During his recent visit to Israel, OECD’s Secretary-General Matthias Cormann emphasized the challenges facing Israel, including the widening socio-economic gaps resulting from a “two-speed economy.” The OECD report on Israel for 2021 states that inequality in Israel is higher than in most advanced economies.
Unfortunately, on the issue of inequality and two economies, there has been little progress since Israel joined the OECD. “Israel: a divided society” is the title of an OECD report published 12 years ago, in 2010.
A critical element needed to close the gap between these two economies is the participation of the Arab population in the labor market and improving their skill levels which lead to higher compensated jobs. In this regard, there is still a long way to go. For example, one indicator from the Equal Opportunity Commission Report (May 2021), reveals that Arabs are about 20% of the working-age population, while they are only 11.5% of the workforce with academic degrees.
Israeli Minister of Foreign Affairs and Alternate Prime Minister, Yair Lapid, called for a dramatic increase in the number of Israelis employed in the hi-tech sector and positioned the bar at 1,000,000, a very ambitious number. A more modest, but realistic, goal was set by Minister of Innovation, Science and Technology Orit Farkash-HaCohen, who aspires to increase the level of employment in the hi-tech sector from about 12% of employed persons, in 2021, to 15%, reaching close to 450,000 jobs by 2026 (in five years).
Both Lapid and Farkash-HaCohen are focused on under-represented groups, including the Arab population, for which the goal is to triple their participation in the hi-tech sector by 2026.
The problem is that, despite very good intentions, the integration of Israeli Arabs in the hi-tech sector is not even close to reaching its potential.
A comprehensive report published by the Ministry of Welfare and Social Affairs in 2020 shows that the percentage of Arabs employed in the hi-tech sector is less than 2%. Although in absolute terms, the number of Arab employees in the hi-tech sector more than tripled from 2012 to 2018 (from about 2,000 to above 6,000 according to an Israel Innovation Authority Report), the percentage is still significantly less than their participation in the Israeli workforce (about 14%).
Much has been said and written about more inclusion of Arabs in the hi-tech sector. Tsofen, a nonprofit organization established in 2008, whose mission is to increase Arab participation in the Israeli hi-tech ecosystem, has done a great job and contributed significantly to the progress that has been achieved.
The question is how to further accelerate this process. In 2012, only 30% of Arabs with relevant academic degrees were employed in their professions. By 2017, the percentage had doubled to 60%, which is certainly a positive development, but there is still much room for improvement. It is very frustrating when those who have invested much time and effort in their education are unable to find a job in their profession. Such failures exacerbate the perception of discrimination and lack of equal opportunities.
One explanation for these failures is the geographical mismatch between the region of residence and the concentration of hi-tech jobs. Most of the Arab population (60%) is located in Haifa and the Northern region, while more than 60% of the hi-tech jobs are located in Tel Aviv and the Central region. It is unfortunate that a distance of 130-150 km is such a stumbling block. The fact is that many Israeli hi-tech companies of all sizes employ work force abroad. An employee from abroad can only meet in person with his/her colleagues a few times a year, at most, not even taking into consideration all the costs associated with travel (when/if international travel is even possible). Allowing an employee who lives in the north of Israel to work from home would seem to be a much more logical decision. This employee would be able to get to Tel Aviv in a couple of hours, when necessary.
Another less tangible but very significant barrier between Arab professionals and jobs in the hi-tech sector is that Israeli society still needs to overcome decades of animosity, recognize the inevitable fact that Jews and Arabs share the same space and, finally, accept that success for all requires acceptance and inclusion.