Israel's Tech Sector Needs Foreign Workers, Netanyahu Says

(Bloomberg) -- Israel will have to let foreigners work in its vaunted technology sector if it wants to ensure the industry’s growth, according to Prime Minister Benjamin Netanyahu.

“In Silicon Valley they’re doing it: You hear Hindi and Hebrew on the streets,” Netanyahu said at a business conference Wednesday in Jerusalem. Even if the country enlists peripheral communities that barely work in the field, such as Arab citizens and ultra-Orthodox Jews, Israel would still need to bring developers and engineers from abroad to meet the demand for talent, he said.

A world-class tech sector has been the driving force behind Israel’s economic growth in the past 20 years, but the sector now faces labor shortages that threaten its trajectory. There are about 15,300 open positions in the industry as of July, up 28 percent from the previous year, according to a report by Startup Nation Central, a non-profit that tracks the industry.

Maintaining and even boosting the growth of Israeli tech businesses is central to Netanyahu’s strategy to strengthening the Jewish state in a region where “only the strong survive, and only the strong make peace,” he told the conference. The hi-tech sector’s success begets diplomatic breakthroughs, including with formerly hostile Arab states in the Persian Gulf, Netanyahu has long argued.

In the past, local startups have pressured the government to give foreigners working visas, but the effort has met resistance. In the meantime, about a quarter of those companies now employ workers in foreign offices, according to Startup Nation Central’s findings.

“As the demand for tech talent is rapidly increasing, it is not being matched by the supply of programmers, scientists, and engineers, creating a growing shortfall,” the report said. “To date, significant parts of the industry have hired mostly university-trained, experienced, Jewish male candidates, which is not a long-term sustainable strategy for a growing sector.”

To contact the reporter on this story: Yaacov Benmeleh in Tel Aviv at ybenmeleh@bloomberg.net

To contact the editors responsible for this story: Stefania Bianchi at sbianchi10@bloomberg.net, Michael S. Arnold

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