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Israel's tech ecosystem ranked #3 in the world

Israel’s start-up ecosystem ranks third in the world on StartupBlink’s annual Startup Ecosystem Index Report. That’s the same place it ranked last year among 100 countries, but Israel’s showing was stronger this year, the Haifa-based research center said.

The United States placed first by a wide margin, with a score of 124.2 on StartupBlink’s index of countries’ tech ecosystem size, quality, and ease of doing business. The UK came in second at 28.7, and Israel ranked third at 27.7. “Last year, the UK had a relatively large lead over the 3rd ranked country Israel, but this difference has now narrowed substantially with the UK and Israel having almost the same total score.

For the first time since 2017, it seems that Brexit does have some negative influence on the UK ecosystem,” the report said, indicating that Israel could move into the second spot in the near future. “Israel’s success is especially interesting given that the country’s ranking for the Business score, indicating mainly infrastructure and regulation, decreased from 16th in 2020 to 25th this year.

The country’s success is attributed to very strong performances on Quality and Quantity scores,” the report said. “Most notably, in 2021, Israel has overtaken the UK in the Quality score, now ranking 2nd after the United States. ”Israel also ranks second globally in Hardware & IoT, Health Technology, and the Software & Data industries, and it ranks in the world’s top 5 in Energy & Environment Technology, Marketing & Sales Technology, and Social & Leisure Technology.

Canada ranked a distant fourth at 19.9, “but it is now much closer to the solid ecosystem of Germany at the 5th spot than to the UK and Israel,” the report said. “Therefore, we can now relabel the term our “Big 3” club, led by the US with a massive gap over both the UK and Israel.

”Among 1,000 cities worldwide, Tel Aviv ranked eighth, behind San Francisco, New York, Beijing, Los Angeles, London, Boston, and Shanghai. Jerusalem ranked 54th in the world. Haifa placed 119th, and Beersheba came in at 238th. But the report took special notice of several cities that placed lower.

“Yokne’am, ranked 5th nationally and 284th globally, is a particularly inspiring case study of a small town relatively far from other cities in Israel that has received tax benefits and used them in a cost-efficient way to create a strong hub that produced a unicorn in its vibrant tech park,” StartupBlink said. “Ashdod, ranked 6th nationally and 459th globally, shows that building a strong seed ecosystem while being situated relatively close to a hub like Tel Aviv is possible, especially considering its advantage in cost of living.

Eilat, ranked 7th nationally and 474th globally, is an inspiring example of an ecosystem which is primarily focused on agro-tourism, and has managed to create an interesting hub deep in the desert by the Red Sea, far from other Israeli cities.

”Further down the list, four new Israeli cities joined the index. Nazareth placed at 508, Caesarea at 521, Modi’in-Maccabim-Reut at 627, and Nahariya at 914.

Zev Stub