As Israel’s cyber ecosystem continues into a new decade, it is facing a 33% decline in new startups alongside the increased global competition. “Nothing runs on its own without energy. We must fuel innovation, boldness, and ingenuity,” said Zohar Rozenberg, VP of Cyber Investments at Elron

Zohar Rozenberg, VP of Cyber Investments at Elron & RDC, spoke to Israel’s cyber startups, investors, and ecosystem drivers the last week at Cybertech Tel Aviv, one of the world’s largest cybersecurity conferences. As a leading player in Israel’s cybersecurity field for decades, Zohar has helped shape IDF cyber policy and guided some of today’s most promising startups to impressive exits, grabbing the attention of global technology giants.

The reality of a vibrant cyber ecosystem in Israel has taken decades of investment, planning, and a culture of rewarding bold innovation. This joint private and public venture of creating the world’s leading cyber hub has paid incredible dividends that are felt beyond the cyber-ecosystem. These same benefits that have brought international prestige and investment are beginning to show troubling signs of slowing down. Corporates competing over talent with entrepreneurial capabilities and decreasing incentives to innovate are dangerous for Israel’s relatively young ecosystem. “Markets saturate, power consolidates, and competition grows stronger,” said Zohar Rozenberg. “Nothing runs on its own without energy. We must tirelessly fuel innovation, boldness, and ingenuity without letting our guard down.”

While 2016 welcomed 60 new startups, 2019 brought only 40, a staggering 33% drop. Despite a robust local ecosystem, along with the presence of the critical mass needed to support it, Israel is in danger of losing the innovative edge that has made it a model of success. As more companies try to build on existing markets, investors have begun to favor rapid revenues over significant innovations.

The presence of global tech giants helps innovative entrepreneurs better understand corporates’ needs and how to build enterprise-grade solutions. Their development around Tel Aviv and the center is yet another pillar of the local cyber ecosystem. Talented individuals,  graduating from the IDF’s coveted 8200 unit, which has proven to be trained, capable, and market-ready, can choose whether to take the path of founders or joining a global corporate. It is in the interest of companies big and small to welcome their bold ideas, encouraging them to tackle tomorrow’s cyber challenges.

Tomorrow’s ingenious solutions are being concocted today. Fintech, Insurtech, automotive, and manufacturing are evolving, bringing with them new cybersecurity challenges. Israel has the talent, infrastructure, and global investment needed to usher in a new era of Israeli technological leadership. We must also focus on keeping the critical mass high, encouraging new businesses to form and feed the ecosystem that has become a beacon of innovation.