Will digital health restore its luster?

Executive Summary

Israel, once dubbed the Start-Up Nation because of its innovative business environment, is relying heavily on digital health to revitalize its high-tech sector. The government is spending $275 million on a plan that includes making its citizens’ medical records and genetic data available to researchers and corporations globally. The goal is to add to the investment that multinational companies such as Samsung and IBM have already made in Israel. But the bet that the digital health initiative will pay off may collide with several nagging problems in Israel’s high-tech industry, including a chronic shortage of trained workers and increased foreign competition. The plan also has prompted some privacy concerns, even though participation is voluntary, because of the threat of data breaches.

Key takeaways include:

  • Israeli digital health startups attracted $340 million in investment in 2017 and are on pace to exceed that total in 2018.

  • The worldwide market for digital health products will grow to more than $200 billion by 2020, according to one projection.

  • Companies want to use the digital health data for their research and development work, such as understanding the impact and efficacy of medications.

  • Click here to listen to an interview with author Sara Toth Stub or click here for the transcript.

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Resources for Further Study



Gradus, Yehuda, Eran Razin and Shaul Krakover, “The Industrial Geography of Israel,” Routledge, 1993. Three Israeli geography professors examine the early history of the country’s high-tech sector and the political realities that forced Israel to undertake a policy of economic self-sufficiency.

Senor, Dan, and Saul Singer, “Start-up Nation: The Story of Israel’s Economic Miracle,” Twelve, 2009. A former U.S. foreign policy adviser (Senor) and former Middle East-based journalist (Singer) chronicle the rise of Israel’s high-tech sector, including the role of culture and politics.


“Sharing the Risks of Israel’s Numerous Life Science Opportunities,” conference brochure, 17th National Life Science and Technology Week, pp. 16–22, https://tinyurl.com/ycfqjech. Ami Appelbaum, chairman and chief scientist of the Israel Innovation Authority, a government agency overseeing policy related to the high-tech field, discusses the opportunities and risks in Israel’s life science sector, including in digital health.

Schwartz, Yardena, “More Israelis are Moving to the U.S. – and Staying for Good,” Newsweek, May 10, 2018, https://tinyurl.com/y98v4zzr. A journalist examines the reasons many Israelis are moving to the United States, including the economic incentives for highly educated professionals in the high-tech sector.

Reports and Studies

“The Changing Landscape of Disruptive Technologies,” KPMG, 2018, https://tinyurl.com/y8l349qc. The research division of the global auditing firm KPMG examines the changing geography of the global high-tech industry, including the emergence of new tech hubs around the world.

“Digital Health Report 2016,” Startup Nation Central, 2016, https://tinyurl.com/y7ttuutp. A nonprofit organization that supports Israel’s startup ecosystem looks at the country’s digital health sector, including capital-raising and the scope of its companies.

“Israel Innovation Authority Report 2017,” Israel Innovation Authority, Oct. 2, 2017, https://tinyurl.com/y7tnh58q. An Israeli government agency describes developments and challenges in the high-tech sector and the implications for the overall economy.

“Israel’s Life Sciences Industry,” Israel Advanced Technology Industries, 2018, https://tinyurl.com/yb3g6s2h. An umbrella organization that represents Israel’s high-tech private sector details current developments in the area of life sciences, including digital health.

“OECD Economic Surveys: Israel,” Organisation for Economic Co-operation and Development (OECD), January 2016, https://tinyurl.com/yb4959b2. The research department of the 34-member OECD explores Israel’s economy and its challenges, including large social gaps and low labor force participation rates.

Brand, Gilad, Avi Weiss and Assaf Zimring, “The Macro Picture of Israel’s Economy in 2017,” Taub Center for Social Policy Studies in Israel, December 2017, https://tinyurl.com/ycjv5pvo. Three economists examine the current impact of the high-tech sector on Israel’s economy and society, including its role in widening social inequality.

