Analysis

Is High-tech the Dream Career Path for Israelis That It’s Cracked Up to Be?

It’s not so clear cut, as newly released employment and education data show

High Tech officies of Kaminario, January 11, 2017.

A relative of mine recently was undecided about what course of study to pursue in high school and asked me for advice. Without hesitation, I answered computers, mathematics or physics,even though I have no background in any of them.

None of that interested him. What about biology? I asked. That also didn’t interest him. When he finally decided on something else, I encouraged him, saying something like, “It’s great to pursue something that really interests you.” But deep down, I was saying to myself, “It’s a pity that he won’t be going into high-tech.”

Former Education Minister Naftali Bennett’s relentless campaign for high schoolers to take the hardest five units of math and the constant stream of news about startup buyouts has affected everyone in Israel, including me. The attempt to create such a pipeline failed. The idea of creating such a pipeline toward specific career paths in Israeli sociology usually carries a negative connotation in Israeli sociology - students from the country’s poorer areas are directed toward vocational education, or girls are encouraged to pursue so-called feminine areas of study, putting them on a path that will determine their social status for the rest of their lives.

Yet, directing students toward science, technology, engineering and mathematics (STEM) studies as well as army service in intelligence and technology units is also a form of pipeline. The goal is to ensure a smooth pathway to high-tech. Here, you don’t hear complaints about deciding young peoples’ lives for them, because tech is the future, it’s rewarding and, who knows, you might become a millionaire.

Conventional wisdom used to be that if you wanted job security, you should go for a civil service job. If you want pay and prestige, then enter a profession like medicine, law, accounting or engineering. These days, however, it’s just high-tech.

It offers high pay, an opportunity to be creative and entrepreneurial, membership in a global community and of course the possibility of striking it really rich. Job security isn’t a problem either; when one startup shuts down and fires its staff, there’s another one waiting to hire them.

The reality is not quite so rosy. Tech is volatile by nature – it evolves quickly or often unpredictably. Trends change, startups are launched and shut down, projects end, and even the best employees can find themselves unemployed overnight.

Doctors enjoy job security and can count on employment until retirement age, and even beyond that point, given the shortage of doctors these days, if they so choose. In tech, once you reach age 50, your attractiveness as an employee is sharply diminished. Moreover, if you’re not male and secular, you won’t find a lot of people like yourself at work.

Numbers reflecting all of these characteristics of Israel’s tech industry came out last week, thanks to a groundbreaking study by the Central Bureau of Statistics. Conducted in 2017-18, it surveyed people who had begun their bachelor’s degree seven years earlier. It found that 53.8% of those who studied high-tech subjects, like electronic engineering, were earning more than 13,000 shekels ($3,700) a month after taxes, compared with just 12% of those who studied other subjects.

These figures are somewhat misleading, as the CBS compared tech jobs to everything else, so that banking, medicine and jobs at government monopolies, all of which pay very well, were lumped together with minimum-wage jobs.

In any case, tech does pay well for everyone in it. The rate of salaries paying more than 13,000 shekels a month for male techies was 57.7% but even for women it was 41.3%. Interestingly, the rate for people who had studied the more general STEM fields was just 22.5%. However, for those who work in tech even though they didn’t study a tech-related subject at college or university still enjoyed high pay – 37% of them were making more than 13,000 shekels a month.

The lesson the latter figure teaches is that startup nation isn’t quite the exclusive club of engineers and army tech unit alumni it’s often made out to be. On the other hand, the industry employs only 8.3% of the Israeli workforce, a figure that hasn’t grown in recent years.

One reason for that is that Israeli startups tend to sell themselves to multinationals rather than grow as independent companies and take on more workers. The multinational companies that do operate in Israel generally confine themselves to research and development operations rather than open plants or marketing offices. These R&D centers employ engineers almost exclusively.

That might explain why the best path to a high-tech career is not to study literature or sociology but to keep to the obvious choices of computer engineering, computer science and information systems. The CBS survey found that between 80% and 90% of graduates in those fields were working in high-tech.

Among those with degrees in fields like physics and mechanical engineering, the rate was 35-50%. For graduates in economics, business administration or psychology it was no more than 10%.

What’s missing from the CBS survey is any indication of job security. Michal Dan Harel, CEO of the job placement firm Manpower Israel, estimates that the average high-tech employee changes jobs once every three years and will end up working for 12 different employers over his or her lifetime.

The phenomenon of firings and layoffs is so widespread that a steady government job over time may end up paying better, but just try convincing parents and teenagers of that.