What oil was to the 20th century, technology is to the 21st. Power today is shaped by computing, connectivity and the ability to build and secure the digital infrastructure the world depends on.

As Israel marks 77 years of independence, this moment calls for more than reflection. It calls for strategy. In a world shaped by volatility and competition, technology defines strength. Talent, chips, data capabilities, and AI systems are now the foundations of national resilience and international relevance.

Israel’s innovation economy was built through urgency. It emerged in a setting of constraint and grew through resilience and focus. That foundation gives us a strategic advantage. But staying ahead means shifting from improvisation to execution. It means evolving from being relevant to being essential.

Few sectors highlight this moment better than semiconductors. Chips power almost everything we rely on, from medical systems to defense platforms. Countries like the United States, South Korea, India, and Taiwan are shaping economic policy around semiconductors to protect their interests. Israel plays a unique role. Over 30 global semiconductor companies run R&D centers here. Intel employs more than 12,000 people locally. Around 15 percent of NVIDIA’s global workforce is in Israel. Our strength lies in architecture, optimization, and integration. The influence is moving toward the ideas that drive the systems, and many of those ideas are being developed here.

To maintain our position, we must build more depth. That means investing in domestic capacity across the digital stack, including secure cloud, chip design, high-performance computing, and resilient supply chains. It means supporting the full life cycle of innovation, from concept to commercial product, with the infrastructure and capital it needs to scale. The plans already exist. The next step is disciplined implementation.

Tech is now a central pillar of Israel’s economy. It contributes 20% of GDP, accounts for over half of exports, and employs a large share of the country’s highest productivity workers. In the first quarter of 2025, Israeli tech companies raised $3.2 billion in private capital, a 12% increase from the previous quarter. Deal volume declined slightly, but the average deal size increased, signaling strong investor conviction in mature companies.

M&A activity reached $35.7 billion in the same quarter. Google’s $32 billion acquisition of Wiz led the headlines, but even without it, first-time acquisitions reached $3.7 billion, a 56 percent increase over the previous quarter. Strategic buyers see Israeli innovation as critical to their global roadmaps. That is a signal of long-term confidence.

What makes this performance more striking is the context. These gains came amid ongoing regional conflict, instability, and a turbulent global economy. New trade barriers, rising protectionism, and shifting capital flows are redefining the rules for technology ecosystems worldwide. Yet despite these pressures, Israeli tech has continued to attract capital, execute deals, and deliver innovation at scale.

This momentum cannot be taken for granted. We need to remove the friction that slows companies down. Tax policy, regulatory complexity, and lack of coordination between government and industry are barriers to scale. Israel needs to be the place where global companies grow, not just where they get acquired.

Technology has also become a tool of diplomacy. Our innovation capabilities have opened doors that traditional diplomacy could not. The Abraham Accords have shown what is possible when shared interests drive collaboration. The region is beginning to recognize the need for joint investment in food, water, energy, and health technologies. These efforts create partnerships with mutual value and long-term potential.

At home, we need to address a growing workforce challenge. According to the Israel Innovation Authority, the number of tech workers in Israel declined by 5,000 in 2024 — the first drop in over a decade. While productivity per employee has increased, we cannot afford to lose talent or allow the local workforce to shrink. We need to attract more women, Arab Israelis, and ultra-Orthodox workers into tech. The sector can increase upward mobility and reduce regional gaps in opportunity, delivering a strategic advantage for society and not just the economy.

We are in a global transition, and Israel’s role in that story is not predetermined. Our technology sector gives us leverage, but that leverage must be reinforced. It requires investment in infrastructure, alignment across sectors, and the ability to scale execution as effectively as we scale ideas.

Innovation is not a sector on the sidelines. It is our national strategy. The coming years will be shaped by how we connect technology to policy, how we secure partnerships from a position of strength, and how we deliver resilience not just to our economy but to our standing in the world.

This Independence Day is a moment to take stock. We can lead. We can influence. But leadership in a tech-driven world is not permanent. It must be built again and again.

Let’s keep building.

Avi Hasson is the CEO of Startup Nation Central, a Tel Aviv-based nonprofit organization that promotes Israeli innovation around the world. Hasson previously served as Israel’s chief scientist and the founding chairman of the Israel Innovation Authority and as an investor in Israeli technology companies.

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