Israel’s Tech Miracle: The Secrets Behind Its Success and Five Opportunities for Kazakhstan

On the day NVIDIA founder Jensen Huang made his historic visit to Astana, a Kazakh delegation of government officials, representatives of national companies, universities, and the media was on its way home from Tel Aviv. What many people don’t know is that Israel is home to NVIDIA’s largest R&D hub outside the United States. The company employs more than 6,000 people there, and its Israeli teams play a key role in developing high-speed networking technologies for AI and NVIDIA’s data centers. Google, Meta, Apple, Microsoft, Amazon, and other tech giants also have major R&D centers in the country. How has such a small country managed to become a global leader in high technology despite decades of armed conflict and constant security threats? What lessons from Israel’s experience could Kazakhstan learn? And most importantly, how can Kazakhstan work more closely with Israel in AI, cybersecurity, and the commercialization of scientific research and development? Vitaly Volyanyuk, founder of Digital Business, shares his perspective.

Life After October 7

– The trip was organized by the Israeli Embassy in Astana, with Ambassador Yoav Bistritsky personally and actively involved in the preparations. We had a busy schedule, visiting tech companies, startups, venture capital funds, and government agencies working on innovation, AI, and cybersecurity. The trip also gave us a chance to see what life in Israel is like, at least as much as we could take in during such a short visit.

Things were relatively calm in Israel during the week of our visit. From early morning, Tel Aviv’s waterfront was full of people working out. By evening, restaurants and cafés were packed, lively and buzzing with conversation. And the food deserves a mention. Israeli cuisine goes well beyond the shakshuka and hummus we’re familiar with, drawing on the culinary traditions of the many countries from which Jews have immigrated to the Promised Land. The only noticeable difference was in Jerusalem, near the city’s Palestinian neighborhoods and communities in the West Bank. Locals told us they were seeing more young men and women carrying weapons (both men and women serve in the Israeli military). And the signs reading “Shelter” and “Safe Area” in hotels, offices, shopping malls, and the airport, pointing to places where people can take cover during rocket attacks, were a reminder of just how fragile peace and quiet can be in the Middle East.

Three years ago, on October 7, 2023, the Palestinian militant group Hamas launched the deadliest attack in Israel’s history. We visited Kibbutz Nir Oz and the site of the Nova music festival, where terrorists carried out a massacre that day. We spoke to people who had been there. Some had miraculously survived, but lost loved ones in the attacks. Altogether, around 1,200 people were killed across southern Israel that day, with thousands more injured. Another 251 people, including women, children, and the elderly, were taken hostage.

Israel responded with Operation Swords of Iron. The fighting spread across nearly the entire Gaza Strip, with Israel deploying aircraft, armored vehicles, artillery, and ground troops. Hamas lost much of its military strength and leadership, although the Israel Defense Forces (IDF) have yet to eliminate the group entirely. At the same time, the war has killed tens of thousands of Palestinians, destroyed residential neighborhoods, schools, hospitals, and infrastructure, and displaced much of Gaza’s population. It has also triggered a severe humanitarian crisis, with shortages of food, water, and medicine. All of this has drawn sharp criticism from numerous countries and international organizations.

Kazakhstan, as we know, condemned the Hamas terrorist attack on civilians while also urging Israel not to use disproportionate force in Gaza. Kazakhstan has long supported a peaceful resolution to the Israeli-Palestinian conflict through dialogue and a two-state solution, with an independent Palestine and Israel existing side by side in peace and security.

It’s also worth remembering that last year, Kazakhstan announced it was joining the Abraham Accords, which aim to normalize and strengthen relations between Israel and countries across the Muslim world. And in April this year, Israeli President Isaac Herzog paid an official visit to Kazakhstan, where he held talks with Kassym-Jomart Tokayev.

During an informal dinner with our delegation in Tel Aviv, Kazakhstan’s Ambassador to Israel, Daulet Yemberdiyev, told us that the two countries have worked closely together in healthcare for many years. Around 3,000 Kazakh doctors have received training and completed internships through Israeli medical programs.

Agriculture and water management are also important areas of cooperation. Israel may be a small country, much of it covered by deserts and arid land, but it has become a world leader in agricultural technology and efficient water use. Kazakhstan has much to learn from this experience.

“And of course, there’s huge potential for cooperation in high tech, especially AI and cybersecurity,” Daulet Yemberdiyev said. “Just about every major American tech company has strong ties to Israel. High tech is the country’s biggest export.”

