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High-Tech & Technology -
DUN’S
100
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2016/17
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High-Tech Industry Snapshot
(Continues)
a later stage with a higher valuation. The num-
ber of bootstrapping companies amounted to
approx. 1,100, roughly 23% of all start-ups in
the local industry.
A More Mature Industry
A distinct trends in the local industry, over the
past few years, is the increase in the involve-
ment of more experienced entrepreneurs.
In 2010, the number of entrepreneurs who
founded and managed at least two start-up
companies was 16% of the total number of en-
trepreneurs in that year. In 2016, the number
of entrepreneurs who founded and managed
at least two start-up companies increased to
27%. The entrepreneurs’ experience is of a
critical importance to the development of the
High-Tech industry in Israel. Experienced en-
trepreneurs build companies for longer terms,
over the VC cycle. They provide better surviv-
ability and larger extents of fundraising and
they grow more mature companies. There are
more entrepreneurs with personal funds who
can build more mature companies.
The High-Tech Industry’s 10 Leading Cities
One of the catalysts of the High-Tech industry
is the eco-system in which it operates, wheth-
er if it consists of access to investors, to the
academy or to human capital. Approx. 62% of
all tech companies operate In the 10 leading
cities (by no. of tech companies), with Tel-Aviv
leading the list by a large gap, with about 28%
of tech companies. The tech companies in the
10 leading cities raised approx. 80% of the
total industry funding in 2016. The tech com-
panies in Tel-Aviv raised roughly 42% of the
industry’s total funding in 2016. The leading
sectors in the 10 leading cities are Internet,
IT and Enterprise Software and Life Sciences.
The contribution for creating the eco-system
in these cities may also come from attracting
mature tech companies to the city.
The Main Challenge – A Lack of Human
Capital
The lack of skilled human capital, particularly in
the software and the internet sectors, continues
to be the largest challenge of the local industry
- The average annual growth rate of High-tech
jobs in the past three years amounted to approx.
9,000 jobs per year, while the potential annual
growth amounted to approx. 13,000 new jobs.
The demand for human capital comes mainly
from the “roots” – from start-ups and growing
companies, while mature companies have been
streamlining their human resources in recent
years, with large layoffs.
We must reduce the human capital supply-
demand gap in the local industry, through
governmental direction for increasing the num-
ber of high-school graduates who completed the
core studies required for higher technological
education, such as 5 units of Mathematics and
Physics and Chemistry.
80
70
60
50
40
30
20
10
0
Semiconductors
Miscellaneous
Technologies
Life Sciences
IT & Enterprise
Sfotware
Internet
Communications
Cleantech
Leading Companies Distribution by Line of Business
40
60
61
57
54
32
81
400
+6%
350
+4.2% YTY
300
250
200
2016
2015
2010
High-Tech Companies with Over 100
Employees
City
% of the High-Tech
Industry
Number of High-Tech
Companies
Main Line of Business
Tel Aviv
27.61%
1,836
Internet
Herzliya
6.71%
446
IT & Enterprise Software
Jerusalem
5.07%
337
Life Sciences
Haifa
4.36%
290
Life Sciences
Ramat Gan
4.35%
289
Internet
Petah Tikva
4.02%
267
IT & Enterprise Software
Ra’anana
3.32%
221
Internet
Netanya
2.66%
177
Life Sciences
Kfar Saba
2.15%
143
IT & Enterprise Software
Rehovot
2.08%
138
Life Sciences
The High-Tech Industry`s 10 Leading Cities