A year on from the start of the Israel-Hamas war, the Israeli blockchain industry is facing the challenges of widening geopolitical unrest in the region, with some talent “hesitant to consider” roles within its borders.
Despite this, Israeli business leaders who spoke to Cointelegraph were optimistic about the future of the country’s blockchain industry.
An August report from Statista shows 60,000 Israelis had emigrated in the previous 24 months from May. The business statistics platform also noted a 25% increase in emigration from February 2023.
The figures have led to fears about a so-called “brain drain” in the state as emigration outstrips immigration.
In August, Nobel laureate professor of biology Aaron Ciechanover, in a speech delivered at Kibbutz Nir Oz and reported by The Times of Israel, said, “There is a huge wave of departures from the country.”
Ciechanover warned about a shortage of doctors and cited recruitment issues at universities. He added that “as soon as 30,000 of these people leave, we won’t have a country here.”
The blockchain sector is not immune to the vagaries of war. Yaniv Baruch, chief operating officer of Tel Aviv-based GameFi project Playnance, told Cointelegraph, “Recruitment has indeed become more challenging” in the current environment.
“There has been a noticeable decline in job mobility within the tech sector.”
The Times of Israel and The Jewish Independent are among the publications to report a spike in emigration following the October attacks.
Number of citizens who emigrated from Israel in the previous two-year period from June 2017 to May 2024. Source: Statista
“The uncertainty and security concerns have made some professionals hesitant to consider new job opportunities or relocate,” Baruch said.
Taking positive steps
The ongoing conflict is something individual businesses and business owners have no control over, but that doesn’t mean they’ve been passive.
As Baruch told us, “We’ve widened our recruitment reach, going beyond just local hires and embracing remote work.”
In a blockchain industry where many roles are already remote, the increased emphasis on remote workers filling the void is a natural fit.
“This shift [to remote work] lets us access a global pool of talented professionals who can contribute from anywhere in the world,” Baruch said.
“We’ve also made sure to showcase what makes Playnance special — working on the latest blockchain tech and being part of a dynamic, forward-thinking team. It helps us attract passionate people who are excited about making a real impact in fintech and blockchain.”
The personal and political
Increased emigration from Israel in 2023 is a statistical fact, but like many statistics, inferring meaning from the raw data can be a tricky business.
The outbreak of the Israel-Hamas conflict was followed by an immediate uptick in emigration, but some commentators have also credited judicial reforms at the start of the year, which weakened the lawmaking powers of Jewish courts, as another contributory factor.
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There are also a myriad of personal reasons why people choose to relocate. Misha Lederman, head of strategy at FitFi application Sweat Economy, is among the Israeli diaspora in Europe. Lederman stays in Lisbon, where Sweat Economy is headquartered.
Like many emigrants, his reasons for living outside of Israel are personal, not political.
Source: The Jewish Independent
When Cointelegraph spoke to Lederman, he had only the most positive things to say about Israel and its blockchain sector, citing a “startup nation mentality” and “a blend of resilience, innovation, and global thinking, combined with a strong emphasis on education” as particularly important for the country.
Lederman went further, however, explaining why Israel’s military was a key component in its success story.
“The Israeli military’s deep integration into Israeli society plays a critical role in nurturing tech talent, particularly in cybersecurity and cryptography, where Israel has emerged as a global leader,” Lederman said.
“Many tech entrepreneurs are veteran officers from military units of the Israel Defense Forces, specifically stemming from the army’s cybersecurity units, which have been a breeding ground for top-tier blockchain and Web3 innovators,” he added.
A mood of optimism persists
Looking at the future of the Israeli blockchain industry, both Baruch and Lederman are positive.
“I’m highly optimistic about the future of blockchain in Israel,” said Baruch. “Despite current challenges, our country remains a global development leader. Israel has one of the highest concentrations of startups per capita, with over 6,000 startups operating across various tech sectors. Such a vibrant ecosystem feeds the culture of entrepreneurship and creativity ideal for the growth of blockchain technology.”
In a June study of the most attractive regions for startups, Startup Genome listed Tel Aviv as the fourth-best in the world, behind Silicon Valley, New York and London. Remarkably, this was one place higher than the previous year.
On the other hand, Israel’s economy is undoubtedly feeling the strain. Growth has slowed, and debt is rising. On Oct. 1, the S&P 500 downgraded Israel’s credit rating from A+ to A.
Even against this challenging macroeconomic backdrop, Lederman points to data that indicates Israel remains a vital player in the blockchain sector.
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“Although Israel’s population is just 9 million in 2024, it contributes a remarkable 4.5% of global Web3 venture capital funding, demonstrating its outsized influence,” he said, referencing a September Crunchbase report.
“Israel’s blockchain applications are cutting-edge, allowing it to pioneer new technologies and lead in Web3 advancements, positioning it as a key player in the global crypto landscape,” Lederman added.
“Other nations can learn from Israel’s collaborative, entrepreneurial ecosystem, its emphasis on military-civilian tech integration, and its focus on cybersecurity — a crucial component in blockchain and Web3 development.”