Yehuda Zisapel brings high-tech hopes to Arad

Yehuda Zisapel  photo: Eyal Izhar

Zisapel combines original solutions to Israel's engineer shortage with a fresh chance for disadvantaged youth - backed by his own cash.

Yehuda Zisapel is one of Israel's first technology entrepreneurs and among its first investors in startups. He began in 1975 with Bitcom, which later became Bynet Data Communications, and founded RAD Data Communication with his brother Zohar in 1982. The RAD group now has over 20 companies, including Radware, Radvision, Silicom, and many others.

The Zisapel brother have held IPOs for 11 companies on Nasdsaq, sold 10 other companies, and acquired over 15 companies. They were among the first to grant options to employees. Over 100 ventures and startups came out of RAD-Bynet group companies, some of them founded by Yehuda and Zohar, and others by over 50 entrepreneurs who came from the two brothers' companies.

During all of these years of business activity, Yehuda Zisapel has been troubled by the shortage of engineers and has warned about it. He was always answered with, "Why do you think so many engineers will be needed? They will wind up without jobs and move to New York." The equation, Zisapel says, is simple: "In the high-tech industry, the more engineers there are, the bigger the shortage. Why? Because they start out by working, and later found their own startups, which creates more jobs."

The solutions that Zisapel offered were highly focused, concentrating on the shortage of high school graduates matriculating with studies in advanced mathematics and the enormous potential of people living in Israel's outlying areas, who do not get a chance, and some of whom are unable to pay for their studies. Zisapel devised plans, recruited partners, and discovered that government officials were in no hurry to do anything. Zisapel accused the politicians of looking for an immediate political return and of lacking long-term vision. Even today, although the Israel Innovation Authority has set ambitious targets for increasing the number of high-tech workers, the few resources at its disposal are not devoted to encouraging employment in the sector. For this reason, other than isolated projects like Intel in Kiryat Gat and the high-tech industrial park in Yokne'am, Israeli high-tech is mostly concentrated in the center, between Herzliya and Ness Ziona.

Private projects for realizing the potential

Over the years, Zisapel initiated and backed a number of significant programs to apply what he always claimed: once young people from disadvantaged backgrounds get the right support and counselling, they will reach the same achievements as their counterparts from the high income brackets and the "right" neighborhoods.

The purpose of the first project, called "From Three to Five," was to help 11th and 12th grade students in outlying areas who failed in basic mathematics to study until they succeeded in matriculating with five-point mathematics studies. During its 13 years of activity, the project produced 2,000 students a year with matriculation in advanced mathematics.

The second project, "High-Tech Horizons," was designed to help demobilized soldiers from communities in the outlying areas, with priority begin given to immigrants from Ethiopia and the former Soviet Union with a low socioeconomic status who lacked matriculation certificates. Participants in the program study a preparatory program in advanced English, mathematics, and physics until they reach a level at which they can gain acceptance to the Technion, Israel Institute of Technology or Ben Gurion University of the Negev. During this time, they also receive their tuition, as well as living quarters and financial support. 60% of the program's graduates have been accepted at universities, and the others continued their studies at colleges. After a number of years, the government adopted the program and made it a government program under the name "Achievement for High Tech."

Now Zisapel is embarking on a third episode in his crusade to realize the employment potential of communities in the outlying areas. The current project, Kamtech - Campus and High-Tech Center, was first presented in May at a Bynet-Expo conference. Scheduled to begin next February, the project is extremely ambitious. It consists of an academic course of studies in computer science with a major in cyber, with graduates being promised a job in the RAD-Bynet group's high-tech enterprises. What is special about the program is that it takes place entirely in Arad. The participants in the program are young people from Arad, in Israel's south. Studies will take place at the Open University campus to be built there, and the jobs will also be in a Bynet branch that will be set up there. The entire program, from tuition to the cost of living quarters and other living expenses, will be funded by the project. If it succeeds, Zisapel is talking about taking it to 50 other towns in the outlying areas.

Zisapel is a conservative manager and an engineer at heart. He thinks logically and has a preference for electronics and chips. He speaks quietly, almost shyly.

"Globes": What is the reason that you, at age 75, are starting a new project in Arad, of all places?

Zisapel: "What powers the economy in this country is high tech. The conventional industries are losing ground in productivity, output, and competitiveness, while high tech continues to grow. We have a constant shortage of personnel, because in order for Israel to remain a high-tech power, it needs large numbers of engineers. A small coterie isn't enough for big achievements. In the previous project, Horizons for High Tech, I proved that you could take kids from the outlying areas who have no other chance and give them tools. But you'll tell me, and it really bothers me, that although I'm giving an opportunity for the outlying areas, I'm actually weakening them, because the graduates of the project will leave the outlying areas. They'll go on to work in Haifa, and mainly in Tel Aviv.

