Bringing Israel's Arabs into the start-up nation

Arab women Photo: Shutterstock
Arab women Photo: Shutterstock

A new plan aims to break down the barriers to young Israeli Arabs playing their full part in Israel's tech industry.

"Half of the Arab sector hasn't been learning remotely, because there’s no infrastructure. If in Nazareth you can only order a 15-megabyte line - which actually means 5 megabytes at most -how am I going to get three computers connected so my children can learn from home on Zoom?" So says Hans Shakur, Business Development Manager of NGO Tsofen, which works to encourage high-tech and entrepreneurship in the Arab sector. "There’s a lack of internet lines and computers to meet current needs, and I'm not even talking about five years from now."

Distance learning is difficult, but so is working remotely. During the Covid-19 period, just as high-speed Internet connection has become even more critical for accessing education, livelihood, and leisure, Minister of Communications Yoaz Hendel is working towards Knesset approval of the fiber-optic plan, which is forecast to perpetuate the infrastructure gap affecting the Israeli periphery. The plan eliminates, for the first time, the requirement of universality whereby Bezeq Israeli Telecommunication Co. Ltd. (TASE: BEZQ), Israel’s largest communications infrastructure company, is obliged to deploy all communications and internet infrastructures equally across all parts of the country.

The new fiber-optic plan is bad news for the Arab sector, but that’s not all. The five-year plan for the Arab sector, which dealt with creating economic resilience for Arabs in Israel, budgeted as part of Government Resolution 922, will come to an end this year. The plan included budgets for infrastructure, education, housing, employment incentives, and crime reduction. This was the first time that the Israeli government had allocated a budget of this size to the Arab sector, and it was intended to be the first of several five-year plans aimed at reducing economic and the social disparities suffered by Israeli Arabs.

In the past, the government stated that it intended to pass a budget for a follow-up 5-year plan, but today that intention seems light years away due to the budget stalemate. In fact, Israel’s Arab sector is among the first to be damaged by Prime Minister Benjamin Netanyahu's refusal to pass a two-year budget, as agreed on with Minister of Defense MK Benny Gantz. This refusal has led to a great many budget shortages, including billions at the Ministry of Education. This month it was reported that many educational programs were in danger of being frozen, most of them aimed at at-risk youth and youth from the periphery, including villages in the Arab sector.

During this period of uncertainty, the National Committee of Heads of Arab Local Authorities decided to take matters into its own hands. In recent months committee members have been formulating their own five-year plan, and for the first time, it includes a comprehensive chapter dealing with the high-tech sector. The team that dealt with this issue was led by NGO Tsofen, together with senior personages from the Israeli high-tech industry, and with committee advisor Aiman Saif. They even hired the consulting and accounting firm Deloitte to assist in putting together the plan. Although it is extremely wide-ranging, the plan’s high-tech section can also stand on its own. Its authors hope that this way, even if the general five-year plan is delayed, the high-tech section of the plan can be implemented as early as this year.

"We’ve constructed a plan that includes addressing the industry need for skilled labor, with 20,000 Arab employees in high-tech, and reinforcing infrastructure within the Arab sector: education infrastructure, computing, centers of excellence and information, and industrial parks in the Arab sector," Tsofen CEO Sami Saadi tells "Globes". "The Arab sector has suffered from neglect for 70 or so years, but we’re mapping out our needs to indicate solutions. Today we make up 2-3% of the high-tech industry; we can’t bridge the gap alone. It requires large government investment.

"As part of the process of preparing the next five-year plans, it was important for me to convince the Committee of Heads of Arab Local Authorities that we had to formulate an innovation and technology plan, because it's unconscionable that we should be living in the Start-up Nation and not be part of the high-tech industry," Saif tells "Globes". "This was a precedent-setting decision, because the committee usually deals with purely budgetary issues for economic development; the integration of the Arab sector into high-tech was not on its agenda."

