Israel’s hi-tech workforce climbs to 198,500

Hi-tech employees make up 8.4% of the business sector, responsible for 16% of business product.

August 12, 2011 00:02
4 minute read.
A laptop.

laptop 311. (photo credit: Wikipedia Commons)

It’s not difficult to obtain figures on the size of Israel’s hi-tech industry.

The Central Bureau of Statistics, for example, estimates that 261,000 people were employed in hi-tech in 2010, up from 243,000 in 2009. However, the statistics bureau expanded the criteria for inclusion in this sector to conform to OECD definitions, and among the fields it classifies as hitech are office machinery and the aircraft industry. Opinion is therefore divided on the true number of people employed in hi-tech.

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To try to obtain an accurate picture, the research unit of placement company Ethosia, which monitors employment trends in hi-tech, biotech and clean-tech, compiled its own statistics for Globes. Ethosia found that there are some 198,500 hitech workers in Israel. This number does not include, for example, production workers in the pharmaceuticals industry, but it does include R&D staff in that industry, a field that does not always appear in other research.

According to Ethosia, there are 3,366 hi-tech companies in Israel companies that actively engage in R&D and hire workers. Some 660 of these companies operate in the medical- devices and biotech sectors and employ 12,500 people.

Israel Aerospace Industries Ltd. is the largest hi-tech employer, with 15,000 employees, followed by another defense company, Elbit Systems Ltd., with 10,000 workers, and Rafael Advanced Defense Systems Ltd., with 5,600.

Defense companies such as IAI have become the largest in the economy – not just through mergers and acquisitions, but through hiring employees.

After the defense companies, the largest employer in Israel that is not a software house is Intel, with 7,057 workers. Amdocs Ltd. and Hewlett- Packard each have 5,000 workers in Israel, ECI Telecom Ltd. employs 2,600 in Israel, and IBM and the RAD Group employ 2,000 each.

The hi-tech industry is on a path of clear growth. The precise numbers vary because of the different trends that affect the industry, but it accounts for a large proportion of the economy. According to Central Bureau of Statistics figures, Israel’s hitech industry was responsible for 16 percent of total business product in the country in 2010. This is an impressive number, given that the industry employs only 8.4% of the total number of workers in the business sector, and this is high in comparison with Western countries.

“The hi-tech industry concentrates its resources mainly in R&D and sales,” Ethosia CEO Eyal Solomon told Globes. “The remainder is support positions in the main departments of the various enterprises. The data indicate that Israel is an architecture and design country, with production and development, too, taking place in less expensive countries.”

Over the last few years, hi-tech development and production departments have been transferred overseas, especially after mergers and acquisitions.

This trend is even more pronounced among start-ups, which move development centers to less expensive countries. This reinforces the need in Israel for architects, systems engineers and project managers who can work with development groups in India, China and Eastern Europe.

One of the most surprising phenomena found by Ethosia’s data is the rise in the number of project managers. Until recently, this was a position in low demand; the current rise in demand indicates growth in the number of projects being undertaken by the hi-tech industry.

Mobile and Internet: a workers’ market When industry figures broken down by branches are examined, it emerges that there are 1,050 companies in the Internet industry, slightly more than in software, where there are 1,010 companies. There are 710 companies in telecommunications.

“We have identified a flow of software developers into the Internet and mobile industries, where we have identified a red-hot trend and a market that is becoming a workers’ market,” Solomon said. The main reasons for this are relatively low barriers to entry for programmers and high demand for mobile developers, he said.

Breaking down the numbers by category, software leads in the number of employees in the hi-tech industry in Israel. According to Ethosia’s data, there are 37,400 people employed in software, 15,400 in hardware, 3,262 in algorithm development, 4,741 in IT and 4,604 in software testing. In addition, 9.084 students are also employed in various hi-tech fields.

According to the Central Bureaus of Statistics, the number of male hitech employees rose from 162,200 in 2009 to 168,100 in 2010. The number of women in the industry rose from 90,700 in 2009 to 93,000 in 2010, or 35.6% of hi-tech employees.

The proportion of women who are managers in the industry rose from 16% in 1990 to 32.9% by the end of 2009.

“The glass ceiling in the industry has been shattered, and more women are successfully taking attractive roles, including managerial positions,” Solomon said. “This trend is due to the rise in the number of female college graduates, which today is larger than the number of male college graduates.”

The hi-tech industry currently offers women salaries that are three to four times what is offered them in other industries, which often discriminate against them, he said.

Among other trends are: the entry of many haredi and secular women into software testing in locations that until now were not considered hi-tech regions; a rise in the number of project managers and development work with customers, mainly in the Internet industry; and that companies aim to create a better balance in the number of male and female employees.

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