Not only in Tel Aviv: New start-ups in the Negev and Galilee

The data speak for themselves: there are 2,383 hi-tech companies in Tel Aviv, whereas in all the other nine cities, including Jerusalem, Herzliya, Haifa and Ra’anana there are only 2,311 companies.

CAMPUS OF the Shamoon College of Engineering. Beersheba is home to academic centers such as Ben-Gurion University of the Negev and SCE, the writer notes. (photo credit: SCE)
CAMPUS OF the Shamoon College of Engineering. Beersheba is home to academic centers such as Ben-Gurion University of the Negev and SCE, the writer notes.
(photo credit: SCE)

We are all proud of presenting Israel as the Start-Up Nation, but when there are many more hi-tech companies in Tel Aviv than in any other of the nine cities in Israel altogether, we need to start looking at ourselves in the mirror, and burst the bubble. The recently published data by the Innovation Authority show that our Start-Up Nation is primarily centered in Tel Aviv.

The data speak for themselves: there are 2,383 hi-tech companies in Tel Aviv, whereas in all the other nine cities, including Jerusalem, Herzliya, Haifa and Ra’anana there are only 2,311 companies. Moreover, all the top ten on the list do not include any cities from Israel’s geographic periphery. Not even “Cyber Capital” Beersheba made it to the top.

Currently, hi-tech remains the growth engine of the Israeli market. However, the concentration of hi-tech companies in Tel Aviv leads to the misconception that the finest minds for developing and doing business can be found only there. But there are fine minds in Ashdod and Beersheba in the south as well as in Safed and Kiryat Shmona in the north.

The exclusion of the regions outside of the Tel Aviv metropolitan area must be stopped and everyone should be welcomed to the hi-tech celebration. When start-up companies are concentrated in the Dan Region, the status and advancement of peripheral cities is impaired. Young people wishing to integrate into the industry have to relocate from the peripheral regions to the center and those cities then lose quality young people.

The current government set a national target of increasing the rate of persons employed in hi-tech to 15% by 2026. But that is not enough. The country has to, at the same time, promote the establishment of hi-tech companies in the periphery.

 START-UP Nation Mentorship hosts its first-ever event in Israel, at the Tel Aviv Port last week.  (credit: NOAM FEINER) START-UP Nation Mentorship hosts its first-ever event in Israel, at the Tel Aviv Port last week. (credit: NOAM FEINER)

This will resolve the issue of personnel shortage in the sector as well as provide a solution to the problem of diversity among the population of workers. This will not only promote the cities and their residents, but the entire sector. It is the key to equal opportunities and to reducing the social gaps – and the leaders of our government should be navigating in that direction.

Peripheral cities have unused potential, and they have to become independent within themselves and from the “State of Tel Aviv.” For instance, Beersheba’s connection to the desert makes it a special city, with cultural, tourist and historic values. Capital of the Negev, it is a city with significant anchors: academic centers, such as the Ben-Gurion University and SCE – Shamoon College of Engineering, the Soroka Medical Center, the Hi-Tech Park, and yet, there are very few start-up companies in Israel that have made their base in Beersheba. This is despite its huge potential for becoming a metropolis and hi-tech and innovation center.

The hi-tech industry plan

Expanding the hi-tech industry is a national, social and business interest. Development of smart industry – not only in the central cities – will promote the State of Israel, will leverage its financial standing and place it alongside leading countries in the world.

A comprehensive national plan is required that will encourage, develop, invest and lead to the establishment of hi-tech companies outside of the Tel Avivian bubble. Policy makers and regulators need to create taxation and incentive grants to encourage companies departing the Dan Region circle and establishing their bases in other parts of the Promised Land.

Moreover, the state should reinforce the entire peripheral envelope, from education and health to culture and infrastructures. The well-developed center is the comfort zone for hi-techers. There are reasons that these companies choose the crowded Dan Region, despite receiving no tax benefits and having to pay the highest rental fees for office space in the country.

The government has to change this equation and prioritize the periphery – to develop the health system in the Negev and Galilee regions, to encourage culture, to improve infrastructure, roads and public transport. This way we will retain the brilliant young minds and prevent their migration to Tel Aviv. Proper development of the northern and southern regions will not only benefit the local residents, but will also facilitate hi-tech companies in making the wise choice of moving their residences to Beersheba and Kiryat Shmona.

The writer is rector of SCE – The Shamoon College of Engineering.