Israel boosts funding for ultra-Orthodox tech entrepreneurs
A similar program will be announced for Arab Israeli entrepreneurs, Innovation Authority says; aim is to increase participation of minorities in booming startup scene
Shoshanna Solomon was The Times of Israel's Startups and Business reporter
Israel’s Innovation Authority, in charge of setting out the nation’s technology policies and funding startups in their earliest stages, said it was expanding its support for ultra-Orthodox tech entrepreneurs, to make it easier for them to access funding and integrate into Israel’s booming tech scene.
A statement from the Ministry of Economy and Industry said that under the revised terms of a program that has been in force since 2014, technology enterprises at least 33 percent-owned by ultra-Orthodox entrepreneurs will be eligible for funding for two years: 75% of their R&D expenses for the first year and 70% for the second. The original program only provided funding for one year.
These startups will also be eligible for grants of NIS 2.5 million ($682,000) in the first year and of up to NIS 4.5 million in the second year. The program originally granted NIS 2.3 million in the first year alone.
In addition, the startups will be taught how to “maximize resources and company success,” the statement said. This includes increasing their exposure to Israel’s tech environment and getting entrepreneurial training, and the possibility of using some of their grant money for business or marketing consulting.
The Innovation Authority is working on a similar program to provide funding for Israeli Arab entrepreneurs, under terms that will be the same as those of the ultra-Orthodox. The program will be announced “in the near future,” Naomi Krieger Carmi, the head of the societal challenges division at the Israel Innovation Authority, said in an email.
As multinationals flock to Israel to set up research and development centers to tap into Israeli technologies, they compete with local startups and foreign peers for talented engineers and programmers. And as a shortage of these skilled workers looms over the next decade, Israel is looking to tap into populations — women, the ultra-Orthodox and Arabs, who have been left mostly at the sidelines of the startup nation boom.
Arab Israelis’ education is inferior to that of the general population as their schools get less funding, and the fact that they teach in Arabic puts their students at a disadvantage when they venture into university or the workforce, according to the book “Israel’s Technology Economy.”
And while the ultra-Orthodox community emphasizes study and education, students’ focus is almost exclusively geared to religious texts, and they thus don’t get much exposure to the core curriculum studies of math and English that would help them get well-paying jobs, the book says.
These two populations, which are the fastest growing in Israel, are also the poorest.
“Minority populations in Israel are very under-represented in the Israeli ecosystem,” said Krieger Carmi in a phone interview. Arab Israelis, who make up some 20% of the Israeli population, account for less than 3 percent of the tech workforce, she said, while the ultra-Orthodox population accounts for just 1% of the tech workforce.
“The Israel Innovation Authority’s program to support startups in the ultra-Orthodox sector is an additional tool in the government’s policy to increase the number of people employed in the high-tech industry and to create a supportive environment for startups via government funding,” Minister of Economy and Industry Eli Cohen said in a statement announcing the revised funding plan.
Since the program to help integrate ultra-Orthodox populations into the tech sectors started, the authority has paid out some NIS 25 million in grants to entrepreneurs, the statement said.
