'High-tech Managers Prefer to Work With Their Army Buddies'

High-tech is famously at the forefront of Israeli industry, and it also reflects the overall situation of Israeli society: Arabs are a minority in the field.

A minority? They number just a few hundred among the tens of thousands of people employed in the sector.

The disparity begins with education. Not only do fewer Arabs than Jews pursue a higher education: of those who do, only a minority learn technological professions.

According to a report by Sikkuy, the Association for the Advancement of Civic Equality in Israel, the percentage of Jewish students aged 20-34 is three times that of Arabs: 9% as opposed to 3.3%. And the gap begins earlier: Education Ministry statistics show that 50% of Jewish high school students earn matriculation diplomas, compared with 32% of Arab students.

The Arab populace in Israel suffers from a particularly high rate of unemployment, and low participation in the work force, especially among women. Arabs make up 11% of Israeli workers, though they number about 20% of the population.

Only 18.5% of Arab women are employed.

Most Arabs work in low-paying, non-professional jobs in construction and agriculture. Arabs are nearly entirely absent from prestigious and lucrative sectors of the economy such as high-tech, banking, insurance, electricity and water.

According to Tsofen - High Technology Centers, which is dedicated to increasing the number of Arabs working in technology, about 40,000 Jews completed technological degrees between 1996 and 2006, and 80,000 are currently employed.

In the Arab sector, the proportions are quite the reverse: 2,200 students completed such advanced degrees during the same period, and only about 500 are employed in the field.

It is estimated that there are 5,000 potential Arab employees at this time, and the potential over the long term is 20% of the Jewish workforce, or about 15,000 Arab high-tech workers.

"The high-tech industry is extremely homogenous. Managers prefer to work on projects with their army buddies," says Smadar Nehab, a founder of Tsofen and former high-tech entrepreneur who has held a number of positions at EFI, Verisity and Mercury. "In addition, Arabs don't have the know-how to integrate themselves into high-tech culture," she says. "They don't know how to write resumes or be interviewed. The situation is similar to that of scientists who emigrated from the former Soviet Union 15 years ago. Then, too, it took time for them to be brought into the industry, and at first many worked at jobs that did not befit their talents.

"Much of the Israeli high-tech industry is located in the center of the country, while Arabs live in the north. A young Arab who is married and raising a family can't live in the center. The companies prefer that employees live close to the work place," Nehab says.

Nehab hopes that Tsofen will accomplish its goal of bringing more than 1,000 Arab graduates into high-tech industry.

In order to accomplish this, Tsofen is establishing centers in Arab cities and towns; the first operates in Nazareth, offering technological training and teaching Arab engineers the ways of Israeli high-tech culture. The approach appears to be proving itself with an 85 percent placement rate - 35 of 40 graduates are working in the industry, and the number of jobs available has risen to 100 over the past year and a half.

Two large companies in Nazareth providing them employment are MIT Soft and Galil Software. A third, Moah, an outsourced branch of the Dutch company BANN, announced this week that it would close its doors. Another company operating in the city which is likely to close is Agam-Mehalev, which employs 30 people, some of whom are Arab high-tech workers.

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Nehab: "Tsofen is not here to solve the larger problems of Israeli society. We believe that everyone benefits from what we do - Arabs and the State of Israel. The Arabs are citizens too, and everyone has an interest in equal opportunity. The last Organization for Economic Cooperation and Development report found Israel deficient in the inclusion of Arabs in employment."

Why are Arab Israelis unsuccessful in high-tech interviews? Does the fault lie with personnel managers?

"I don't think so. They are willing, but the problem starts at the professional interview stage. I know excellent Arab job candidates who did not get past their interview. Why? When I asked a company development director why Arabs often fail the interview, he told me that they are childish, do not answer questions well and do not seem like team players suited to their projects. I believe that just as a Russian interviewer deals with Russian candidates, they need to introduce Arab interviewers as well. As soon as there is a critical mass of candidates, the number of Arab students who turn to high-tech will increase. And the number of students will change as soon as they feel they have equal job opportunities."

Might a development director decide not to accept Arab candidates because he doesn't want them to take jobs away from Jews?

"The workers employed by global high-tech companies today come from a variety of backgrounds. I don't think company directors think this way. We are not talking about a competition between northern employees and the center, but competition with Eastern Europe. These days every start-up that employs 40 people turns to Eastern Europe because it cannot find enough workers here and costs there are lower."

Yosi TurKaspa, the chief executive officer at New Generation Technology, a high-tech (and biotechnology) incubator company that works out of Nazareth, believes that there has been a recent awakening regarding startup initiatives in the Arab sector.

NGT was founded in 2002 as part of a national incubator program. It boasts that it is the first technological incubator in Israel that is jointly owned by businessmen from both the Jewish and Arab sectors.

"We have more Arabs than Jews in our [technological development] incubator," TurKaspa says.

"The ten companies founded in the incubator so far are Arab enterprises. Except for two, all [of the people] involved have doctorates or post-doctorate educations," TurKaspa adds.

The NGT endeavor specializes in the life sciences, TurKaspa says.

"There are not a few Arab entrepreneurs who came to us from the areas of health-care, biology, chemistry and medicine - many more than from Internet and electronics. It is easier for them to come to us, because the Arab sector does not have a culture of investment, risk capital and angels [private investors]. Arab start-ups can't apply for risk capital since they have not yet reached the funding stage."

In his view, technological incubators are the perfect solution for the Arab sector, which has yet to develop the networking ability of Israel's Jews.