Israel Approves Massive Plan to Boost High-tech Workforce

Program aims to close shortfall of engineers and other high-tech professionals by expanding educational courses, recruiting experts from overseas.

An employee works at a laptop computer at the Jerusalem Venture Partners JVP Media Labs, situated in the JVP Media Quarter in Jerusalem, Israel, on Wednesday, Oct. 21 , 2015.
Bloomberg

The Israeli cabinet approved a plan Sunday to reverse the worsening shortfall of high-tech personnel by spending 900 million shekels ($235.7 million) on education and training, and allowing up to 500 experts in the field to work in Israel.

The ambitious six-year program aims to ultimately increase by 40% the number of students pursuing engineering and other studies related to high-tech at the country’s institutes of higher education.

While the emphasis will be on training at the universities, the initiative will also work to upgrade skills and interest in tech among hundreds of teenagers through coding boot camps. The Israel Defense Forces, which is already the single-biggest training ground for the tech industry, will also pitch in by boosting the number of recruits serving in tech-related jobs.

“The main problem we have in the industry is meeting demand, and for that we need a trained workforce at the highest level,” Prime Minister Benjamin Netanyahu told ministers at the cabinet meeting.

Israel’s high-tech industry enjoyed its best year ever in 2016, with startup companies raising a combined $4.8 billion – an 11% increase over 2015 – even as the U.S. industry is showing signs of flagging growth. Israeli companies have carved out niches in some of the hottest areas of high-tech, including cybersecurity and self-driving cars.

But Israel’s colleges and universities haven’t been churning out engineers and software professionals at the pace the industry needs, pushing salaries higher and making companies less competitive globally, and threatening the industry’s continued growth.

A recent estimate by the Israel Innovation Authority estimated that the labor shortfall will reach more than 10,000 over the next decade.

“The Israeli economy has undergone a dramatic change with the rapid growth of the tech sector,” said Avi Simhon, head of the National Economic Council and part of the team that prepared the plan. “From a debt-ridden, crisis-plagued country, a strong and stable economy has emerged that produces technology that is sought the world over. The decision the government took Sunday aims to add fuel to the high-tech locomotive and remove obstacles.”

Eyal Toueg

In addition to increasing the number of engineers and software professionals, the program will also target segments of the Israeli population underrepresented in the industry – including women, ultra-Orthodox Jews and Israeli Arabs – with specialized programs.

Defense Ministry Director General Udi Adam will oversee military efforts to boost the number of tech jobs in the army, whose 8200 intelligence unit and Mamram computer unit have been major sources of technological talent over the last two decades.

The government said the 500 tech experts being welcomed to help fight the skills shortfall are expected to be mostly Israelis currently living abroad. However, it added that non-Israelis would be recruited as well.