Mind the Tech NY 2024Bank Leumi CEO: "After the war, more than ever before, high-tech will be the engine of Israel's reconstruction"
Mind the Tech NY 2024
Bank Leumi CEO: "After the war, more than ever before, high-tech will be the engine of Israel's reconstruction"
Hanan Friedman said at Calcalist and Bank Leumi's Mind the Tech conference that "Israeli high-tech will become even more creative and more groundbreaking, as a result of the events we experienced. The source of Israeli innovation, which gave rise to the Startup Nation, generates from the Israeli security forces."
Hanan Friedman
(Elad Gershgoren)
"After the war, more than ever before, high-tech will be the engine of Israel's reconstruction," said Hanan Friedman, CEO of Bank Leumi, at the Mind the Tech conference in New York taking place for the sixth year.
"Despite these hard times, arriving here today represents the Israeli spirit, the Israeli strength to overcome any challenge, as this generation of soldiers have also proven.
"Am Israel Chai - the people of Israel have emerged stronger from the terrible crisis we went through - and Israeli high-tech will become even more creative and more groundbreaking, as a result of the events we experienced. The source of Israeli innovation, which gave rise to the Startup Nation, generates from the Israeli security forces. The challenges that the security forces have had to overcome, since the beginning of the war, and the amount of innovation that is being applied - at an unbelievable pace - give me the confidence that this terrible disaster will lead to a huge leap forward, in terms of Israeli tech capabilities. I'm optimistic that these will be quickly implemented once the war ends, serving as the main driver for the strong rebound that the Israeli economy is expected to make.
"Having said that, there is still a long way to go. It’s clear that there are many challenges to overcome, which are dramatically affected by global macroeconomic conditions, in general - and in Israel, in particular. 2023 ended with a continued slowdown of the global growth rate, which was down to about 2.8%. In 2024, global growth is also expected to be relatively low - about 3%, somewhat lower than the average rate during pre-Covid years. However, in the US, GDP growth in the fourth quarter of 2023 was much higher than expected, reaching 3.3%.
"As for Israel, the effects of the war are already reflected in the economy - as seen, for example, by Moody's downgrading of Israel's credit rating. Economic activity expanded in the first three quarters of 2023 - at a slower pace than its potential. In the fourth quarter of 2023, the decline in economic activity was directly affected by the war. The steep rise in defense expenses, the evacuation of the residents from their homes and the government-paid temporary housing solutions for them, as well as the extensive recruitment of IDF reserves - have made their dent on the Israeli economy.
"On the bright side, according to 2023 data, seed fundraising - which serves as an indication for investors' confidence in newly founded companies and their growth potential - look promising. We are happy to report that seed rounds in the fourth quarter of 2023 climbed to about 250 Million dollars, about 30% more than in the second quarter of 2023. This is high, even when taking a historical perspective of the past decade.
"I have no doubt - and I’m sure most of you will agree with me - that the Israeli high-tech industry will be affected in 2024, not only by the development of macroeconomic conditions in Israel and worldwide, but will also be dramatically affected by the war. The question is to what extent.
"As I have already mentioned, I believe that the war, and the way in which the high-tech generation is coping with the challenges, will give a significant boost to the tech industry.
"At the previous Mind the Tech Conference, I said that nothing can stop the Israeli spirit. The innovation-based initiatives I have come across in the past few months, since the outbreak of the war, inspire me and give me confidence that we are at the beginning of a significant positive trend for the Israeli tech.
"A tangible example of this I can see from the process that has happened in recent weeks at "The Garage". This is the unique fund in which we serve as lead investors, together with Valley Bank and the BRM fund. So far, Omer Shidan and Eyal, the founders of The Garage, who themselves served in special IDF units in the war - have invested in several companies. The technologies developed by some of these companies have already been implemented in Leumi's and Valley’s systems and created an important impact.
"Since the war, the phrase 'Together we will prevail’ has become a national slogan. And rightly so. I want to expand on this slogan: 'Together we will initiate - and together we will win'. Because it's only the Israeli entrepreneurial spirit that has the power to keep the tech industry as the engine propelling the Israeli economy and Israeli society forward."
Watch his full remarks in the video above.
