only 31% are confident in their ability to raise capital next year.

Hasson also warned that the prolonged conflict could hinder Israel's tech industry's competitiveness and potentially lead to the closure of non-defense-related startups.

The ongoing war has prompted companies to rethink their operational strategies, with one-third of surveyed tech firms considering shifting some operations outside Israel.

In the northern region, which houses 69% of high-tech companies, only 45% are fully operational, and 41% of tech firms have relocated activities to central Israel.

The conflict has also impacted Israel's credit rating, with Fitch downgrading it from 'A+' to 'A' due to heightened geopolitical risks.

The humanitarian toll of the conflict is severe, with reports indicating over 41,000 Palestinian deaths and significant displacement in Gaza.