Sir Ronald Cohen Warns Political Extremism Threatens Israeli Economy
Venture capital pioneer Sir Ronald Cohen warns that political extremism and emerging economic boycotts targeting Israel could soon threaten the banking sector, risking severe financial fallout.
Sir Ronald Cohen, co-founder of Apax Partners and a pioneer of the European venture capital industry, has warned that political extremism in Israel is already taking a heavy toll on the country's economy. In an interview, Cohen noted that international institutional investors are increasingly cautious about deploying capital in Israel, while consumer and cultural boycotts threaten to spill over into the core financial system.
"The political dimension has become problematic," Cohen said. "Extremism has made institutional investors wary of investing in Israel, and they face growing anti-Israel pressure. An economic boycott is beginning. It starts with settlements, but it is very difficult to distinguish between Israeli products originating from settlements and those from Israel proper. If this boycott reaches the banking sector, it will be extremely dangerous for us."
Economic Resilience and the Cost of War
Reflecting on Israel's macroeconomic standing, Cohen pointed out that while the economy has demonstrated resilience and the shekel remains strong—partly due to high interest rates—growth is sluggish and the technology sector is experiencing rising unemployment. He also highlighted the massive fiscal burden of the ongoing conflict, estimating the total cost between 150 billion and 200 billion US dollars, while Israel's public debt-to-GDP ratio has surged from approximately 60% to nearly 70%.
Addressing the global climate and rising antisemitism, Cohen stressed the urgent need for a coordinated strategic response. "The Israeli government has neglected the battle for global public opinion in favor of military operations," he said, advocating for substantial financial resource allocation and organized strategies across social media channels and international embassies to counter sophisticated hostile campaigns.
Artificial Intelligence Bubble and Impact Investing
Turning to the global venture capital landscape, Cohen expressed absolute certainty that an artificial intelligence bubble exists, driven by inflated valuations and excessive funding rounds. He warned that the market is headed for a sharp correction akin to the dot-com crash of 2000, where overhyped startups will falter upon going public, leading investors to sell off positions at any cost.
Despite macroeconomic headwinds and market corrections, Cohen remains active in the Israeli tech ecosystem, maintaining investments in approximately 30 local companies. He emphasizes that future technological triumphs will increasingly bridge advanced innovation with impact investing—integrating measurable social and environmental outcomes directly into financial models.
"I would enter venture capital again, even more than before. We are in the midst of a major technological revolution with the capacity to significantly improve human lives and the environment. I would launch an impact venture capital fund, because that is the future."
Cohen also underscored the economic imperative of expanding workforce integration for Arab and ultra-Orthodox communities, suggesting alternative national service pathways such as working in hospital computing systems, energy firms, and impact enterprises to foster long-term professional experience and economic inclusion.
