With 10% of Israel's adult population and only 7% of the country's jobs, Jerusalem is not realizing its employment potential. Even though it has government ministries, ten institutes of higher education, high-tech companies, and good transport links, it is not considered an in-demand location for businesses.
According to the Geocartagraphia Institute, Jerusalem has three million square meters of employment space including 1.94 million square meters of offices, stores and services and the rest is industry and workshops. Jerusalem's businesses are mainly producing for local consumption, with the exception of a few international tech companies and hundreds of startups.
343,000 people work in Jerusalem with 75% of these employees living in the city. Over the past decade, 1.1 million square meters of employment areas have been planned of which 400,000 square meters has been built.
The main areas of employment in Jerusalem are on Har Hotzvim, the city center, the government offices complex, Givat Shaul and Talpiot. In these latter two areas plans have been formed to strengthen the office sector combined with construction of housing. There are also tech parks at Malkha and Givat Ram and the biotech park in Ein Kerem. On the western side of the Givat Ram campus is the Hujitech Park and there is a plan to build a new tech park in Pisgat Zeev.
But Jerusalem's flagship project is Sha'ar Ha'Ir - Jerusalem Gateway at the western entrance to the city near the new railway station, where a business quarter is currently being developed. The project encompasses 55 acres and includes 24 buildings - office blocks, hotels, cultural and commercial facilities with access to the railway and central bus stations, and three light rail lines. Three projects are currently under construction, the Balilius complex, the Old Sha'arei Zedek Hospital and surrounding land and the K Complex.
Approval was also recently granted for the development of an industrial park in East Jerusalem with 210,000 square meters of light industry and workshops the Um Tubba neighborhood near Atarot and 90,000 square meters in Issawiya.
Who will work in all these industrial, tech and office parks?
Geocartagraphia economics director Noam Cohen thinks that all these additional industrial, office and tech zones are not sufficient. "In Jerusalem one million square meters of industrial and office areas will be built in the coming years. It is a large amount by any measure in a city where construction for these uses was very limited until 2018."
He added, "However, there are three signs that raise hope for change, of which two are being moved forward by the public sector: the dramatic entry of entrepreneurial groups into the area of employment in the city, the Sha'ar Ha'Ir project, which has already begun and the continued move of government offices to the capital."
"Government housing is currently a leading players in terms of demand in Jerusalem and represents an important target for entrepreneurs but it is not enough and they nbeed to encourage organic growth of businesses in the city and attract other anchors in the high-tech and business services sectors (with support of government programs)."
"In my opinion, there is a need for the presence and involvement of the Jerusalem Municipality and the Jerusalem Development Authority in leveraging and preserving the reserves of academic employees, who represent the required work force and talented employees, which companies find today mainly in the Tel Aviv area."
"Aggressive involvement of the Municipality, the Jerusalem Development Authority and academic organizations in partnership with entrepreneurs, would be a decisive influence for successfully occupying the planned areas in the city in all the employment zones, which could bring the city forward as a major factor in Israel's employment market."
Jerusalem Mayor: We will be the capital of high-tech
Jerusalem Mayor Moshe Lion said, "My vision is simple - strengthening Jerusalem by building as many housing units as possible. Building the light rail provides up with options for building many more homes. Not many open areas remain in Jerusalem so most is based on urban renewal. In order to bring young couples to Jerusalem, we must also build millions of square meters of employment zones. We are currently building one million square meters throughout the city. Our aim is to bring high-tech here because I want to be the capital of high-tech of the State of Israel. I believe that employment, housing and the education system, which has one of the highest levels in the country, will bring Jerusalem to heights we have not known."
Lion stresses that the desire to increase the number of businesses in the city doesn't only stem from the hope of increasing tax revenue. "The difference between Jerusalem and the center of Israel is that Jerusalem really lacks millions of square meters of places for employment. The plan is not to reach the levels of central Israel but a reasonable level."
Government ministries are meanwhile ignoring the law requiring them to be based in Jerusalem
"The problem of bringing government ministries back to Jerusalem is in part simply that there is nowhere to put them and therefore the areas that we are building are nothing compared with what we need to build. I'm not doing it just for the municipal taxes but because the city needs to provide quality jobs that are not based on tourism and government ministries."
What advantages can you offer compared with Airport City, Modi'in or Beit Shemesh? Why would a high-tech company want to come to Jerusalem?
"In contrast to those places, Jerusalem has the Law for the Encouragement of Investment Capital. High-tech companies pay 50% of the taxes they pay in other places. We have a relative advantage in everything related to high-tech. In addition, our municipal taxes are much lower for high-tech industry. And things are developing. It was from Har Hotzvim that companies like Mobileye and others grew."
Some say that perhaps there will be the buildings for companies but a shortage of a professional work force
"Don't worry. Whoever says that doesn't know Jerusalem and it's very shallow to say that. There is no end of available employees here. Jerusalem is not only the city's residents but also the metropolitan area including Gush Etzion and the settlements in Judea and Samaria."
Published by Globes, Israel business news - en.globes.co.il - on May 10, 2021
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