More than 80 representatives of the Israeli hi-tech sector visited Albania this week to scope out possible new territory for growth abroad, according to a recent Army Radio report.
The conference they attended was planned far in advance, before the outbreak of Israel’s current political tumult; however, the number of Israeli attendees skyrocketed in recent weeks as the nation has struggled to come to a unified conclusion on how to handle the issue of judicial reform.
Ori Hadomi, former CEO of Mazor Robotics and current hi-tech entrepreneur, told Army Radio that he has been fielding calls from various international business organizations wanting to move large swaths of the Israeli hi-tech sector to their home turf.
“I didn’t enter into this [situation] with [other] nations myself – the other countries approached us,” he said. He emphasized that he is not in the position of “shopping” for a place to relocate hi-tech.
“European countries..recognize that there will be an exit in the coming months or years…Many people will want to leave [Israel] for other places,” he said. “There is an opportunity to [bring over] organizations and groups, and actually to [re]settle them in an organized, organic way.”
Hadomi avoided naming specific countries, but Greece and Albania have shown interest in Israeli hi-tech publicly and he implied that other European countries were acting similarly. They are offering tax benefits and other incentives for Israeli families and businesses to transplant themselves onto foreign soil.
He also predicted that “if [the judicial reform] happens, [other countries] will come to us with very nice offers,” and take their pick of the Israeli workforce. He estimated that, in the event his prediction comes true, thousands of families will pick up and move abroad.
“It is a very real and present danger,” warned Hadomi. “In my opinion, this a destruction of Israel’s economic, social and liberal ecosystem…If we needed another sign of how the current situation is dangerous and risky – I’m raising this flag.”
Hadomi concluded by restating that he is not personally making the connections between foreign entities and Israeli companies; rather, he is warning that if Israel continues on its current path, foreign business organizations will approach Israelis with attractive offers and they will have to choose for themselves. “None of the people working in Israel, no company and no organization, would actively choose to leave on their own. There is no replacement [for Israel’s environment, with its] informality and family atmosphere.”
But, he warned, if the atmosphere becomes one of religious fundamentalism and racism, the State of Israel does not stand much of a chance of keeping its current volume of high-tech employees.
Optimistic in Albania
Itai Melchior, vice president of business development at the Israeli cyber security company Gold N’Links, also spoke with Army Radio about the hi-tech crisis. He called in from Albania, where he was one of the organizers of the recent conference attended by dozens of Israeli tech representatives, as well as high-ranking members of the Albanian government.
He took a less ominous tone than Hadomi, as a person already living and working for an Israeli company in Albania. Melchior told Army Radio that the number of Israeli conference participants shot up in the last few weeks. Planning and organizing for the conference began well before the Israeli government began its current tumultuous judicial reform process.
Melchior also mentioned that one goal of the conference, and one reason that he worked so closely with the Albanian government in planning it, was to dispel Israelis’ preconceived notions about Albania as a dreary post-Soviet place. He wanted to showcase Albania’s openness and receptiveness to new markets. “Albania is not what you thought,” he said.
He added that the Israeli conference participants were more interested in Albanian business ventures than he had originally expected, likely because of the situation back home.
The hi-tech sector and the judicial reform protests
The hi-tech sector’s primary fear revolves around the judicial reform’s effect on Israel’s sovereign credit rating and reputation among foreign investors, as it would directly undermine the system of checks and balances within Israel’s government, thus increasing the inherent risk in investing in the country’s economy.
Israeli hi-tech represents about a quarter of the State’s economy and over half of its exports, and it relies heavily on foreign direct investment. Experts have warned that harming the sector’s investments may result in the flight of Israel’s hi-tech companies to other countries which would make them more viable to investors.
Already several global financial organizations — including JPMorgan and S&P — have issued statements highlighting the increased investment risk posed by the judicial overhaul, and there have been several instances of Israeli tech companies — such as Papaya Global and Disruptive Technologies Venture Capital — pulling out of Israel’s economy.
Zachy Hennessey contributed to this report.
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