According to the Israel Innovation Authority’s official report for 2025, high tech accounted for 58% of Israel’s total exports of goods and services, worth around $85 billion. For comparison, Kazakhstan exported roughly $40 billion worth of oil last year, according to the country’s Bureau of National Statistics.

In other words, Israel earns more than twice as much from high-tech exports as Kazakhstan does from oil. So what’s the secret behind this small country’s success?

From Start-Up Nation to Scale-Up Nation

In 2009, “Start-Up Nation: The Story of Israel’s Economic Miracle” was published and went on to become a bestseller. Many of the factors behind Israel’s success as a startup nation explored in the book remain just as relevant today.

Israeli founders tend to think globally, building startups with large international markets in mind from day one. The country invests heavily in research and development (R&D), while universities, researchers, startups, and venture capital investors maintain close ties. The military is also a major training ground for tech talent, especially the IDF’s elite Unit 8200, which specializes in signals intelligence, cyber operations, and big data analysis.

And, of course, there’s the distinctive culture of Israeli organizations. A big part of it is chutzpah, a Hebrew word with no exact English equivalent. It’s usually understood as a kind of boldness, a refusal to be intimidated by authority, and a willingness to challenge the way things are done. In Israel, employees openly disagreeing with their bosses is perfectly normal. What matters isn’t so much someone’s job title or military rank, but what they know and how convincing their arguments are. With less rigid hierarchies and more direct communication across teams, ideas can be tested quickly, mistakes acknowledged without hesitation, and changes made on the spot.

Israel’s success in tech also has a lot to do with the fact that people generally aren’t afraid of failure. Setbacks are simply accepted as part of the process. After all, you can’t have real innovation without them.

But some aspects of Israel’s tech ecosystem have changed significantly since “Start-Up Nation” was published.

In the past, many Israeli founders followed a simple formula: find out what a big corporation needs, build it fast, and sell it fast. Plenty of startups made exits worth $100 million, $300 million, or even $400 million. Today, though, many Israeli entrepreneurs have much bigger ambitions. Rather than selling their startups, they want to build them into global tech companies worth billions of dollars. Israel is moving from a Start-Up Nation to a Scale-Up Nation, a country that knows how to not only create innovative companies but also grow them into much larger businesses.

AI and cloud computing have also changed Israel’s tech industry in recent years. For Israel, already one of the world’s leaders in cybersecurity, this has created enormous opportunities. As companies around the world move their infrastructure to the cloud and start using AI in their day-to-day operations, they increasingly need new ways to protect their data, cloud environments, and digital identities.

Today, cybersecurity draws the most investment in Israel’s tech sector, and it’s also where companies are hitting record valuations.

In February 2026, American cybersecurity giant Palo Alto Networks completed its $25 billion acquisition of Israel’s CyberArk. A key reason for the deal was the rise of AI and the need to protect not only people’s accounts but also the digital identities of autonomous AI agents. Interestingly, Palo Alto Networks itself has strong Israeli roots. It was founded in the US in 2005 by Israeli entrepreneur Nir Zuk, who served in the IDF’s elite military intelligence Unit 8200. Before founding Palo Alto Networks, Zuk worked at Check Point, another well-known Israeli cybersecurity company.

Then, in March 2026, Google completed its $32 billion acquisition of Wiz, an Israeli startup specializing in cloud cybersecurity. It was the biggest acquisition in Google’s history and the largest exit ever for an Israeli startup.

For comparison, as of October 2026, Kazakhstan’s most valuable publicly traded company, KazMunayGas, had a market capitalization of around $49 billion, while the country’s largest fintech company, Kaspi.kz, was valued at $17 billion.

The Wiz deal was so big that Israeli authorities had to take an unusual step. Google’s acquisition was expected to bring in around $3.2 billion in taxes for Israel. But there was a catch. Converting such a huge sum of dollars into shekels all at once could have pushed up the value of Israel’s currency, making its exports less competitive. To avoid that, the Bank of Israel, the Israel Tax Authority, and the Ministry of Finance agreed that most of the taxes from the deal would be paid directly in US dollars rather than shekels. All because of one startup. That’s how much influence a single tech company can have on a country’s economy.

