Israel highway - August 25 2011
Traffic on an Israeli highway. Illustrative.
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There's a reason why the leased car has become the symbol of the Israeli high-tech industry. Every morning almost 100,000 high-tech workers take their company car and head for the office in what is often a long commute from home.

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Some 38% of high-tech workers work outside the area where they live, compared to 24% of Israeli workers across the board, meaning improvements to transportation infrastructure are a cause many of them hold near and dear. And as more lanes and more trains open up more areas of the country, many workers are choosing to look outside classic employment centers for work, saying an hour commute on the Trans-Israel Highway is better than sitting in one spot at the entrance to Tel Aviv for the same amount of time. The most prominent example of the migration of high-tech office parks is Yokneam, which was linked to Highway 6 about two years ago.

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"Only 17 kilometers of highway are about to change the employment of high-tech workers in Israel," said Yariv Inbar about two years ago. Inbar is the CEO of Mediatech Hi-Tech - the training and development branch of Matrix in the north. This week he claimed that his estimate was correct. "The investment has proved itself. I think that now people can permit themselves to work almost anywhere."

Tel Aviv still the hub of high-tech

One of the problems typical of Israeli high-tech is the high level of concentration of the most desirable jobs in the center of the country. According to a report by the Central Bureau of Statistics last week, Tel Avuv and the center of the country accounted for 65% of the expenditure on research and development in the business sector in 2009. That means the area of employment that pays the highest salary has remained in the center. Some 20% of R & D expenditures were registered in the Haifa area, and 15% in Jerusalem, the south and the north.

The gap between the center and the rest of the country is also evident when we examine the number of full-time jobs in the area of R & D. In the center and in Tel Aviv, respectively, there are 9.6 and 12.2 full-time jobs in R & D for every 1,000 residents. In the rest of the country, with the exception of Haifa where the gap was closed for the first time in 2009, there are one to three full-time jobs for every 1,000 residents.

In other words, engineers who want to work in high-tech are all but tied to the center.

Moving jobs and homes out of Tel Aviv will require well developed transportation infrastructure, and the trend toward change can already be seen. According to the CBS, between 1995 to 2007, Israeli roads saw an increase of about 240,000 commuters traveling outside their area of residence. A Bank of Israel study also found that investment in highways increased salaries by 10% to 14%.

According to the CBS report, the percentage of high-tech employees working outside their area of residence increased from 30.2& in 1995 to 37.5% in 2007.

For workers employed in start-ups and local and international R & D centers, as opposed to chip manufacturing and the like, long commutes are even more common. The percentage of those workers employed outside their area of residence increased from 27.5% in 1995 to 40.3% in 2007.

'The demand comes to the highway'

Dr. Yaakov Sheinin, CEO of Economic Models, says Silicon Valley in the United States is an example of a high-tech center that developed along a traffic artery.

"In the U.S. high-tech went to the outlying areas," Sheinin said. "The highway ran from San Francisco to Palo Alto, and all the high-tech companies were built along it and outside the city. San Francisco is the main city and the highway to Palo Alto is like Highway 6, which doesn't go anywhere. Palo Alto is like Yeruham with high-tech."

But Sheinin points out that the influence of infrastructure is slow, and patience is necessary. He also believes that the infrastructure doesn't have to reach only existing places, but should create new opportunities for the future.

Highways create demand

"Usually you see the influence of a highway belatedly," he said. "If you look at the U.S., it can take 20 years." Here, he says, "it's the highway that creates demand. You don't put a highway in areas that are in demand. The demand comes to the highway."

Not every type of activity is suitable for being conducted outside the business center. Sheinin points out that "a plant that needs a great deal of space will move outside the city and its employees will be able to live in Tel Aviv and to travel outside the city. On the other hand, a financial firm that does not require a lot of space will work in the city proper and enable the employees to live in a rural area, such as Kokhav Yair, and to raise children at a reasonable cost. The more space a plant needs, the further away it will move. But sometimes the opposite happens. If there's a train that travels to Be'er Sheva at a speed of 200 kilometers per hour, it will be possible to live there in good conditions and to travel half an hour every day to the center."

Highway 6 is an example of the way in which transportation infrastructure can help in the development of employment centers outside the big cities.

"The development of employment centers or industrial parks along the highway is dramatic," says Ehud (Udi ) Savion, CEO of Derech Eretz, the franchisee that operates Route 6. "Today all kinds of groups are taking an interest in where it's worthwhile to develop employment centers, based on the future route of the highway." In the past decade high-tech employment centers have flourished along Highway 6 from Yokneam in the north to Kiryat Gat in the south. Although Highway 6 is not the only factor contributing to the growth of these centers, there is no question that it is a significant contributing factor.

The case of Yokneam

One of the cities that has enjoyed significant momentum thanks to Highway 6 is Yokneam, which was linked to the highway in 2009. Mike Sakah, the Yokneam city engineer, says that "Already in the 1990s the momentum of industrial parks began in Yokneam. In order to bring the factories and the industrialists at the time, we showed them future plans of Highway 6, and that did the trick." Today Sakah describes a second wave typical of the past three years, in which companies clearly choose to come to Yokneam because of access to Highway 6. As an example Sakah cites the Mivnei Taasiya (Industrial Buildings ) corporation, which received a plot from the municipality six years ago to build a complex of buildings for the high-tech industry. "In the three years preceding the opening of Highway 6 they didn't build a thing. But the moment the highway opened, already the following day you could see cranes and construction in full swing," he says.

Every day about 16,000 workers enter the three industrial parks in Yokneam; only 4,000 of them live in Yokneam. Sakah points out that the other 12,000 people come mainly from the center. For that purpose the municipality built an additional junction for those coming from the center. During peak hours, from 7:00-9:00 A.M. 6,000 cars arrive at the Yokneam Junction every hour from Highway 6. "Everyone gets into their car in Tel Aviv and arrives in Yokneam within 40 minutes. Some of the people told me: 'If I live in my home in Kfar Sava and want to get to an industrial park in Tel Aviv it takes me longer,'" says Sakah. Highway 6 is a significant factor in attracting so many firms to Yokneam, but the success was also due to steps taken by the municipality to accelerate bureaucratic procedures.

For example, the city now has a committee that grants construction permits within 12 weeks. "In national terms that's rare," states Sakah. There are 120-150 high-tech firms in the Yokneam industrial parks, many of which specialize in biotechnology, pharmaceuticals and medical devices. Two parks enjoy 90% occupancy, and in one the occupancy is 100%. The cornerstone is now being laid for an additional park, the Mevo Carmel science and industry park, which will provide logistical support for the high-tech industries and which is a partnership of Yokneam, Isifiya, the Megiddo Regional Council and Daliat el Carmel.

The Carmel Tunnels have a similar influence on the Haifa area. Inbar notes that Mediatech Hi-Tech, the college for the study of high-tech and technology located in the Check Post industrial area in Haifa, pays the Carmel Tunnels tolls for its clients coming from south of Haifa from the Netanya-Hadera-Tira area. "With the Carmel Tunnels we shorten the trip from an hour to half an hour, and then for someone from Hadera the Check Post is closer than Herzliya. There are few people who live really near their place of work, and if you can find a job today at a net distance of an hour on the road it makes no difference if it's a long trip in terms of kilometers or if it includes getting stuck in traffic jams.