"Israel is approaching its tech potential ceiling"

Uri Gabai  credit: Eyal Izhar
Uri Gabai credit: Eyal Izhar

Start-Up Nation Policy Institute CEO Uri Gabai warns that Israel's tech industry cannot keep growing without solutions to core socio-economic problems.

"The macro-economic cycle and the approaching slowdown should not divert us from the long-term goal: continuous improvement of the human capital infrastructure of the Israeli economy. The world is becoming more technological, and Israel’s human capital must adapt itself to the modern labor market, whether people eventually work in technology or whether they work in high-productivity jobs in other industries," Start-Up Nation Policy Institute CEO Uri Gabai said today at the "Hi&Hire: Expanding High-Tech Employment" conference held by Start-Up Central and "Globes".

Gabi said that despite the current dip in the tech industry and the wave of layoffs, "the shortage of good employees is chronic, and even if it reduces in periods of slowdown, the high demand will remain and will even increase in the long term," adding, "The Perlmutter report released last week is an important and comprehensive report, and any discussion of human capital for high tech in the coming years has to start from it."

Gabai was referring to the report of the National High-Tech Human Capital Committee set up by the government and chaired by entrepreneur, venture capitalist and former Intel executive David (Dadi) Perlmutter.

With a new government about to take office, Gabai stressed several points concerning employment in the tech industry. The first was about what was really important to measure. "The question how to measure and what to measure will direct government policy in the coming years more than the question whether the target should be 15% or 17%. In this context, the Perlmutter committee did well to widen the perspective to include technology workers beyond the technology industry - they could be working at a bank as well. It must be remembered that technology is not the end, but the means of achieving higher productivity."

Concerning technology workers, of which there is a severe shortage, Gabai said, "Every increase of 1% in the proportion of the workforce employed in high tech is harder than the previous one. We are starting to approach the ceiling of the technology potential that the country has to offer in the short and medium term. We are reaching people for whom it is more difficult to go into technology and whom it is more difficult to train. We currently have a set of solutions such as the Coding Bootcamps, and on the whole the system works well.

"When we formed the Innovation Authority in 2015 and started the Coding Bootcamps, the companies active in this market could be counted on the fingers of one hand. Today, this industry has developed, and it offers dozens of different kinds of training, suitable for part of the population. About 13% of technology workers come to the technology industry via this channel."

Gabai warned, however, that the next quantum leap in the number of technology workers would require a solution to the root problems in Israeli society, such as the gaps in the standard of mathematics and English studies between the center of the country and the periphery, and between non-haredi Jews on the one hand and Arabs and haredi Jews on the other. "We are approaching the point at which the ability to grow the technology industry in the long term and Israel’s core socio-economic problems will coincide. Only a fundamental solution for the socio-economic gaps, which cause and are caused by gaps in education, will bring about continued growth for the Israeli high-tech industry in the long term," Gabai stressed.

The conference is held in cooperation with Start-Up Nation Central, and with the participation of the Israel Innovation Authority and Israel Electric Corporation.

Published by Globes, Israel business news - en.globes.co.il - on November 14, 2022.

© Copyright of Globes Publisher Itonut (1983) Ltd., 2022.

Uri Gabai  credit: Eyal Izhar
Uri Gabai credit: Eyal Izhar
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