Israel plans to double high-tech workforce in 10 years

Participants at the DLD Tel Aviv Digital Conference, Israel's largest international Hi-tech gathering, featuring hundreds of start ups, VC’s, angel investors and leading multinationals, held at the Old Train Station complex in Tel Aviv on September 06, 2017. (Photo: Miriam Alster/Flash90)

Although Israel has the highest percentage in the world of gross domestic product (GDP) in research and development and boasts around 600 new start-ups annually, the Israel Innovation Authority (IAA) has said the high-tech industry must dramatically increase its number of employees to help prevent the nation’s economy from stagnating.

Accordingly, the IAA released a report last week in which it details plans to double Israel’s high-tech force of 270,000 employees to 500,000 over the next 10 years.

As the “start-up nation” Israel’s high-tech industry model is based on large international companies buying out it nascent start-ups before they have developed into mature operating firms. Therefore, IAA CEO Aharon Aharon told reporters at a conference in Tel Aviv, Israel has the “basis for the creation of high technological value in Israel, but the economic value is actually generated abroad.”

Despite its internationally renowned success, Israel’s high-tech industry employs only 8.3 percent of the population. Indeed, the Israeli tech sector is struggling with a shortage of engineers and programmers — and this has led to wages in the industry being almost double those of wages in other sections of the economy. As traditional sectors fight to compete with the low wages in countries like India, few Israeli employees benefit from the economic benefits of high-tech level wages.

The IAA report sets out a number of policies to protect Israel’s economy including allowing start-ups to mature into full companies, encouraging innovation at traditional manufacturing industries, developing other employment sectors and training more women, Arabs and ultra-Orthodox Jews to become high-tech employees.

“Nothing that has been achieved is guaranteed for the future,” Aharon said. “One must always keep monitoring the market and (know) to change (course) immediately when changes are coming.”