Israel’s greatest weapon isn’t only its military. It’s its technology.
That’s according to Edouard Cukierman, managing partner of Catalyst Investments and author of the newly updated Israel Valley, which was recently translated into English.“We saw that very clearly during this war with the Iron Dome system,” Cukierman said on a recent ILTV Podcast. “We saw that without the Iron Dome, we probably would have not faced the threat from Iran, from Hezbollah, and even from Hamas. The idea of the Iron Dome is just an illustration of Israeli technology capabilities.”
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Edouard Cukierman
(Maayan Hoffman)
But Israel’s technological strength extends far beyond its defense systems, Cukierman emphasized. The country’s high-tech industry has become another kind of shield, protecting Israel’s economy and fueling its growth.
“Without the high tech industry, the Israeli economy would be very weak,” he said. “It has been the growth engine of the high end of the economy for many, many decades.”
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Cukierman outlined several reasons behind Israel’s success as the “Startup Nation.” Contrary to popular belief, he said it isn’t primarily due to military investment in research and development.
“Rather, the venture industry invests much more funding than the army does in R&D,” he explained. “However, people coming from the army at a very young age gain so much experience — they have to develop solutions quickly, take responsibility for others, and gain a type of experience that in other societies you won’t gain until you are much older.”
Another factor, he said, is Israel’s diversity.
“We’re a melting pot with people coming from all over the world,” he said.
Then there’s Jewish culture itself.
“Jewish culture is very special,” he said. “For example, there is the issue of resilience. You see that today, it has also an impact on the attitude of the entrepreneurs. There is also the Jewish tradition of tikkun olam, to improve the world. When we invest in a biotech company or a med-tech company, the people we invest in, they don’t come to us and say we want to become a unicorn. They typically say, we have developed a technology that can do a major change for people suffering from Alzheimer or from cancer. They want to improve the lives of people.”
Cukierman also connected the idea of freedom — a central theme in Jewish tradition — to Israel’s entrepreneurial spirit.
“Freedom,” he said, “is a concept studied on the Jewish holiday of Passover, and it’s linked to Jewish identity and the Startup Nation culture.”
Still, Israel’s technology shield is showing cracks after two years of war. Cukierman admitted that the country is feeling the strain through its venture funds.
“The amount raised by the venture funds in these last 12 months is about 80% less than the year 2021,” he said. “2021 was a peak, but it has a long-term impact, because today we still enjoy some of the funding available from the funds that were raised in 2021 because we deploy the money over four or five years. Now, what will happen in the coming two or three years?”
He warned that the next few years will be challenging for Israeli investors, especially given the uncertainty surrounding the country’s image and security.
Cukierman also pointed to growing internal gaps.
There are also other ‘cracks’ in Israel’s technology shield, he said, referring to the fast-growing Muslim and ultra-Orthodox communities, which are less engaged in the high-tech sector.
“They have a lot of skills. They can do it. But right now, the leaders of the rabbinic community, the Orthodox community, are very reluctant to enable this community to integrate the Israeli high tech ecosystem,” Cukierman said.
Despite the challenges, he remains optimistic.
“Israel has developed so many great technologies in so many fields over time. Even though it’s a challenging period, it’s also a period of opportunity,” he told ILTV. “When there is a crisis, there is an opportunity. So it’s a good opportunity for international investors, especially investors from the US, to look at opportunities today in Israel — the value of those companies are cheaper… Now is the time to look at opportunities in the market.”
Watch the full podcast interview:
04.10.25 PODCAST EDOUARD CUKIERMAN
(ILTV)
