A high-ranking official from Microsoft Israel has expressed worry about the future of Israel’s thriving high-tech sector, citing concerns related to the ongoing conflict between Israel and the Hamas Islamist group. He cautioned that multinational corporations might decide to cease their research and development activities in the region.
Tomer Simon, who serves as the Chief Scientist at Microsoft Israel’s Research and Development Center, revealed that he conveyed his apprehensions through a formal letter addressed to Tzachi Hanegbi, the Head of Israel’s National Security Council. However, Mr. Simon mentioned that he had not yet received a response to his communication.
As a result, Simon published his letter in the Calcalist financial daily on Wednesday, saying it was his personal opinion and not on behalf of Microsoft, one of hundreds of multinationals operating in Israel.
“The country must create a positive horizon so that multinational companies continue to grow,” Simon said, noting that for every tech job, there were five more created that drive Israel’s economy.
“There is a great danger here. Israel cannot return to just producing oranges. Without high-tech we will return to being a third-world economy.”
The prime minister’s office did not immediately comment to Reuters.
Simon, who also acknowledged the human cost of the war, called on leaders to send a clear message to international partners and the global business community that Israel was committed to a prosperous and stable future.
Hundreds of thousands of army reservists have been called up, leaving a gaping hole in manpower and disrupting supply chains from seaports to supermarkets.
“The war has created a substantial vacuum in the workforce of the high-tech sector. This scenario is especially noticeable in multinational corporations located in Israel, where the percentage of employees recruited to the reserves is significantly higher than the national average,” Simon said.
Simon did not cite figures but the government has estimated as much as 15% of tech workers were called to military service.
He said their absence harms both current projects and “sends a worrying message to their global headquarters about the reliability and stability of their Israeli operations, and of Israel in general”.
Simon also pointed to the preceding 10 months of political turmoil amid a judicial overhaul plan that harmed foreign investments and led to a few R&D closures.
He cautioned that “multinational companies may freeze or reduce their investments after the conflict, and even to close their R&D activities here” which would carry harmful results for Israel’s economy and the “future of innovation, weaken our global position and undermine our internal stability even more”.