'They're not reaching out to us': How the Israel-Hamas war demolished Gaza's struggling tech economy

• Israel's war against Hamas has decimated parts of Gaza — and its tech ecosystem.
• Palestinian tech workers in the Gaza Strip and West Bank are struggling to operate in the crossfire.

A 10-minute walk from Al-Aqsa University, the first higher-education institution in the Gaza Strip, is the colorful coworking space that houses Gaza Sky Geeks.

The organization, backed by Google and Microsoft, was set up to foster new startups and has developed a coding academy for up-and-coming tech talent in the region. It was the Gaza Strip's first and only tech-startup accelerator when it launched and has churned out thousands of tech professionals since its launch in 2011, TechCrunch reported in October.

Following Hamas' terrorist attacks on Israel on October 7 and Israel's retaliatory airstrikes, the building is now a shell.

"The area around the Mercy Corps building, which housed Gaza Sky Geeks, has been leveled," Ryan Sturgill, the former head of Gaza Sky Geeks, told TechCrunch. "The structure is standing but blown out. The front of it is sort of ripped off."

Gaza Sky Geeks is part of the broader Palestinian tech ecosystem, which, like the region's broader economy, is a minnow compared with that of its more powerful neighbor.

Israel's tech industry, known for its strengths in defense, artificial intelligence, and, controversially, spyware, accounted for about 18.1% of its gross domestic product last year, according to data from the Israel Innovation Authority. Israeli startups raised a record $25 billion in 2021, according to data from Start-Up Nation Central.

The tech sector has formed an important part of Israel's military response to Hamas' attacks. Its strength in tech is closely linked to its citizens' mandatory army service, and up to one-fifth of its tech workers have been called up for reserve duty, per estimates from Start-Up Nation Central CEO Avi Hasson.

There are few reliable estimates of the Palestinian tech industry's size, but Fast Company Middle East reported the startup ecosystem was worth just $66 million in 2021, off the back of a total investment of $9.5 million.

Palestinian tech workers have comparatively fewer resources (namely internet connectivity and cash) at their disposal and tend to be reliant on outsourced work. In conversations with Insider, several lamented the damage caused by the conflict, which has hammered the region's already substandard communications network and amplified difficulties in importing technological equipment.

"I was working as a consultant for a couple of companies that have actually stopped working with us," said a Gazan telecoms engineer who spoke with Insider on condition of anonymity over safety concerns but whose identity is known to us. "They're small, but they know the situation in Gaza, so they're not reaching out to us anymore."

Hamas' attacks led to more than 1,400 Israeli deaths and the capture of about 200 hostages, Israeli authorities have said. Israel retaliated by cutting off supplies of electricity, water, fuel, and goods to Gaza's population of almost 2.3 million people. The Hamas-run Gaza Health Ministry says the area's death toll has surpassed 8,000.

Already shaky internet is damaged further

With Israel's airstrikes against Gaza stifling the region's already shaky internet service, working has become next to impossible.

"Whenever we have an escalation of the crisis on the ground, this is usually reflected in our connectivity," said Mona Shtaya, a Palestinian digital-rights researcher at the US's Tahrir Institute for Middle East Policy who works remotely from the West Bank. "The first thing that was targeted during the ongoing escalation was the communication infrastructure and electricity."

This affects remote workers, freelancers, tech workers, and students who "won't be able to pursue their duties," Shtaya added.

The region was already "lagging behind the world" when it came to connectivity and internet on normal days, Shtaya said. Palestinians in the West Bank rely on 3G, while those in the Gaza Strip still use 2G. Israel controls the underlying telecommunications infrastructure in occupied areas, Shtaya said.

While "Gazans work tirelessly and are known for being resilient," this past week has been gloomy, said a technology consultant working in the West Bank who spoke on condition of anonymity for fear of retaliation but whose identity is known to Insider.

"No one in Gaza is going to care about their business" because "they're fearing for their lives," he added.

Operating a business under occupation isn't easy

Life wasn't easy before the attacks.

It was already difficult to import hardware and other equipment, the West Bank consultant said.

"It prevents us from growing and building our economy and our tech sector," he said.

As Israel controls the borders of Gaza and the West Bank, with the exception of Gaza's border with Egypt, the movement of equipment and other goods that these businesses need is often restricted, if not delayed, Wired previously reported.

Often, Palestinians face difficulties and harassment at these checkpoints, two of the people who spoke with Insider said.

"Just the perceived risk of Palestinians, it scares people," the tech consultant said.

Those who look abroad to find jobs in tech or as remote workers are stifled by a lack of online payment infrastructure, Shtaya said.

PayPal doesn't serve Palestinians in the West Bank and Gaza despite years of campaigning from tech firms but does work for Israelis living there. It means Palestinians can't be paid the same way as others around the world, an extra barrier to work, she added.

Still, Palestinians have cooperated with Israeli businesses. Tech companies take on work outsourced by Israeli companies and work with multinational companies that have branches in Israel. Nvidia hired 100 engineers in the West Bank, and Apple also has a presence, TechCrunch reported.

The Palestinians in the US, Europe, and Persian Gulf regions also have some operations on the ground across the territories, and many outsource work to Palestinians.

Working through war is not a task unfamiliar to Gazans, the consultant told Insider. But rebuilding the city's infrastructure won't be easy.

"The longer this lasts, the more dire an effect it will have," he said. "But Gazans, they're creative. They find solutions to problems that are sort of ingrained in our DNA. I think, eventually, things will pick up and we will rebuild and build better than before."