Israel’s tech sector are faced with the challenge of a shortage of workers

TEL AVIV (Reuters) – Israel has it difficult to recruit enough workers for the technology sector, a report showed on Sunday, creating a challenge for the industry seen as the main potential driver of economic growth in the coming decade.

FILE PHOTO: A woman walks near high-rise buildings in the high-tech and business area of Tel Aviv, Israel on 15 May 2017. REUTERS/Amir Cohen/Photo File

Start-Up Nation Central, which published the report with the Israel Innovation Authority, said that while the number of high-tech employees in Israel had grown in the past five years, the percentage of the labour force remained unchanged.

“It is increasingly clear that the desired growth is not possible if the country’s supply of tech workers is inadequate,” said Eugene Kandel, head of the Start-Up Nation Central

“Tech companies are struggling to find technical professionals, with many already find it (them) in other countries.”

The number of technical employees who earn more than the double of the average wage grew to 280,000 in 2017 240,000 in 2013, but represent only 8 percent of the workforce, a decline of almost 10 percent in 2008.

This is surprising, given the fact that investments in high-tech rose, with venture-capital funding of more than $5 billion in 2017, and close to $6.5 billion this year. The number of multinationals operating development centers in Israel jumped to nearly 350 in 2016 of around 50 in 2000.

The sector accounts for about 45 percent of Israel’s exports. But about 15,300 positions remain open.

To find workers, Israeli companies are opening development centers in foreign countries, mainly in Ukraine, but also in the United States, Russia, and India. A few dozen companies have also made use of a process established by the government in the years 2018 to and including the obtaining of visas for foreign tech workers.

But in the long term, more initiatives are needed to increase the pool of workers, Kandel told reporters. There is a great potential among women, who represent only 23 percent of tech workers, and the largely untapped Arab and ultra-Orthodox Jewish sectors.

Arabs account for only 3% of the technical employees, but it is expected that this will soon change as 18 percent of all computer science students of today are the Arabian, equal to their share in the population.

An obstacle to their employment in high-tech is that they live far away from the country.

Aharon Aharon, head of the government Innovation Authority, said he would start two plans in the first quarter of 2019 – one to provide incentives in building an innovation ecosystem in the periphery and the other for encouraging tech companies to open branches outside the city centre.

Reporting by Tova Cohen; Editing by Steven Scheer and Mark Potter

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