Jerusalem is usually thought of as a city with rich history and culture, comprised of old neighborhoods, narrow passageways and exotic fragrances. One might not expect that alongside its rich history and culture, Jerusalem has evolved in recent years and has become a magnet for entrepreneurial activity and cutting-edge innovation.
According to Start Up Nation Central, there are currently 405 active companies in the Jerusalem ecosystem, a 102% growth since 2012. In 2019 alone, $233.5M were invested in Jerusalem-based companies and start-ups, a 21% increase from the year prior.
While most Jerusalem-based companies are considered "small-medium" with 92% of them having under 50 employees, many of Israel’s largest tech exits originated in Jerusalem. The best example of this is Intel’s acquisition of the Jerusalem-based company Mobileye for $15 billion.
"This proves there are ecosystems developed outside of Israel’s Center that can function, prosper, and be part of the economic growth in Israel's periphery," says Wendy Singer, Executive Director at Start-Up Nation Central.
There are several factors that help prosper a culture of innovation and success in Jerusalem. First, is the city's diverse population – secular and religious, Jews and non-Jews, men and women, Israeli-born and new immigrants. Diversity and inclusion are two values highly cherished by technology companies around the world, understanding that the more diverse team a team is, the more diverse ideas are conceived. It should come as no surprise that diverse companies perform better. Drawing on the city’s diverse demographic makeup, there has been a movement to train and integrate the Israeli Arab and ultra-Orthodox communities into the tech sector, thereby creating an innovative model being studied by foundations and governments in other countries.
Second, is the presence of world-ranked academic institutions like the Hebrew University for Life Sciences and Computer Sciences, and Bezalel Academy for Arts and Design or Hadassah College. There is a strong leaning in the city towards the Life-Sciences, of which Jerusalem’s students constitute over a quarter of all students in Israel studying this field. The nexus point between technology, design, and science, results in great creativity and human capital, attracting the eyes of global audiences.
Last, is the coalition of government, NGOs and academic players who have committed themselves to supporting and strengthening the tech sector, including Start-Up Nation Central. The city's tech ecosystem keeps growing and making connections with the support of such entities, helping companies to make great connections, hosting events, and promoting innovation and collaboration, as well as innovation hubs, entrepreneurship programs and accelerators.
Out of the 405 companies, two fields of expertise are more prominent than others – Life Sciences and Artificial Intelligence. The Jerusalem-based Life Sciences and Bio-Tech companies are groundbreaking on an international level, especially in light of COVID-19. Startup Genome Ecosystem Report for 2019 ranks Jerusalem 8th in the world in number of companies in this field (together with Tel Aviv). "Jerusalem's tech sector has not only grown dramatically in the past eight years but can serve as a model for an emerging global tech hub," Singer said.
Besides the significant research taking place at the Hebrew University of Jerusalem and various companies in the local ecosystem joining the global effort in converting their technologies to better suit the current crisis, it's worth mentioning the Shaare Zedek Hospital.The hospital has sampled more than 2500 COVID-19 patients, establishing Biobank - the country's largest COVID-19 database that allows researchers to characterize the disease, identify complications, find novel diagnostic methods, vaccines and even contribute to testing new treatments. More than 65 coronavirus studies have already been performed at the hospital.
"During COVID-19 the sheer amount of Corona Tech solutions coming out of Jerusalem further embedded the global standing of the city's Bio-Tech sector" Singer added. "If you layer the strength of the city's Life Sciences ecosystem over Israeli's relentless problem-solving gene, it's not hard to imagine that technologies born here are going to be picked up elsewhere."