Increasing high-tech work force harder than it sounds

High-tech Photo: Shutterstock

9% of private sector employees in high tech produce 40% of Israel's exports but raising the proportion is not easy.

Israel has been the startup nation for many years. Someone in Herzliya Pituah or on Rothschild Boulevard in Tel Aviv might get the impression that Israel's entire private sector is based on the high-tech industry. That is obviously not the case. Although 40% of exports come from the high-tech industry, only 8-9% of private sector employees work in it, a proportion that has remained unchanged since 2001.

The shortage of employees to fill the available high-tech jobs and the high salaries that they receive are making things difficult and providing decision-makers with a motive to do everything they can to increase the proportion of employees in high tech. In recent years, the government, the Council on Higher Education, the Israel Innovation Authority, and others have made great efforts in this sphere. There are disputes that must be settled concerning this urgent problem, however, headed by three main questions.

1. Is it possible for the proportion of employment in high tech to increase?

Opinion is divided about the government's ability to achieve its target of 15% of the workers in the business sector being employed in high tech. A study published in December by Gilad Brand of the Taub Center for Social Policy Studies in Israel showed that everyone with suitable ability and desire to work in high-tech industry is already doing so. This means at in the short term, at least, the industry cannot grow.

The Aaron Institute for Economic Policy at the Herzliya Interdisciplinary Center recently published two studies. The first showed reported pessimistic findings about the barriers facing Arabs, haredim (ultra-Orthodox Jews), and women in attempting to enter the industry. The second study was optimistic, because it included a more thorough analysis according to age groups. It showed that a higher proportion of young people work in the high-tech industry. In general, one of the arguments is that the figures do not reflect the trends in recent years, such as the sharp increase in the number of Arab students.

2. Does the market prefer university graduates?

Another controversial study was published two years ago by the Samuel Neaman Institute for National Policy. According to this study, there is no shortage of engineers in Israel. Their argument refuted the prevailing claim in the industry that there is a severe shortage of employees that caused a steep rise in programmers' salaries. According to researchers Benjamin Bental and Dan Peled, there is no gap between the number of engineers trained each year and the need in the market.

Nevertheless, one of their hypotheses was that the feeling of shortage results from the gap between college graduates and university graduates, among other things. Bental and Peled told "TheMarker" that employers were looking for excellent graduates, but "accepting more students at the universities will not increase the number of outstanding graduates, as the government is trying to claim." Some of the universities say that the entrance requirements will not be lowered even after the number of students rises.

The colleges express strong opposition to giving the entire budget for the program to the universities. They argue that their study program is better suited to the industry's needs. They allege that the plan detracts from their strength, and that they are located in more outlying areas. Supporters of the plan believe that because the colleges are adapting themselves to the market' needs and increasing the number of their students as much as they can, they need no further incentive. Furthermore, they say, the measure is designed to increase the number of graduates at a high level, for whom there is increased demand among high-tech companies. Research and talks with employers indicate that they prefer graduates of universities and a limited number of highly regarded colleges.

There is an argument among those dealing with increasing the proportion of workers employed in high tech about whether the social goal of increasing the proportions of Arabs, haredim, and women should be taken into account. Since salaries in high tech are higher, there is large potential in this for narrowing socioeconomic gaps.

Some believe that the goal right now is to increase the personnel in the industry in order to encourage companies to enlarge their local development centers and enable more startups to develop. On the other hand, many other think that what is happening in Israeli society as a whole, with two economies emerging in the country - a high-tech economy and a conventional economy - cannot be ignored, and a situation in which the high-tech industry is controlled by Jewish men cannot continue.

Published by Globes, Israel business news - - on June 27, 2019

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

High-tech Photo: Shutterstock
High-tech Photo: Shutterstock
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