What’s also interesting is what Wiz founder Assaf Rappaport and his partners did after the exit. They started investing heavily beyond tech, moving into more traditional industries. They bought a controlling stake in a popular Israeli TV channel and are now in talks to buy the McDonald’s franchise in Israel, which has around 230 restaurants… But back to tech.

Record R&D Investment and Government Support for Startups

According to the latest OECD data, Israel spends 6.76% of its GDP on research and development (R&D) each year. When “Start-Up Nation” was published in 2009, that figure was around 4%. With Israel’s GDP growing substantially since then, annual R&D spending has jumped from roughly $8.5 billion to an impressive $36.7 billion. Today, Israel leads the world in R&D spending as a share of GDP.

R&D Spending: Country Comparison

Research and development (R&D) spending as a percentage of GDP

Note: Total R&D spending includes investment by the government, private companies, universities, and nonprofit organizations.

Sources: OECD, WIPO, World Bank.

What’s striking is that Israel’s enormous R&D spending comes mostly from outside the government. Israeli businesses, foreign investors, and international corporations account for more than 90% of the total.

Venture capital investors also contribute significantly to R&D funding. According to IVC Research Center, more than 800 Israeli and foreign venture capital firms, including corporate venture funds, invested in Israeli tech companies in 2025. It’s worth noting, however, that R&D statistics only count the portion of that investment companies actually spend on research and development. Money spent on marketing or sales, for example, isn’t included.

Israel’s leading VC funds now have the capital to invest not just in early-stage startups, but also in promising companies that have already taken off and are ready to grow.

During our visit to Israel, we stopped by the office of Jerusalem Venture Partners (JVP), one of the country’s oldest and largest venture capital firms. JVP was also an investor in CyberArk and, by the looks of it, made quite a return on that investment.

“We don’t just invest in cybersecurity. We back all kinds of tech companies. What matters most to us is whether a startup’s technology has export potential, whether it can attract customers in North America, Europe, and other major markets,” says Gadi Porat, general partner at JVP. When I asked Gadi how much the fund typically invests in startups these days, he said checks range from $1.5 million to $2 million at the pre-seed stage to more than $100 million in some cases, when a company is growing and scaling up.

Although private venture capital dominates the market, the government also plays an important role in supporting startups and driving innovation.

The Israel Innovation Authority, a government agency, puts around $700 million a year into tech projects and the infrastructure that supports them. The funding comes straight from the state budget. Lior Yaffe, head of international organization relations at the agency’s International Cooperation Division, points out that startups don’t have to give up equity to receive funding. If a startup manages to turn its technology into a commercial product and starts making money, it pays the agency a percentage of its sales in royalties until it has repaid the amount required under the grant terms. If the project fails and brings in no revenue, the startup doesn’t have to pay the money back.

Importantly, the Israel Innovation Authority receives steady funding from the state budget, regardless of whether the projects it supports succeed or fail. When it comes to high tech and the innovation economy, consistency and long-term thinking matter.

During our conversation, Lior Yaffe was surprised to learn that startups in Kazakhstan struggle to attract investment at the scaling stage, when the amounts involved are no longer hundreds of thousands of dollars, but millions or even tens of millions.

“That’s strange. Why is that? Kazakhstan has plenty of money,” he remarked. And it’s hard to argue with that. But having capital and being willing to invest it in high-risk tech ventures are clearly two different things. Still, the fund of funds established in Kazakhstan should help ease the shortage of venture capital. As far as I know, the people behind the fund studied Israel’s experience, including Yozma 2.0 (“Initiative 2.0” in Hebrew), a program launched by the Israel Innovation Authority together with Israel’s Ministry of Finance.

The program works by encouraging pension funds, insurance companies, and other institutional investors to invest in venture capital funds, with the government coming in as a co-investor. For every dollar invested by institutional investors, the government puts in another 30 cents. The decisions about which startups to back, however, are made by professional venture fund managers, not government officials.

The Israel Innovation Authority also tries to correct imbalances in the venture capital market. For instance, while private investors are flocking to cybersecurity startups, where returns have hit record multiples, the agency backs startups in sectors that are currently less appealing to private VC funds or take longer to deliver returns. These include MedTech, ClimateTech, and quantum technologies. The agency also works to support startups outside the main tech hubs of Tel Aviv and Jerusalem.

Another tool the Israel Innovation Authority uses is bilateral R&D funds, which Israel sets up with other countries. And this brings us directly to the question of how Kazakhstan and Israel could work together in high tech.

