How the Gaza War and the Rise of Artificial Intelligence Affected the Israeli Technology Sector?

SadaNews - The Israeli technology sector, which is the main driver of the economy, is experiencing a very difficult period due to the war on Gaza and the rapid increase in the use of artificial intelligence, according to a study published today, Sunday, by the Taub Center for Social Policy Studies, part of which was reported by the Jerusalem Post.

The study revealed an increase in unemployment among workers in the technology sector, a decrease in the number of job vacancies, and a widening of social and geographical disparities. The main reasons attributed to this situation, according to the researchers, are the effects of the war and the accelerated use of artificial intelligence.

According to the data, the number of workers in the Israeli technology sector increased by nearly 60% between 2014 and 2023, which translates to an increase of about 150,000 employees, most of whom are in research and development. Wages have significantly increased and remain much higher than the economic average; however, the sector has suffered since the outbreak of the war.

Unemployment in the Technology Sector

The unemployment rate in the Israeli technology sector has risen above the economic average, following a sharp decline in job vacancies in 2024, particularly for young and less experienced workers, a trend referred to as the "youth crisis."

The study is based on a comprehensive analysis of labor force survey data for the period 2023-2024, conducted by the Central Bureau of Statistics, which addresses the labor market for individuals aged 25 to 64 years.

According to the Jerusalem Post, the researchers examined the employment status of various demographic groups of workers, unemployed individuals, and job seekers, considering demographic variables such as gender, sector, and place of residence.

Impact of Artificial Intelligence

The study included indicators of exposure to artificial intelligence to assess its ability to perform routine tasks across different jobs, in order to estimate the level of risk of workers being replaced by automation.

The study highlights wide employment disparities, as nearly 25% of non-Haredi Jewish men work in the advanced technology sector, compared to only about 12% of non-Haredi Jewish women.

In the Haredi community, less than 10% work in this sector, and in the Arab community, less than 5%.

Geographically, most regions have seen a decline in employment, especially in the north, the Sea of Galilee, and Safed, while Jerusalem and the Jezreel Valley experienced a slight increase. Tel Aviv remains at the forefront of the sector in terms of employment, along with Petah Tikva, Haifa, and Rehovot.

Professor Gil Epstein, one of the authors of the study, wrote that "the application of artificial intelligence and the acceleration of automation are transforming the face of employment in tech industries," noting a noticeable decline in the number of workers in support jobs alongside an increase in their wages.

Source: Jerusalem Post