A comprehensive snapshot of the Palestinian digital economy's status, potential, and constraints
before the October 2023 conflict
Baseline Period: 2019-2023 | Data Source: World Bank, PCBS, PMA
Economic Contribution & Scale
3.2%
of GDP
≈ $493 million (2021)
Key growth sector, nascent but critical for development
$85M+
ICT Service Exports
Annual (2017)
Remote work and outsourcing to global markets
250-300
Startups
Tech Ecosystem (2021-22)
80%+ focused on outsourcing vs scalable products
ICT Sector as % of GDP
Comparison to regional averages
Palestine (2021)3.2%
MENA Average~4-5%
Global High-Income~8-10%
Digital Access & Infrastructure
Strong Access Indicators
Household Internet Access80%
2019 baseline
Smartphone Ownership86%
Households (2019)
Individual Internet Use88.6%
Population (Jan 2024)
Mobile Connections4.46M
82.2% penetration (Jan 2024)
Critical Infrastructure Constraints
Mobile Technology
West Bank: 3G Only (since 2018)
Gaza: 2G Only (blockade restriction)
No 4G/5G access despite ITU Resolution 12
Fixed Broadband Speed
16.3 Mbps
Average (2021) | Median improved to 63.48 Mbps by 2024
Mobile Broadband Speed
7.1 Mbps
Among lowest in region due to technology restrictions
Infrastructure Control
• Import restrictions on "dual-use" equipment
• No access to Area C for infrastructure
• Denial of spectrum allocation
Human Capital & Skills Landscape
~2,500
Tech Graduates/Year
Universities (2022)
30.4%
ICT Graduate Unemployment
2019
12.4%
Advanced Digital Skills
Workforce penetration
42%
Women's Unemployment
vs 23% men
The Skills Mismatch Cycle
1. Education Gap
Universities produce graduates with strong theoretical knowledge but weak
practical and durable skills demanded by industry
2. Brain Drain
Senior talent leaves for Israeli or international firms,
draining local ecosystem of mentors and leadership
3. Ecosystem Starvation
Startups lack leadership, forced into unsustainable salary competition
they cannot win
Business Environment & Startup Ecosystem
Startup Landscape
Total Startups250-300
2021-2022 baseline
Outsourcing Focus80%+
vs scalable products/services
Key Hubs
• Ramallah: Primary tech cluster
• Gaza: Gaza Sky Geeks (renowned hub)
• Nablus: Emerging ecosystem
• Bethlehem: Tourism-tech focus
Critical Financing Gaps
Early-Stage Funding
Critical lack of seed and Series A funding
Forces premature revenue generation or low-margin outsourcing
Payment Barriers
No PayPal or international payment gateways
86.5% of e-commerce is cash-on-delivery
Market Access
• Movement restrictions hinder meetings
• Area C access denied for infrastructure
• Export/import delays and barriers
• Limited access to global accelerators
E-Government & Digital Public Services
53
Public Agencies
Connected via Zinnar framework
Low
E-Service Uptake
Despite framework existence
Silos
Data Management
Ministries operate independently
Key Challenge: Enforcement Gap
While the Zinnar interoperability framework connects 53 agencies (2021 baseline),
the World Bank assessment found it was poorly enforced. Ministries continue operating in
data silos, and citizen uptake of e-services remains low due to limited awareness,
trust issues, and lack of digital signatures legal recognition.
Pre-Conflict Paradox
The Palestinian digital economy demonstrated a paradox of potential and constraint.
High levels of internet access (80%), smartphone penetration (86%), and a young, educated population
created significant digital potential. However, this potential was severely limited by
"analog" gaps in regulation, financing, and skills—and most critically, by
political restrictions on infrastructure (4G/5G denial, equipment imports, Area C access).
Strengths
• High connectivity (88.6% internet use)
• Young, educated workforce
• 2,500 tech graduates/year
• Vibrant startup scene (250-300 firms)
• Digital resilience culture (Gaza Sky Geeks)
Critical Constraints
• 4G/5G spectrum denied
• Skills mismatch & brain drain
• Early-stage funding gap
• No international payment access
• Regulatory framework incomplete