Israel cybersecurity sector hamstrung by shortage of labor, report says
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Israel cybersecurity sector hamstrung by shortage of labor, report says

The industry needs 800 new workers a year to keep up pace of growth, data shows as Cyber Week kicks off in Tel Aviv; the field employs 20,500 people

Illustrative. Hackers/cybersecurity (iStock by Getty Images)
Illustrative. Hackers/cybersecurity (iStock by Getty Images)

Israel’s cybersecurity industry is starved for workers, with the industry in need of 800 new workers a year in order to keep up its pace of growth. Manpower is the main challenge facing the sector, a new report shows.

Ninety percent of managers surveyed by the IVC Research Center for a report on the state of Israel’s cybersecurity industry said that a shortage of workers is the most significant problem the sector is facing today, with competition for skilled personnel coming mainly from the foreign R&D centers operating in Israel.

IVC compiled the report for the Israel National Cyber Directorate ahead of Cyber Week, which opened this week at Tel Aviv University, with cybersecurity experts, industry leaders, startups, investors, academics, diplomats, and government officials from all over the globe convening to discuss the challenges ahead.

The shortage of workers in the industry reflects a general malaise in the nation’s tech industry, which is lacking some 15,000 skilled workers annually, mainly software engineers and data scientists. This shortage is causing local salaries to surge and is pushing firms to seek workers abroad, according to a report by Start-Up Nation Central and the Israel Innovation Authority published in December.

By the end of 2018, Israel had 752 cybersecurity companies, of which 421 were active, 213 had ceased to operate and 118 had been acquired, the IVC-Cyber Directorate report said.

As of end 2018, the industry employed some 20,500 people, half of whom worked for private sector startups. Some 4,500 were employed in R&D centers set up by foreign firms, and some 5,900 were employed by the public sector. The figures did not include those who work in cybersecurity at defense firms. The rate of employment in the cybersecurity industry has grown by 12% annually since 2015, the report said.

In the past five years, the cybersecurity industry has raised $3.9 billion, and in 2017 exports totaled $5.5 billion-$6 billion. Revenues from cybersecurity startups in Israel are estimated to be $500 million-$600 million for the last two years. In the US, Israeli firms account for 34% of the data security market, and in Europe 27% of the network security market and 17% of the data security market, the IVC-Cyber Directorate report said.

Investments in cybersecurity firms in Israel crossed the $1 billion mark for the first time in 2018 as interest by foreign investors surged, a report by Start-Up Nation Central, which tracks Israel’s tech industry, said in January.

Israel’s cyber industry is second only to that of the US, taking 20 percent of the overall venture-backed cyber investments worldwide, according to an analysis of PitchBook and Start-Up Nation Central databases.

As the world becomes more digitalized and home and office gadgets smarter, the threat of cybersecurity breaches grows. The global cybersecurity market is expected to grow to $248 billion in 2023, from some $153 billion in 2018, according to data firm MarketsandMarkets.

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