The entrance of Arabs into Israel’s high-tech industry is one of the sector’s most significant changes over the past four years, one with major implications for both Arab society and for Israel’s economy at large.
Since 2008, the number of Arab engineers in high-tech has risen nearly 20-fold – from only about 350 men in 2008 to 6,600 men and women now, says Sami Saadi, founder and CEO of Tsofen, which works to integrate Arabs into Israel’s high-tech industry.
This is only 4.5% of Israeli high-tech engineers, who currently number 150,000, but the figure is quickly growing.
“Several years ago, Arab society was not part of Israel’s high-tech industry at all,” says Saadi. “In 2008, when we entered the field, there weren’t really statistics. We want from village to village and asked, ‘Where are the Arab engineers?’ We found some 350 people working in the industry. Even though there were 3,000 university graduates with relevant degrees. When we tried to find them, we found them working at the family bakery in Shfaram, working at the gas station in Rama or having opened their own computer stores in their home villages. We understood that there was great potential here that wasn’t being used.”
There were no Arab women in high-tech at all, he added.
But things have changed. Not only are there 6,600 Arabs working in high-tech, 25% are women, according to Tsofen’s data. An estimated 700 Arab engineers join Israel’s high-tech industry every year. Presuming they earn average salaries for the industry – 24,000 shekels ($6,760) a month – this means Arabs in high-tech are adding 200 million shekels to Israel’s economy every year, and that figure is only growing. In total, Arab engineers have contributed some 1.9 billion shekels to Israel’s GDP.
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The most notable change has been in academia, where the number of Arabs studying fields relevant to high-tech has been on a steady increase. Tsofen says there are 5,600 Arabs currently studying high-tech related degrees, including 4,500 at institutions in Israel and the remainder abroad. This is only 10% of all students in these fields, but the figure is increasing quickly. The Council for Higher Education reports that the number of Arabs studying for bachelor’s degrees in high-tech related fields has doubled in the past six years. They also account for a disproportionate portion of the increase in students studying these fields in general: The number of students in these fields increased by 1,477 in the 2017-2018 academic year, and of that increase, 544 of the students were Arabs.
“Over the 30-year period between 1984-2014, some 1,598 Arabs finished degrees in high-tech related fields. In the 2018-2019 school year, some 5,443 Arab students started studies in high-tech related fields,” says Saadi.
Saadi’s professional background is in accounting. He looks at matters in terms of their economic significance.
“If we’re looking at GDP of 350 billion shekels, and the Arab community is 20% of the population, but contributes only 9% of GDP – approximately 32 billion shekels – then clearly it could reach a contribution of 70 billion,” he says.
The Bank of Israel came to a similar figure when it reported a “lost economic potential of 30 billion shekels.”
Israel’s high-tech industry is growing and thirsty for manpower. It doesn’t really discriminate, and Hebrew language fluency isn’t a particularly relevant criteria – employees need to know how to write computer code. And yet, the change is a cultural matter as well.
“The change is beginning among Arab mothers who instead of just seeing their sons as lawyers, accountants, pharmacists or doctors, realize they can also work in high-tech. I don’t want to use the prime minister’s nasty language, but Arabs are heading into high-tech in ‘droves,’ it’s starting to become acceptable,” says Fawzi Shakur, manager of the new development center of fintech startup Personetics, which recently launched offices in Nazareth.
“As of 2008 there were nearly no [Arab] engineering graduates employed in their field, and this put people off from it,” says Hans Shakur, Fawzi Shakur’s cousin, and head of business development at Tsofen. “But we know what happened when Arabs headed in ‘droves’ into medicine, where they’re now 20% of all students and more than 50% of pharmacology students. The more success stories there were, people began to realize there’s something here.”
The capital of Arab-Israeli high tech is without a doubt Nazareth. Aside from car mechanics, the neighborhood of Wadi al-Haj is home to the offices of Tsofen; outsourcing company Galil Software, which employs 200 people; and the incubator NGT3, which invests in early-stage medical startups. Also nearby is a workspace rented out by WeWork competitor Regus, where Personetics’ engineers sit; as well as a small development center for Salesforce. Microsoft has offices one floor up in the same building. Nearby is a large Amdocs office with 200 workers, most of them Arabs; offices of chipmaker Broadcom; and several other start-ups. In total, some 50 high-tech companies have offices in Nazareth, employing some 1,300 engineers. Everyone complains about the traffic jams, but in that regard the situation is still much better than in Tel Aviv or Herzliya, the center of Jewish-Israeli high-tech.
Hatem Yazbek, manager of the Broadcom development center in Nazareth, says most of his employees are from the city or the surrounding villages. He’s hired high-quality workers away from employers such as Apple because the engineers were tired of the commute to Haifa, he says. Working in Nazareth, they can be home within 15 minutes.
Fawzi Shakur adds that local engineers see the location as an advantage and are therefore willing to work for less than they’d receive in the center of Israel.
“For years, the dilemma of the Arab engineer was whether to spend his life on the highways, or to spend his salary on rent in Israel’s center,” he says, noting that when he worked in Tel Aviv suburb Givatayim, he would commute three hours a day.
Shakur, Yazbek and Saadi are among the Israeli Arab community’s pioneers in high-tech. Yazbek recalls that when he finished his degree at the Technion-Israel Institute of Technology in 1989, he couldn’t find work in Israel. At the time, the only high-tech employer known for employing Arabs was Intel, and he didn’t manage to get hired there. Instead, he went to the United States on a Fulbright scholarship, found a job at an American startup that was bought by Intel, and then transferred to Intel Israel.
“We were 10 Arabs who completed degrees, and aside from me, everyone else is now a teacher,” he says.
Even now, Arab students are still not guaranteed a free pass into Israel’s high-tech community. As of 2008 only 20% of Arab graduates would find jobs in high-tech; now the figure is 58%, but that still means that 42% of graduates aren’t finding relevant work within a reasonable amount of time, noted Hans Shakur.
The problem is on both sides – with the applicants and the companies, states Walaa Ibrahim, manager of human resources development at Tsofen.
“Some of the companies don’t know how to respond to Arab candidates,” she states, noting that candidates with excellent grades and technical knowledge often fail the personal interview. “He’s only 21, without army experience, this is his first job or he seems too reserved.”