"So here the program is more ambitious. The studies will be in Arad, the participants live in the town, and I want them to continue working there. I'll employ them there in the town while they're studying. But Arad is only a pilot; it can be reproduced anywhere.

"I preferred a town with 50,000 residents and Arad has only 27,000, but when I contacted several towns - this was a few months before the local elections - the mayors were busy and didn't know whether they'd be reelected. The one who grabbed the project with both hands was Arad Mayor Nissan Ben Hemo, who pushed things ahead from day 1. Other towns are also relevant, as long as I have a partner to work with - someone I don't have to chase."

How is the project going?

"We presented the program at a conference attended by 150 people, and 115 people have signed up so far. It's a demanding program that commits its participants to seven years of work and studies. We've already held the first round of interviews, and the target is to get an initial group of 25-35 students who live in the town. I was pleasantly surprised. As of now, all of those who registered have a high-school education, although it wasn't a requirement, and 15 of them matriculated in advanced mathematics. They are hungry and motivated. People who in Arad love the place, and there's lively activity there."

Some will suspect that your motivation is to recruit cheap personnel who are hard to find in Tel Aviv.

"It's a lot easier to recruit employees than to invest five years in training them. After the previous projects, I tried to persuade the universities that the right way is to establish branches, for example a branch of Ben Gurion University in Dimona or a Technion branch in Tiberias. It turned out, however, that the Planning and Budgeting Committee of the university heads' committee opposes this for budgetary and other reasons. So I approached the Open University, and a good program was formulated."

Maybe the program's graduates will want to found their own startups.

"That's what I hope will happen. First of all, they have to study, acquire skills, get to and know the work; then the startup can be founded with them, and in the next stage, they'll be able to found it themselves."

You are convinced that all this can be done in Arad?

"Arad is well planned - the first city that was planned from the very beginning. It has a fairly large industrial zone in which most of the companies are in conventional industry. Some of them have closed down, such as Arad Towels. It's all still low tech. The problem with these industries is that wages are low and there is an alternative in Jordan and Egypt, or the activity can be moved to China. The advantage with high tech is that in contrast to construction or elevator engineers, of whom we know exactly how many we need, there's no limit on the number in high tech: we'll always need more."

How big is the investment?

"There's three years of academic study and one year of training, and the students get tuition and living expenses. It comes to NIS 30,000 a year, or NIS 120,000 per student till he or she gets a degree. That's a lot of money, but keep in mind that, in the end, the country will get it back as income tax on the salary of high-tech engineers."

Is it all your initiative, or do you have partners?

"It's my initiative which partners have joined, such as MK Robert Ilatov (Yisrael Beitenu) with the Negev Hi-Tech Project, and of course the Open University, the Arad municipality, and I'm also talking with the Jewish National Fund, which will contribute to the budget. The Arad municipality is giving us support and the location."

Didn't you ask the government ministries to take part in the project?

"The problem with the government is that there are good people and there is vision and money, but they can't initiate anything. Once I founded the project and proved that it was feasible, for example with Horizons for High Tech, they joined it and adopted the project. The same goes for the current project: the government always talks about enormous budgets, Digital Israel, narrowing gaps, putting money into the outlying areas, but it eventually comes to nothing.

"I've matured since Horizons for High Tech. I once wanted and tried to persuade everyone. For seven or eight years, I approached all of the government ministries, and they all expressed support. I remember one meeting during the budget discussions when they told me that they really wanted the project. Benjamin Netanyahu was there as Minister of Finance, Ehud Olmert as Minister of Industry and Trade, leading people in their ministries, and from my side, I was there as chairperson of the Israel Association of Electronics and Information Industries, Ben Gurion University president Prof. Avishai Braverman was with me, as was the president of the Technion, and all sorts of industrialists. Netanyahu said, 'I want you to sum up everything for and against within two weeks, and we'll go with it.' Olmert agreed. After two months of chasing their director generals, I made no progress at all.

"So then I thought I might be able to do it alone. I went to the CEOs of Bank Hapoalim and Bank Leumi and told them, 'These guys will be your best customers, because they'll be in high tech.' A loan starting in the second year was agreed, and in the end, even though the Rashi Foundation, Mizrahi Tefahot Bank, and the Ministry of Defense helped me, I invested most of the money myself - almost NIS 10 million a year."

Did you get it back, or was it a donation to the country?

"I got absolutely nothing back."

Published by Globes, Israel business news - en.globes.co.il - on December 27, 2018

© Copyright of Globes Publisher Itonut (1983) Ltd. 2018

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Yehuda Zisapel  photo: Eyal Izhar
Yehuda Zisapel photo: Eyal Izhar
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