Saif served as Director General of the Authority for the Economic Development of the Arab, Druze, and Circassian sectors during the formulation of Plan 922.

"We are in constant contact with the government ministries and the Budgets Division at the Ministry of Finance. We are waiting to see the government's decision on an annual or biennial budget, because the entire Budgets Division is dealing with this issue right now," he adds. "We’re working towards extending 922 for another year, and at the same time, starting discussions about future plans. It's a process that will take several months, and I estimate that if everything goes as planned, in early 2021, the government will be able to approve the next five-year plan for the Arab sector."

Early access to high-tech

The plan is based on four main principles: development of high-tech-oriented human capital in the Arab sector; connecting the Arab sector with high-tech employment opportunities; promoting entrepreneurship and developing high-tech within the Arab Local Authorities; promoting high-tech leadership and culture in Arab society. All this would, on one hand, advance Israel’s Arab sector while, on the other, would boost the Israeli economy and the technology industry. The committee estimates its cost at NIS 700-800 million over five years, with half of the budget earmarked for initiatives on the part of employees and half on the part of employers. The underlying idea is to bring Arabs into the high-tech industry while at the same time bringing high-tech industry to the Arab communities.

"High-tech can’t continue the way it is today," says Shakur. "These days, people come to work in the central region, sometimes remaining in the center, so the periphery is emptied of its creative thinkers. There’s no reason there can’t be employment centers like this in the Galilee and the Triangle. These regions should be taking part, and this plan can be duplicated and applied to other populations in the periphery."

To this end, 20% of the budget is allocated for the establishment of innovation-based employment centers in Arab towns, which the plan’s authors have termed "bustanei hi-tek" meaning "high-tech orchards." "When we refer to a high-tech orchard in the Arab sector, we don’t mean an industrial park with fifty companies," says Saadi. Instead, he describes an integrated employment center of a few high-tech companies, co-working spaces, with entrepreneurship and educational centers. The plan seeks to strengthen the Local Authorities’ role in these "bustanim", strengthening their digital infrastructure, constructing dedicated high-tech buildings, and establishing employment centers for joint use by several Authorities.

"Our plan refers to three such centers in the Arab sector, while right now there are no high-tech companies in these communities. If Microsoft can be in Herzliya, why can’t it be in Kafr Qassem? Even in Nazareth, there is still no government investment, only a private industrial park built by Stef Wertheimer - and we should thank him for that. But look what a high-tech park has done for a town like Yokne'am. Why should we, the Arab sector, always be on the bottom rung of the ladder?" he adds.

Early-stage accessibility of Arabs to high-tech employment is important to their success in integrating into the industry in the long run. This belief is seconded by Dadi Perlmutter, a former Intel global executive and now a social and technology entrepreneur who serves as co-chair of Tsofen’s Public Council, and a former member of the steering committee. "Some companies, especially the big ones, start recruiting employees while they’re still students. And it's much easier to recruit them for a permanent job later on, because you already know them. At the Technion, the percentage of Arab students in the relevant faculties is already over 20%, and the percentage of Arabs working in high-tech companies in Haifa is much higher than in Tel Aviv, but most high-tech companies aren’t at that level.

"Most large companies have already announced that they will move to a remote work model, at least in part. Therefore, we hope more companies will develop more employment centers where workers can work remotely, and maybe come to the center once or twice a week. These centers will, of course, have to be accessible, with the proper digital infrastructure and available transportation. You can also develop an interesting economy around these centers, like what’s happened in Herzliya and Yokneam. It's not easy, especially in setting up teams and absorbing employees, but part of the companies' job is to start building these models now," he says.