The Next Step

Digital Health

“UK’s National Health Service seeking Israeli digital health firms,” The Times of Israel, Feb. 14, 2018, https://tinyurl.com/y7cgcjkt. The United Kingdom’s National Health Service is drawing on the expertise of the Israeli digital health sector as it seeks to improve its health care system.

Benmeleh, Yaacov, “Israeli Billionaire Seeks $500 Million for Health-Tech VC Fund,” Bloomberg, April 17, 2018, https://tinyurl.com/yd6ej4vs. An Israeli life-sciences venture capital firm has raised $200 million, and hopes to generate a total of $500 million, for a fund that will support health-tech startups on the verge of breakthroughs.

Solomon, Shoshanna, “Israel kicks off plan for startups to try out tech at health organizations,” The Times of Israel, June 11, 2018, https://tinyurl.com/y8wax45o. A new $8.4 million government program is designed to boost research and development at startups by providing access to digital medical records.

Military Technology

“How Israel is becoming the world’s top cyber superpower,” Vice News, March 13, 2018, https://tinyurl.com/y79a8w5g. Israel’s leadership in cybersecurity has been cemented by the Israeli Defense Force’s recruitment of hackers and coders starting in their teens.

Kubovich, Yaniv, “Israeli Military Watchdog Warns: IDF in Crisis, Best Career Officers Leaving,” Haaretz, June 27, 2018, https://tinyurl.com/y6vgphnt. Israel’s lucrative high-tech sector and a lack of incentives within the military are leading to an exodus of the Israeli Defense Force’s best and most experienced officers.

Levy, Ruti, “For the Israeli Army’s Tech Units, a Few Rich Men,” Haaretz, May 15, 2018, https://tinyurl.com/y8jm49vm. Positions in Israel’s military technology units have become highly coveted because they provide a jumping-off point into Israel’s high-tech sector.


Central Bureau of Statistics
66 Kanfei Nesharim St., P.O. Box 34525, Jerusalem 9546456, Israel
+972 2 659-2666
Fax: +972 2 652-1340
Israeli government department tracking and analyzing data on trade, the economy, industries, tourism, population characteristics and other topics.

Israel Advanced Technology Industries
Medinat HaYehudim 89, Building E, 11th floor, P.O. Box 12591, Herzliya Pituach 4676672, Israel
+972 73 713-6313
Fax: +972 73 713-6314
Umbrella organization made up of members of Israel’s high-tech and life sciences industries, including startups, local branches of multinational companies, incubators, technology transfer companies, academic institutions and municipalities.

Israel Export and International Cooperation Institute
29 Hamered St., P.O. Box 50084, Tel Aviv 68125, Israel
+972 3 514-2830
Fax: +972 3 514-2902
Nonprofit quasi-governmental organization that promotes Israeli goods, trade and cooperation with international companies and industries.

Israel Innovation Authority
4 HaYarden St., P.O. Box 1099, Airport City, 7019900, Israel
+972 3 715-7975
Israeli government department overseeing the development and implementation of policy to promote innovation, and making government grants for research and development.

IVC Research Center
99 Ha’Hashmonaim St., 2nd Floor, P.O. Box 20067, Tel Aviv 6713316, Israel
+972 73 212-2333
Fax: +972 73 212-2323
Business information company tracking capital-raising, sales of companies and other aspects of Israel’s high-tech sector.

Startup Nation Central
28 Lilienblum St., Tel Aviv, Israel
Nonprofit organization supporting and tracking in detail Israel’s startup ecosystem, producing regular reports and maintaining databases of startups, multinational companies and incubators in various sectors.

Taub Center for Social Policy Studies in Israel
15 Ha-Ari St., P.O. Box 3489, Jerusalem 9103401, Israel
+972 2 567-1818
Fax: +972 2 567-1919
Think tank researching Israeli social and economic challenges and the impact of government policies on the population.

DOI: 10.1177/237455680421.n1