A New Innovation for Startup Nation: Employing Israeli Arabs

Smadar Nehab is the founder of Tsofen, a nonprofit that aims to make Nazareth as crucial to the local high-tech scene as the more trumpeted parts of Silicon Wadi.

Eyal Toueg

Smadar Nehab is the founder and executive director of Tsofen High Technology Centers. Founded in 2008 and located in Nazareth, Tsofen is an Arab-Jewish organization promoting the full integration of Arab citizens into Israel’s high-tech and startup industry, through employment and the creation of high-tech centers in Arab towns.

After the last Knesset election, Nehab and cofounder Sami Saadi sent Prime Minister Benjamin Netanyahu a letter calling on him to assist them in their work, especially after his call for supporters to come to the polls because Arabs were voting “in their droves.”

“Mr. Prime Minister, we call on you to lead the integration of the Arabs with high-tech,” they wrote. “In doing so, you will take a significant step to rescue the industry, and create a new connection between Jewish and Arab societies in Israel. At this time, the Israeli economy must integrate Arabs into high-tech, and no excuse will help. The economic, political and social benefits are clear.

“The more Jews and Arabs work together in Arab cities, the more an infrastructure will be created that will make boycotts no longer an option,” they continued. “You can boycott an Arab town if all you do is go there to eat hummus, but not if you work there.”

In an interview with TheMarker, Nehab says that although Tsofen didn’t hear back from Netanyahu himself, the Finance Ministry called and asked to meet.

How many workers are needed in high-tech?

Smadar Nehab: “We estimate that thousands are missing, and this number will grow. The National Economic Council is talking about 40% of the young people in 2029 being either ultra-Orthodox or Arab, so it’s clear we need to start working on it now.”

What does Tsofen do?

“Tsofen’s goal is to put Arabs to work in high-tech. Since its inception, Tsofen has contributed to the growth of Arab engineers in Israel, from 300 to about 2,200 at the end of 2014 – and at least another 100 have joined since then. It helps place candidates and runs training courses in Arab towns throughout Israel. It is also working with the government to develop industrial areas in Arab towns.

“When we started, there were only 350 Arabs working in an industry with 300,000 employees. I said that it wasn’t logical – after all, everyone was born the same. I was told that Arabs could be “at most doctors,” as if a doctor is inferior to working in high-tech, and as if it is something genetic.

“It was really a situation of coming and saying that the emperor has no clothes. I led a startup at the time. We had a shortage of good engineers and I thought, why not expand it to the entire industry, since in principle Arabs receive the same education as Jews. Everything can change. The environment of entrepreneurship and investment has not yet completely entered Arab society, and I thought that if we continued to push, it could happen. The economic need is stronger than the tendencies of a large part of Israeli society.”

What are your main achievements so far?

“The percentage of Arabs in high-tech has grown from about 0.5% when Tsofen started to about 2% today. In Nazareth, for example, there are some 600 Arabs working in software, compared to 30 people who worked in just one company when we started. Tsofen is responsible for placing 550 of these people, and we have another 380 who have graduated from various technical training courses. The field of maintenance projects and service providers is growing nicely – the second tier of high-tech. And, of course, there are also Jews: At Galil Software in Nazareth, 15% of the workers are Jewish; and at Amdocs’ branch in Nazareth, even more.”

The new Silicon Wadi

Nazareth has emerged as the Israeli-Arab Silicon Valley. The number of high-tech jobs in the city of 80,000 rose from only 30 in 2008 to over 400 in 2013, reports Tsofen, with nearly one-third filled by women. In the same five-year period, the number of companies operating in Nazareth rose from one to 12.

Why don’t we see more Arabs in the offices of high-tech companies in Herzliya Pituah and Ramat Hahayal?

“Because here in Israel we don’t know Arabs, and that’s why we’re afraid of them. They put an invisible screen around the Arab communities, and when they look for employees they only see Kfar Sava and Ra’anana, and so on. We say that in addition to a college education, it’s important for them to have practical experience, and if they don’t – they have a problem. The high-tech sector loves the graduates of the army’s central computer units – who didn’t study much but have practical experience.”