IIA’s periphery technology incubators pilot: Not in the Arab sector

The plan also deals with encouraging entrepreneurship within the Arab sector by supporting entrepreneurial activities, and increasing accessibility to venture capital funds. This will be accomplished by appointing venture capital coordinators for the Arab sector whose purpose will be building an investment and high-tech community. Another proposal is to increase the role that Israel Innovation Authority (IIA) technological incubators play in the Arab sector, a role that includes investment in participant companies. The plan’s authors note that the IIA’s periphery technology incubators pilot program has, to date, not existed at all in the Arab sector. The plan proposes supporting accelerator programs and spaces for professional technological research outside of the academic institutions, such as the Klika QasemHub co-working space in Kafr Qassem.

On training, the plan’s main goal is meeting an employment target of 20,000 Arab high-tech workers who have completed studies in technology professions within five years. Today, the number is estimated at 8,000. The main challenges identified in this context lie within the Arab sector’s educational system, which has suffered from long-standing discrimination on the part of the Israeli government.

In recent years, MK Naftali Bennett, when serving as Minister of Education, introduced a program for differential budgeting of secondary education that was designed to close gaps in the education of underprivileged populations, including the Arab population. About NIS 500 million was allocated for a pilot program that ran in high schools across the country, but significant gaps still remain: At present, the budget allocated to high school students in the Arab sector is 40% less than the budget allocated to their Jewish counterparts, and there is a severe shortage of 6,000 classrooms, resulting in overcrowded learning conditions.

The outcome is that the rate of matriculation in physics and mathematics among Arab students is significantly lower than that of Jewish students - 7.8%, compared with 12% among Jews.

To solve this problem, the plan proposes creating a distance learning system, while, at the same time, reinforcing informal education. Among other things, it proposes opening regional centers of excellence in Arab schools, in order to provide outstanding students with a framework for science and technology studies as well as leadership and other skills; presenting leading high-tech industry personages to students; development of an excellence program called "High-Tech Flowers," to reinforce science and soft skills among technology and science students. Alongside this will be Hebrew-language studies, specifically tech-speak, for high school students.

For high school graduates, the plan deals with high-tech professional studies at institutions of higher education and professional training in high-tech fields. Apart from raising educational standards, the aim of the proposed measures for schools is also to address the preference within the Arab sector for professions in education, medicine, pharmacy, and accounting. Many Arab parents consider these occupations as more stable than technology and science, leading to a lower percentage of Arabs choosing technology for their academic studies.

A major barrier is the economic burden of academic studies for the Arab sector, which is economically weaker than the Jewish population. The result of this barrier is that the percentage of Arabs among those studying high-tech professions is only 15%. The plan is designed to bring this percentage up to 25%, similar to the proportion of young Arabs in the population overall.

Today, about 1,500 Arab students who have studied high-tech professions enter the market each year. The plan aims to more than double that number within five years, by setting government goals accordingly, and supporting students through scholarships. One positive noted in the plan: even now, 2,250 Arab students receive scholarships each year.

Quotas and apprenticeships from companies

Finally, the plan addresses the issue of professional placement, identifying significant barriers including geographical accessibility, language, cultural capital, and relevant experience. Regarding the last barrier, the plan proposes providing government support for vocational training for students and graduates at the high-tech companies themselves. The idea is to reduce the risk of employing an inexperienced worker who is unfamiliar with corporate culture, by subsidizing his or her apprenticeship with an in-house training course to acquaint the company with the worker, both professionally and personally. One of the proposed ways of doing this is a year-long internship for computer science students within high-tech companies, with the aim of creating an employment bridge for those students.

Alongside these barriers, the plan seeks to address lack of awareness and unwillingness on the part of employers. This will be done by providing direct incentives to reduce employment risks. In addition to financial incentives, the plan proposes setting diversity targets at the companies themselves, as well as quotas for executive positions at the biggest companies that must be filled by minorities. The plan allocates about NIS 100 million for direct incentives alone.

Published by Globes, Israel business news - - on August 25, 2020 © Copyright of Globes Publisher Itonut (1983) Ltd. 2020

Arab women Photo: Shutterstock
Arab women Photo: Shutterstock
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