High-Tech is Leading the Way: AI has Arrived in the Startup Nation, but the Rest of the Economy is Still Hesitant
According to a survey conducted by the CBS in June among over 34,000 businesses (each employing 10 or more people), 28% of companies in the Israeli economy already use AI tools in their daily operations. However, a closer look shows a much more divided picture. High-tech and financial companies are driving these numbers, with 60% reporting regular AI use. When those sectors are excluded, as well as construction, the national average drops to just 15%. Adoption is uneven across industries: 20% in commerce, 28% in manufacturing, and 26% in services and hospitality.
Global data shows very diverse numbers. The CBS mentions an ICT survey conducted in the European Union in 2024, according to which only 13% of businesses there have adopted AI. In contrast, a report by BCG from June of this year surveyed over 10,000 employees in 18 countries, and 72% of them reported regularly using AI at work. A KPMG survey conducted last December among companies in the financial sector found that 62% already use AI, and 51% of those are even exploring the use of AI agents.
How Companies Are Using AI
Despite growing usage, only 17% of Israeli businesses report paying for AI tools. Larger companies (250+ employees) are more likely to invest in these tools, and 29% said they do, while just 16% of small businesses (fewer than 50 employees) reported paying for AI.
There’s also a noticeable difference in how AI is applied across sectors. When asked about use cases, 42% of businesses said they use AI to handle routine tasks. Only 14% said they apply AI to more complex tasks that require cognitive skills. That figure jumps to 23% in high-tech but falls to just 3% in the manufacturing sector.
The Future of Employment: Forecasts and On-the-Ground Reality
The impact of AI on employment remains a central—and often controversial—topic. The CBS asked companies how AI adoption has affected their workforce. A vast majority (89%) reported no change. About 5% said the technology helped them reduce new hiring, and 4% reported a reduction in current staff, half of them said these were employees with a low level of education, and the other half said they were employees with a high level of education. This challenges the assumption that only routine or low-skill jobs are at risk.
Globally, the conversation often revolves around employee readiness. BCG’s international survey found that only 36% of employees felt they’d received adequate training in AI tools, and just 25% said management provided clear guidance. Despite these gaps, 75% of respondents agreed that AI agents are essential for future success.
Mind the Gap: A Call for Broader Integration
The disparity between high-tech and the rest of the economy may not be surprising, but it is significant, and it demands action. AI is not just a tool for startups and tech giants. It holds the potential to improve productivity, profitability, and competitiveness across all sectors of the Israeli economy.
Israeli and global data suggest that businesses want to adopt AI but gaps in information and guidance are a delaying factor. The Israel Democracy Institute, in response to the CBS survey, reiterated its position that “Israel’s innovation policy should focus not only on the development of new technologies in the high-tech sector but also on the integration of existing technologies in the rest of the economy”. In addition to training for employees, the Institute emphasizes the importance of preparing the education system for the AI era – especially in fostering critical thinking skills.
What’s Next?
Widespread, responsible use of AI is not a luxury but a necessity for the future of the Israeli economy. To achieve this, we need comprehensive programs that raise awareness, increase digital literacy, and support adoption across businesses of all sizes, especially in non-tech sectors. At the same time, it is important to ensure that the Israeli workforce is up-to-date and knowledgeable about new tools. The world of work is going to change, and Israeli employees and businesses must change with it.
We at DatA-IL invite you to connect with us. Share the challenges and barriers your organization is facing in adopting AI, so we can promote the tools and solutions that will help all sectors participate in this technological transformation.
Link to our survey – Click here
To read the CBS survey – Click here