From Buying Ready-Made Solutions to Setting Up Israeli R&D Centers in Kazakhstan

After our trip to Israel, I see at least five areas where the two countries could work together in high tech. And, of course, there could be more.

1. Buying Israeli cybersecurity products and solutions

This is the simplest and most obvious area for cooperation. Kazakhstan has well-developed GovTech and FinTech sectors, but personal and corporate data need strong protection. Cyberattacks are growing more sophisticated, and hackers are using AI agents to find vulnerabilities and gain access to the information systems of companies and government agencies. This creates a whole new set of security challenges.

Major organizations in Kazakhstan have been using solutions from Israel’s Check Point for years. Founded in 1993, when the internet was still in its early days, the company was one of the pioneers of modern cybersecurity. Today, Check Point operates in Kazakhstan through a network of local distributors and partners.

While in Israel, we also got to see a new generation of cybersecurity companies founded during the rapid rise of generative AI. One of them is Dream, a startup we visited at its office in Tel Aviv. The company was founded in 2023 but has already raised $412 million and reached a $3 billion valuation. Dream develops national cyberdefense solutions that use AI to find vulnerabilities, detect threats, and respond to cyberattacks.

Dream puts a strong emphasis on technological sovereignty. Its products can run directly on government organizations’ own infrastructure, an approach known as on-premises, and even on systems completely cut off from the internet (air-gapped). This means governments can use advanced AI technology to protect against cyber threats without giving up control of their data or digital infrastructure.

So technological sovereignty and the use of solutions developed by foreign providers can go hand in hand.

2. Knowledge sharing and internships

Kazakhstan could learn a lot not just from Israeli technology, but also from how government agencies and private companies in Israel approach cybersecurity and digital transformation. That’s why I think we should develop joint education programs and internships.

For example, during our trip to Beersheba in southern Israel, we visited CERT-IL, the national cyber incident response center. One interesting aspect of its work is that it has dedicated, industry-specific security operations centers (SOCs) that monitor threats and respond to incidents in different sectors of the economy, including energy, finance, and telecommunications. We even got to see the Energy SOC in action. This approach could be particularly useful for Kazakhstan’s national holding company Samruk-Kazyna, whose portfolio includes strategically important businesses across several industries.

Another interesting practice at CERT-IL is its 24-hour hotline, 119. Both companies and ordinary citizens can call for free if they’ve experienced a cyberattack or noticed suspicious activity. The center’s specialists help them figure out what’s going on and advise them on what to do first. This way, the government not only protects critical infrastructure but also gives the public access to help with digital security.

Healthcare digitalization is another area where the two countries could learn from each other. In Haifa, we visited the government-run Rambam Medical Center, which has a three-level underground parking garage that can be turned into a fully equipped hospital with 2,000 beds in the event of war, an earthquake, a tsunami, a chemical attack, or another emergency.

Rimma Benenson, the senior nurse in the neurosurgery department, showed us how staff can use a single dashboard to see, in real time, how many doctors and nurses are available, how many beds are free, and how much blood, oxygen, medication, and other medical supplies are in stock. (It’s worth noting that in Israel, nurses with academic degrees have considerable authority. They can run entire departments and even manage medical services at the hospital director level.)

Hospital administrators no longer need to call different departments, ask for reports, or gather information by hand. Everything they need to know is right there in one system. This is especially important in emergencies, when decisions have to be made fast. Just think back to the COVID pandemic.

One thing I want to highlight is that in almost every organization we visited, we met Russian-speaking immigrants from former Soviet countries. Rimma Benenson, for example, moved to Israel from Belarus, while others we spoke to came from Azerbaijan, Russia, and Ukraine. We also met people who had moved to the Promised Land from Kazakhstan.

Personal connections, an understanding of how people in Kazakhstan think, and the ability to speak the same language all create more opportunities for tech cooperation between Kazakhstan and Israel.

3. Cooperation between universities

We also visited the Technion in Haifa, one of the world’s top universities for engineering and technology. According to a PitchBook study, around 1,300 Technion graduates have started their own companies over the past decade, raising more than $43 billion in venture capital. The Technion also ranks among the world’s top 10 universities for producing bachelor’s degree graduates who go on to found tech startups.

