The Israel-Hamas conflict has created recruiting challenges for the blockchain industry.

A year after the start of the Israel-Hamas war, Israel's blockchain industry is facing the challenges of expanding geopolitical instability in the region, with some talent “reluctant to consider” roles across borders.

Despite this, Israeli business leaders interviewed by Cointelegraph are optimistic about the future of the country's blockchain industry.

Statistics for August show that 60,000 Israelis have emigrated in the past 24 months since May. The Business Statistics Forum has reported a 25 percent increase in immigration since February 2023.

The figures have raised concerns about a so-called “brain drain” in the state; Because immigration is more than immigration.

“There is a huge wave of exodus from the country,” Nobel Prize-winning biology professor Aaron Sichanover said in August in a speech at Kibbutz Nir Oz, reported by The Times of Israel.

Ciechanover warned of a shortage of doctors and cited recruitment issues at universities. “We won't have 30,000 of these people in this country,” he added.

The blockchain sector is not immune to war vagaries. Yaniv Baruch, chief operating officer of Tel Aviv-based GameFi Project Plains, told Cointelegraph that “recruitment has certainly become a challenge” in the current environment.

“There has been a significant decline in employment in the technology sector.”

The Times of Israel and the Jewish Independent were among the publications that reported the rise in immigration following the October attacks.

“Uncertainty and security concerns have made some professionals reluctant to consider new career opportunities or relocate,” Baroch said.

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The ongoing conflict is something that individual businesses and business owners have no control over, but that doesn't mean they've gotten along.

As Baroch told us, “We have expanded our recruiting horizons by moving away from local hiring and accepting remote work.”

With many roles in the blockchain industry being remote, it's only natural that there's an increased focus on remote workers filling the gap.

“This transition [to remote work] It allows us to access talented professionals from anywhere in the world who can contribute,” said Baroch.

“We've also made sure to showcase what makes Finance unique: working on the latest blockchain technology and being part of a dynamic and forward-thinking team. It helps us attract people who are passionate about making a tangible impact on fintech and blockchain.”

Personal and political

In the year The increase in immigration from Israel by 2023 is a statistical fact, but like many statistics, making sense of the raw data can be a tricky business.

The escalation of the conflict between Israel and Hamas has seen a surge in migration, but some commentators point to judicial reforms earlier in the year, which weakened the law-making powers of Jewish courts, as another contributor.

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There are also many personal reasons why people choose to relocate. Misha Lederman, head of strategy at FitFi app Lab Economy, is among the Israeli diaspora in Europe. Lederman will remain in Lisbon, where Lab Economy is headquartered.

Like many immigrants, his reason for living outside Israel was personal, not political.

When Cointelegraph spoke to Lederman, he had only positive things to say about Israel and its blockchain sector, saying the “start-up nation mentality” and “mix of resilience, innovation and global mindset, with a strong focus on education” are particularly valuable for the country.

But Lederman went on to explain why the Israeli military was a key part of his success story.

“The Israeli military's deep integration with Israeli society plays a critical role in developing technology talent, especially in cybersecurity and encryption, where Israel has emerged as a world leader,” Lederman said.

“Many tech entrepreneurs are veteran officers from the Israel Defense Forces, particularly from the army's cyber security units, a hotbed for high-end blockchain and Web3 innovators,” he added.

The optimism continues.

Baruch and Lederman are both positive about the future of Israel's blockchain industry.

“I am very optimistic about the future of blockchain in Israel,” Baroch said. “Despite the current challenges, our country has become a leader in global development. With more than 6,000 startups operating in various technology sectors, Israel has one of the highest startups per capita. Such a vibrant ecosystem nurtures an entrepreneurial culture conducive to the development of blockchain technology.

In a June survey of the most attractive regions for startups, Startup Genome listed Tel Aviv as the fourth best in the world, behind Silicon Valley, New York and London. Remarkably, this was one place higher than last year.

On the other hand, Israel's economy is undoubtedly feeling the strain. Growth has slowed and debt is rising. On October 1, the S&P 500 downgraded Israel's credit rating from A+ to A.

Even against this challenging macroeconomic backdrop, Lederman pointed to data that indicates Israel remains a significant player in the blockchain sector.

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Despite Israel's population of just 9 million in 2024, it contributed a staggering 4.5% of global Web3 venture capital funds, a dominant influence, according to a September Crunchbase report.

“Israel's blockchain applications are outstanding, enabling it to pioneer new technologies and lead in Web3 developments, making it a key player in the global crypto landscape,” Lederman added.

“Other countries have learned from Israel's collaborative, entrepreneurial ecosystem, its focus on military-civilian technology integration, and its focus on cybersecurity — a critical element in the development of blockchain and Web3.”