So what, you’re holding résumé-writing workshops?

“Tsofen doesn’t just help people write résumés, it also conducts its own training course – which are four times a week for three months. The students learn the technology and gain experience, mostly in developing Mobile and Internet apps. The courses are built to imitate the process of founding a startup. The students are college graduates who realize that the courses provide them with an advantage.

“Tsofen also has programs in the universities, where brings in representatives of high-tech companies who are making efforts to hire Arabs – such as Microsoft, which has been working hard for two years to hire Arabs.”

Do you see greater willingness among multinational companies operating in Israel to hire Arabs compared to Israeli companies?

“Absolutely. I think it’s more ingrained in them. High-tech provides hope, since the CEOs in the industry grew in the global market. Like me, they worked in Silicon Valley with Indian and Chinese workers, many of whom are Muslims and a minority are Christians. They learned employment diversity pays off economically and promotes an atmosphere of creativity. This multiculturalism contributes to innovation, something that companies such as Google invest in.”

So multinational companies are the ones that will make a difference?

“The big change at a national level won’t happen if there isn’t any industry in Arab communities, and only the government can do this. We need to bring companies to work there, provide transport – it is much cheaper to drive workers from the Israeli-Arab communities of Taibeh, Tira or Kalansua to Kafr Qasem than from south Tel Aviv.

“Take, for example, what is happening in Nazareth: Not only is the work closer to home, but there is a magnificent building there and good conditions. We have graduates who didn’t believe they would work in high-tech, certainly not in Nazareth. One of the graduates of the program recalled how he takes his son to work, and his son sees it as an option for the future. Twice a year we hold “Hackathons” for developers, and high-school students and programmers come. It adds adrenalin, it changes something.”

Do Arab mothers want a son in high-tech?

“One of our mentors – an Arab who works in a very senior position at Intel – said in 2012 that we needed to do something, because every junior doctor in Afula was more respected than development managers responsible for dozens of employees at Intel – and no one knew what they did, except make a good salary. It was taboo. Today, it’s different.

“At the last Hackathon, 130 high-school students from 20 schools participated. The Council for Higher Education is changing its policy, too, in order to help Arabs who study. It’s really sinking in.”

Israeli high-tech is controlled by an elite of former members of the IDF’s 8200 intelligence unit. Isn’t the problem to connect Arabs to these circles?

“Yes, that’s exactly the problem. Our starting point is that the split is enormous, and therefore it’s hard to bridge. All the attempts to focus on placement for Arabs in high-tech never made the breakthrough.

“What makes us special is that we work directly with the government in order to convince them to bring high-tech to Arab communities. In Nazareth it was a fantasy, but today there’s a small industrial park with 600 employees at Amdocs, Broadcom and Galil Software. They receive benefits as in every town in the periphery.

“At first, a building here and a building there in which high-tech companies worked was enough. But it’s clear that it’s preferable to build a high-tech area. Slowly, the companies discover there is potential in the north and a pool of talent – which those operating only in the center of the country miss out on.

“One of the reasons Broadcom chose Nazareth is that it gives them a competitive advantage over Mellanox, which is in Haifa and Yokne’am, since the workers are very near to their homes. Of course, the companies have a great number of questions about “Arab culture,” and worries at the management level.”

What are they concerned about?

“There’s a fear that employees wouldn’t be willing to stay late or fly overseas a lot. At Amdocs, they work 24/7 and travel a lot. So they asked the women – who are the great potential for employment with the Arabs – and found they can fly, too.”

You’re leaving Tsofen after seven years.

“Tsofen is identified with me and I want to let it grow beyond me, since I want it to make a huge change. I’m a startup person to the core, and I have never worked in one place more than three years. Tsofen is the place I worked the longest. I feel what we’ve done needs to be taken and formalized – like a startup, which in the first stage reaches proof of feasibility, and then needs to increase its sales. Now I prefer that other managers do it.”