Representatives of the Technion told us that they’re now discussing plans to open a cybersecurity education center in Kazakhstan together with KazNU. A similar center, by the way, opened in Azerbaijan in 2023. Kazakh universities already have fairly close ties with their Israeli counterparts. For example, KazNU has a partnership agreement with Bar-Ilan University, a major research university in Israel. Satbayev University, AlmaU, and L.N. Gumilyov Eurasian National University also run cooperation programs with Israeli universities.

Kazakh universities could also work more closely with major Israeli tech companies. Check Point, for example, runs Check Point SecureAcademy, a program spanning more than 80 countries. It provides universities with teaching materials, software licenses, and practical support to help train cybersecurity specialists. Narxoz, SDU, and Almaty University of Power Engineering and Telecommunications are among the universities taking part.

A natural next step would be for Kazakh universities and Israeli companies to set up joint cybersecurity labs. These projects could also help advance applied research in the field, with opportunities to commercialize the findings.

4. Bilateral research and development funds

As we learned from the Israel Innovation Authority, Israel already has bilateral R&D funds with several countries, including the United States, India, South Korea, and Singapore.

How does it work? Companies from both countries work together to develop a new technology product, with the joint fund covering up to 50% of the project’s budget. The companies put up or raise the remaining money themselves. They also agree among themselves on how to share intellectual property rights and future revenue from the product, with the terms spelled out in a partnership agreement.

This way, governments share the risks of developing new technologies with businesses while also encouraging international cooperation.

For example, Israel and India set up a joint fund called I4F with an initial $40 million, each contributing $20 million. Another example is KORIL, a joint fund between South Korea and Israel, to which both countries contribute $4 million a year.

So why not consider creating a similar fund between Kazakhstan and Israel? It would give Kazakh tech companies a chance to draw on the expertise of Israeli partners, develop new products together, and bring them to international markets.

5. Establishing R&D centers for Israeli companies in Kazakhstan

Kazakhstan could also attract Israeli tech companies to set up R&D centers in Kazakhstan.

Salaries in Israel’s tech sector are exceptionally high. According to the country’s Central Bureau of Statistics, the average topped $11,000 a month in the summer of 2026. But living in Israel is expensive, too, and housing prices are through the roof. In Tel Aviv, for example, a three-room apartment for a family can cost anywhere from $700,000 to $2 million to buy. Renting one will set you back $2,000 to $6,000 a month, depending on the neighborhood and the condition of the apartment.

Beyond the high costs, Israel has another problem: a shortage of highly skilled professionals. The country is trying to address this, in part, by encouraging more Arabs and ultra-Orthodox Jews to enter the tech industry. Special education and training programs are being developed to help them find jobs in the sector. But Israel still doesn’t have enough highly qualified specialists.

That’s why Israeli tech companies are expanding their engineering teams and opening development centers abroad. And it’s worth stressing that they’re doing this not just to cut costs, but also to gain access to more skilled talent.

One notable example is Wix, the Israeli company behind the popular website-building platform. Wix has been operating in Ukraine since 2013. According to its president, Nir Zohar, the company has invested more than $200 million in its Ukrainian operations over the years. In 2025, despite the war, its Ukrainian team had around 600 employees, including nearly 300 engineers.

There’s also Check Point, the Israeli cybersecurity company that announced in 2025 it would set up an R&D center in Bangalore, India.

Belarus offers another example. Israeli entrepreneurs worked with local teams there to develop the Viber messaging app and the Juno taxi service. According to the founders of these projects, the total cost of employing an engineer at their Minsk offices was roughly three times lower than in Israel.

So why shouldn’t Kazakhstan attract similar R&D centers? It would help us become part of the global tech market even faster.

Kazakhstan has a strong mathematics tradition. International tech companies like Playrix (whose founders, brothers Igor and Dmitry Bukhman, are now Israeli citizens, by the way) and inDrive already have successful operations here. We have our first unicorn, Higgsfield, too. Astana Hub offers excellent tax breaks for its residents, while the Astana International Financial Centre (AIFC) makes it possible to structure deals with foreign investors under English law.

We also have a generally tolerant society, peace, and security, things you appreciate all the more when you return home from Israel. And I think we’re hungry for ambitious international projects, in the best sense of the word.

Those were the thoughts on our minds as we flew out of Tel Aviv… By the way, a very high-level delegation from Kazakhstan is expected to visit Israel soon. We’re looking forward to some important news about closer cooperation between our countries in tech. As they say in the Middle East, inshallah!