Amid a chronic shortage of tech professionals, the Israel Innovation Authority (IIA) on Sunday announced a new initiative that would provide funding to startups and projects working to help train skilled workers for the high-tech industry.
The initiative is meant to provide incentives for professional training in a variety of high-tech fields with a focus on the integration of candidates from Israel’s underrepresented communities in the tech sector, including ultra-Orthodox and Arab professionals, women, workers over the age of 45, and those who live outside Israel’s central areas. There will also be an emphasis on potentially drawing skilled workers from abroad.
Dubbed the “Human Capital Fund program,” the IIA will offer funding of up to 70 percent for “innovative and groundbreaking models” that will lead to more professional training, retraining where required, and the placement of candidates in tech jobs.
The IIA, in charge of setting out the nation’s tech policies and fostering the tech ecosystem, will back two types of grants: one for early-stage initiatives with a requested budget of up to NIS 1 million ($310,000) for which the agency will fund 70% of the project, and a second for growth-stage companies with a requested budget of NIS 15 million ($4.6 million) for which it will provide 50%, or 70% in “exceptional cases.”
The program will focus on a few areas, including placing “juniors,” or people just starting their tech careers, in the industry; boosting the tech skills of people who previously worked in the tech sector to allow their re-integration; helping university graduates in related academic fields translate their background to high-tech professions; working to integrate people from non-academic training programs; and recruiting from abroad, in particular immigrants, those eligible under the Law of Return, returning Israelis, and foreign experts.
Proposals will be assessed according to their ability to recruit skilled human resources into the industry, the cost/benefits of the program, its “innovativeness,” and the ability to recruit partners and grow, the IIA said.
IIA CEO Dror Bin said in a statement that the Israeli high-tech industry “demonstrated strong resilience during the corona[virus] crisis, thanks to the ability of the industry to quickly respond to a new work environment and uncertain conditions.” Moreover, the sector broke new records in raising capital, “significantly increasing the need to recruit skilled workers, thus intensifying the problem of a chronic shortage of workers in the industry.”
Bin said the IIA considers the shortage of workers to be “the most significant challenge for the continued rapid growth of the Israeli high-tech industry and for preserving its international leadership and competitiveness,” adding that the agency will continue working together with the industry “to create beneficial, innovative solutions that will improve its current situation.”
Innovation, Science and Technology Minister Orit Farkash-Hacohen also said the shortage was “a national challenge for the Israeli economy as a whole.” She called the new IIA program “an important step in addressing the strategic challenge in the short-term over the coming few months,” and noted that it joins a series of steps that the government has already taken, including a five-year plan worth over NIS 500 million ($154 million) to boost high-tech and science programs in Israel’s Arab community,
Diversity is key
According to the latest Human Capital Report released in April by the Israel Innovation Authority and Start-Up Nation Central, there were 13,000 open positions in Israel’s tech industry at the end of December 2020. That figure was 30% lower than the number of available jobs in June 2019, when the previous report was published, showing that even if the tech economy chugged along during the COVID-19 pandemic it did not emerge from it unscathed, the report said.
Some populations, companies and sectors were more hit by the pandemic than others, the report said. Most affected have been women, the ultra-Orthodox and Arab workers, who have become more involved in recent years in the nation’s tech sector. But the pandemic has come to affect these populations disproportionately.
“The coronavirus crisis halted the positive trends of recent years regarding the increased integration of women and members of the Arab and ultra-Orthodox communities in high-tech,” the report noted.
In all, there was an annual average of 334,000 people employed in the tech sector in 2020, according to the report, accounting for 9.8% of the total workforce, a record level.
“The fact that the demand of human capital in high-tech remains high even in a year of global crisis suggests that the shortage is chronic,” Eugene Kandel, the then-CEO of Start-Up Nation Central said in a preface to the report at the time. As demand for technology increases, as highlighted by the pandemic, this will make the shortage of workers even more acute, and demand for employees capable of developing solutions will increase, both in the high-tech industry and in other industries undergoing digital transformation, he added.
The way to bridge this shortage, he said, is to tap into the underrepresented populations.