JERUSALEM, Israel: Israel's high-tech industry is seeing a growing number of employees looking beyond the country's borders, with requests to relocate abroad climbing over the past year as the effects of prolonged conflict ripple through the sector.

Requests to move overseas by Israelis working for multinational companies operating in Israel have increased in the past year, according to a report released on Sunday by the Israel Advanced Technology Industries Association (IATI). The trend follows Israel's two-year war against the Palestinian militant group Hamas.

IATI said 53 percent of companies surveyed reported an increase in relocation requests from Israeli employees, warning this was "a trend that may, over time, harm the local innovation engine and Israel's technological leadership."

Israel's tech sector is a cornerstone of the economy, accounting for about 20 percent of gross domestic product, 15 percent of jobs, and more than half of the country's exports. Hundreds of multinational firms operate in Israel, including Microsoft, Intel, Nvidia, Amazon, Meta, and Apple.

In its annual report, IATI said some multinational companies are also examining whether to transfer investments and activities to other countries.

"In some cases, companies that faced disruptions in supply chains found alternatives outside Israel during the war, and when these proved efficient, there is a risk that activity will not fully return," the report said. The findings were presented at a meeting led by IATI CEO and President Karin Mayer Rubinstein.

The report also pointed to rising interest in relocation among senior executives and their families, with more employees applying for roles outside Israel.

Still, IATI stressed that most multinationals continue to view Israel's technology ecosystem through a long-term lens, and many firms have performed strongly despite the conflict.

According to the report, 57 percent of companies maintained stable business activity throughout the fighting, while 21 percent expanded their operations in Israel — "a figure that indicates continued confidence in local activity and the Israeli ecosystem even under conditions of uncertainty," IATI said.

Another 22 percent of companies reported damage to business activity during the war, which began on October 7, 2023, after Hamas raided Israel, and ended two months ago following a U.S.-led ceasefire deal.

"Even during the difficult war, the Israeli high-tech industry, including the global companies operating in Israel, once again proved its resilience and its ability to lead in innovation and creativity," Rubinstein said. "We work tirelessly to ensure that Israel continues to be an attractive hub for the activity of multinational companies."

IATI cautioned, however, that risks remain. "Without active steps by the state to create regulatory and geopolitical stability, there is concern about gradual erosion in the stability of the local ecosystem," the report said.