Israel experienced a steep rise in employment of close to 19,000 salaried employees during 2018 in the hi-tech sector, despite a decline of 3,000 employees in the pharmaceutical sector following the crisis at pharmaceutical company Teva. The software sector is responsible for a significant part of this increase – some 14,000 employees joined this field at startups, larger companies, and R&D centers.
Employment in the hi-tech sector is characterized by high productivity and high wages, making it critical for Israel to increase the percentage of those employed in the hi-tech sector out of the total number of employees throughout the economy.
The growth in hi-tech employment reflects the sector’s growing demand for employees in recent years and has been facilitated by a variety of government initiatives to increase the number of highly skilled workers in the field. This includes efforts by the Council for Higher Education to increase the number of students in STEM (Science, Technology, Engineering, Mathematics) studies and initiatives by the Israel Innovation Authority to diversify paths of entry into the hi-tech industry, including: Coding Bootcamp, which promotes advanced training in software and data science in non-academic settings; entrepreneurship tracks amongst the Arab sector, the ultra-Orthodox, and women; and other soon-to-be-launched programs.
In addition, the Israel Innovation Authority is working to promote “holistic” hi-tech companies – companies whose primary business activity is based in Israel, which employ a diverse range of employees in Israel in addition to programmers and engineers, such as marketing, support, operations, and production staff, among others.
The more “holistic” hi-tech companies that grow in Israel, the higher the potential for hi-tech employment growth and the more employees from a range of positions can be employed with higher salaries.
Steps taken by the Israel Innovation Authority in this field include: support for pilots and demos in Israel; support for startups transitioning from the R&D to the manufacturing stage, which is provided jointly with the Investment Authority at the Israeli Ministry of Economy and Industry; activities to increase growth funding for hi-tech companies in Israel; and activities promoting favorable tax and regulatory environments under which Israeli hi-tech companies operate.
The Israel Innovation Authority is also working to nurture future engines of growth in the hi-tech industry, investing approximately NIS 500 million annually in life sciences – a sector in which Israeli industry has made impressive scientific achievements but has yet to fulfill its full potential. A major program in this sector is expected to be launched this year.