Diversity: How the ‘start-up nation’ identity can meet its moment of reckoning head-on

With the COVID-19 pandemic creating unprecedented health, economic, and social challenges that are best solved by cutting-edge technologies and the entrepreneurs behind them, the present day should represent a defining moment for Israel’s “start-up nation” identity.

Indeed, it is — but not in the way conventional wisdom would dictate. At this time when the innovative strands in the Israeli DNA seem poised to shine strikingly bright on a global stage, Israel’s famed start-up scene could actually be losing some of its luster.

Less than one percent of businesspeople actually associate Israel with start-ups, according to a new survey conducted by Vibe Israel and Bloom Consulting. Online searches for the term “start-ups in Israel” have seen a stagnant 1% growth rate since 2016, while the same searches have surged 71% in Estonia and 30% in South Korea. The origins of Israel’s big-name tech brands are also relatively unknown, with only 16% of respondents correctly identifying Waze and Mobileye as hailing from the Jewish state.

It all begs the question: Does the start-up nation brand have an image problem? As it turns out, image just scratches the surface of the issue. On a more practical level, the vitality of Israel’s start-up scene and the country’s broader technology sector face a growing crisis spanning both human and financial resources. The IVC Research Center found in March that early-stage investments in Israeli start-ups were down 30% in the first quarter of 2020, even before the pandemic’s intensification in Israel and worldwide. Simultaneously, Israel is failing to satisfy its rising demand for talent in the technology professions, with the Israel Innovation Authority reporting earlier this year that there were 18,500 open positions in high-tech as of July 2019, up 8% from the same period in 2018.

As I have argued before, academia is more often than not the primary source of the solutions to pressing employment and industrial challenges. In this case, Israel’s high-tech conundrum is rooted in a dearth of diversity.

First, there is the issue of perception. Israel’s unemployment rate for Haredi men consistently hovers around 50%, which feeds disharmony by creating the widespread sentiment that Haredim lag behind in their contributions to society. The Haredi community’s share of the total Israeli population is expected to skyrocket from 9% today to 35% by 2065, according to a Tel Aviv University study. In the long run, the failure to incorporate such a crucial demographic sector into the workforce will linger as a blemish on a start-up nation story that otherwise has all the qualities of an inspiring fairytale.

Second, there is the issue of reality. And here is the stark truth: Without diversifying its high-tech workforce, including by increasing opportunities for the Haredi community, Israel will continue to fall short of that sector’s fast-growing personnel needs — and consequently, the start-up nation’s global output will suffer at the worst possible time, when the world can use Israeli ingenuity and problem-solving more than ever.

This is precisely why the Jerusalem College of Technology (JCT) is committed to doubling down on its mission to drive the growth of Israel’s high-tech industry through expanding and diversifying the sector’s pipeline of young professionals. We accomplish this objective by designing an array of specialized programs that empower underserved populations through high-quality academics, while maintaining sensitivity to their religious and cultural needs.

JCT’s Haredi graduates have attained an 89% employment rate, far exceeding the aforementioned roughly 50% employment rate for Haredi men throughout Israel. Through our Reuven Surkis Program for Students from the Ethiopian Community, young Ethiopian men and women attain a 95% employment rate. 53% of all the college’s computer science students are women, which is 18% higher than any other Israeli academic institution. All of those demographic sectors are sources of talent which the Israeli workforce can no longer afford to leave untapped.

The start-up nation must not shy away from this moment of reckoning. Fostering greater diversity in the high-tech sector, starting with higher education, will enable Israel to address the challenge head-on.

About the Author
Stuart Hershkowitz is the Vice President of the Jerusalem College of Technology.
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