Number of tech employees in Israel passes 300,000

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Israel Innovation Authority data show that the number of tech employees in Israel has risen to nearly 9% of the workforce.

The Israel Innovation Authority reports that the number of tech employees increased by 19,000 in 2018, and by 11,000 in the first five months of 2019, raising the number of employees in the tech industry to a record 307,000. The figures for tech employees, published by the Central Bureau of Statistics, exclude telecom sector employees. According to the Central Bureau of Statistics, the average monthly wage in the technology industry was NIS 24,000.

Figures for 2018 published last January by the Central Bureau of Statistics showed a 0.4% rise in the proportion of employment in the technology industry, including the communications sector. The Innovation Authority's figures, which exclude the communications sector, show the same rate of increase, from 8.3% to 8.7% at the end of 2018.

This is the steepest rise in the proportion of those employed in the technology industry since 2006. In general, the proportion of those employed in the technology industry rose from 7% to 8% in 2002-2016, with fluctuations along the way. The figures for 2018 and 2019 reveal that the proportion of those employed in the technology industry, excluding communications, is nearing 9% for the first time. According to the figures for January-May 2019, the steep increase in the proportion of those employed in technology sectors is continuing in 2019.

The Innovation Authority attributes this growth to the various measures taken by the government to increase the supply of qualified human capital for the industry, such as the Council of Higher Education Planning and Budgeting Committee's plan to increase the number of students in technological subjects in higher education and the Innovation Authority's support tracks, such as the Coding Bootcamps track and special tracks for encouraging entrepreneurship among Arabs, haredium (ultra-Orthodox Jews), and women.

This growth follows reports by various agencies of a shortage of 10,000-15,000 employees in the industry, as of 2018. The state, on the other hand, has set an ambitious target: employment of 12% of Israel's labor force in the technology industry by 2030. Growth in the proportion of those employed in the technology industry matches forecasts published last May by the Aaron Institute for Economic Policy, which predict that the proportion of those employed in the technology industry will vary in the 11.5-15% range in the coming decade. This is lower than the forecast published by the Innovation Authority in last 2017, which predicted that the proportion would reach 15% within a decade. On the other hand, these predictions are more optimistic than an earlier study by the Aaron Institute and a study published several months before that by the Taub Center for Social Policy Studies in Israel.

Despite the growth in the sector, it is still important to stress that it is relevant only to a specific part of Israeli society. The Taub Center says that most of the those employed in the technology industry are men (the same is true in the rest of the world), and are non-haredi Jews. While the proportion of non-haredi Jewish men employed in the technology industry rose from 8% to 15%, the proportion among Arabs and haredim remains miniscule.

Published by Globes, Israel business news - en.globes.co.il - on August 27, 2019

© Copyright of Globes Publisher Itonut (1983) Ltd. 2019

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