Restarting the Start-up Nation

I gave my inner curmudgeon the night off. What follows are some thoughts on the Israeli job market devoid of sarcasm or cynicism. Your regularly scheduled dose of snark will return in the next post.

I joined Comverse in the late 1990s. At the time it was a largish company and a very promising one. I wasn’t particularly surprised to discover that roughly half of the people in the R&D department had names like Marina, Igor, Boris, and Arkady. Smart guy that I am, it didn’t take more than a month to figure out that we had lots and lots of immigrants from the former Soviet Union working with us. What did take me longer to figure out was the fact that more than anything else it was the sheer number of trained engineers that we had welcomed to the country that made the Start-up Nation possible. Take the naturally entrepreneurial Israeli spirit, add oodles of highly trained (formerly Soviet) engineers, mix in a little investment and out the other side comes a vibrant industry and economic growth.

The problem is that fifteen years later, we are running out of engineers.

Economy Minister Naftali Bennett seems to get it. In a recent talk with industrial leaders he spoke at length about the need to motivate students to pursue engineering degrees and away from say, law or business. Estimates from the Economy Ministry put Israel’s engineer deficit at around 7,000. Put another way, we have 7,000 open jobs for highly qualified engineers that we simply cannot fill.

My personal experience bears this out. About six months ago my company was looking for a couple of software engineers to deal with some tricky challenges we were facing and we simply couldn’t find the talent. Not in Israel at any rate. We ended up finding people in Romania and in Russia (figures). This wasn’t a case of us trying to save a couple of shekels by outsourcing to Eastern Europe. We really couldn’t get the work done here at any price. I would have preferred to give the work to local people but apparently that was just not to be.

If engineers are the engine that powers the Start-up Nation, then the Start-up Nation is about to stall. Time to give it a jump.

Here are two policy ideas for our newly installed Economics Minister and his friends over at Education, Defense and Treasury. Not all of these ideas are mine, although I’ll be happy to take credit for them. I do think they all have the merit of being within the realm of the feasible  policy changes that a responsible government might implement.

We really do have too many lawyers and more are being churned out by the universities and colleges with little chance for gainful employment. To Bennett’s list I would add that we have too many business school and communications graduates (and I used to teach these people, so there). I don’t really get the appeal to the prospective student, especially those going for a bachelor’s degree in business. What exactly do they expect to get out of it? A job? Seriously.

For colleges, especially the private ones, business and law programs are very attractive. They are popular and they are cheap to run. Sure, the college still needs to pay for the instructors but other than that there are hardly any costs like expensive labs, materials, etc. And quite frankly, if some of the graduates are sub-par all that happens is that down the line we get bad advertising on TV or another gasbag lawyer… and we’re already used to both of those. The colleges and universities run these programs like cash cows; they really are very, very profitable for them.

So, first suggestion:  for every ten graduates in law, business, communications and such each college must produce one, count ‘em, one engineer.

I’ll even go so far as to make it easy on the colleges. They can produce any kind of engineer that they very well please: chemical, software, hardware, civil. No matter, as long as it’s a proper engineer. More help? Very well. Colleges would be able to pool resources to set up a school or schools of engineering. Obviously setting up a whole engineering department to comply with this idea would be horribly expensive for any single college. Why not allow them to set up a single engineering school for all of them? The students would sign up through this or that college but attend school together and each one would only count towards the quota of  his or her own college.

In practical terms I’m thinking it would take a year to pass the law, another year to write the proper administrative rules, another two years for the school to be up and running, and another year just to be safe. In five years we could start training engineers at a decent clip.

Second proposal. The IDF has had a program for years commonly known as “atudah” (in Hebrew). The dictionary tells me that “atudah” translates as ‘reserve’ (eg. keeping some of your power in reserve) although the actual meaning of the program is quite the reverse, as the word shares a root with ‘future.’ Atudah participants are all smart kids with good academic credentials and they are allowed to attend university and graduate before they serve in the armed forces. In theory at least, they can only do this if they go and study something that the defense forces would need. After they are done with their studies they go into the military, serve their mandatory term and then they serve something like four more years as officers with salaries and benefits and whatnot. Throughout this time they would be working in some capacity that makes the most of their studies. So, if for example you were to study chemical engineering, you might find yourself working for a number of years on defense systems that would prevent the spread of Sarin gas in case of an attack. Something like that. There are some problems with this program (and with my overly simple description), but in principle it is a very good idea.

The sticking point of course are those extra four years at the end of the program. I get it that the IDF needs the time to really make the most out of these people, but four years is an awfully long time, especially when you are twenty-two. So here is my policy suggestion:

Drop the four years to two, but only for engineers. If we do that then we would need a year to pass the law, a year to implement it, and then two to three years for our first engineers to start streaming into civilian life.

In terms of legislation, these are modest proposals. They do not cost the taxpayer much and their upside is enormous. They also have the benefit of not being coercive, lots of carrot and no stick.

Could they be implemented? Maybe. I don’t know that Ministers Piron, Lapid, Bennett, and Yaalon could actually get their heads together, legislate this properly and make the bureaucracy move. If Israel is to remain the Start-up Nation we are going to need a lot of engineering talent and Igor and Marina and Boris are already here. It’s time to get serious about developing some local talent.


About the Author
Benjamin Levy is the CEO of IsItYou, Ltd; an Israeli start-up specializing in mobile face recognition; He was born forty-six years ago in Mexico City and lived for a long time in California. Today he is married to an Israeli and the proud father of three. To date, he’s managed to fit in getting three degrees, launch a democratic school, hold eight proper jobs, completed over eighty consulting assignments, and worked in 61 countries, and fourteen of the world’s time zones at last count; His favorite line of poetry comes from Rainier Maria Rilke’s Letters to a Young Poet: “to have patience with everything unresolved in your heart and to try to love the questions themselves as if they were locked rooms or books written in a very foreign language.”