'Israel must decide: Hi-tech jobs in Bnei Brak or Kiev'

"We are not just businessman - we are also Israeli Zionists who care about Israeli society," JVP founder Erel Margalit said.

JVP founder and executive chairman Dr. Erel Margalit (photo credit: PINHAS EMANUEL)
JVP founder and executive chairman Dr. Erel Margalit
(photo credit: PINHAS EMANUEL)
The State of Israel must decide whether it wants “its hi-tech jobs in Bnei Brak or Kiev,” Jerusalem Ventures Partners founder and executive chairman Erel Margalit warned on Wednesday.
Addressing the Haredi Hi-Tech Conference in Jerusalem, Margalit cautioned that failing to implement a strategy for integrating Israel’s growing ultra-Orthodox community into the hi-tech workforce will see “hundreds of thousands of development jobs leaving Israel for Kiev in Ukraine.”
While the local hi-tech sector employs more than 300,000 workers today, a recent study by the Israel Innovation Authority and Start-Up Nation Central revealed that Israel’s tech innovation sector is growing faster than the local supply of talent, leading to a shortage of approximately 15,000 skilled workers needed to fill open positions.
“The State of Israel will need to set a national goal of training 100,000 ultra-Orthodox workers during the next decade” to avoid outsourcing jobs to countries including Ukraine and India, Margalit told the conference organized by Bizmax.
“For us in the hi-tech industry, it is more profitable to export the jobs to Ukraine, but we are not just businessman – we are also Israeli Zionists who care about Israeli society,” he said, citing the important role of the ultra-Orthodox community in Israel’s engine of economic growth.
Jerusalem Ventures Partners, founded in 1993 by Margalit, manages funds worth $1.4 billion, establishing more than 140 companies and completing 35 exits to date, including 12 Nasdaq IPOs. According to the venture-capital fund, its investments have assisted the creation of more than 20,000 jobs in Jerusalem.
“The hi-tech industry cannot be alone in this story – everyone has to join forces: the government, industry and ultra-Orthodox society,” Margalit said, citing a list of measures that must be immediately advanced by the government to hit the target of 100,000 workers.
Measures include the formation of short and intensive training courses based on the IDF’s Mamram training model, offering long-term financial incentives to employers and supporting higher-education institutions that offer technology courses for the ultra-Orthodox.
According to figures published in August 2019 by the Labor Ministry, employment among ultra-Orthodox women has increased significantly in recent years, with approximately 76% now employed, just below the high national average of 78.3%. Among ultra-Orthodox men, however, only 50.2% are employed.
At the lower extreme of the socioeconomic spectrum, the ultra-Orthodox Bnei Brak neighborhood of Ramat Elhanan (West), with a population of 1,137 residents, was designated as Israel’s least-advantaged area. Other neighborhoods among Israel’s least advantaged included Kiryat Harama in Ramat Beit Shemesh, Mea She’arim in Jerusalem and Kiryat Degel Hatorah in Modi’in Illit, all home to ultra-Orthodox populations.
“The success of a city is derived from no shortage of parameters,” Jerusalem Development Authority CEO Eyal Haimovsky told The Jerusalem Post. “Yet there is no doubt that a population residing in the city that isn’t productive, and which relies on municipal resources without contributing to its productivity, is a significant weight to bear.”
Recent increases in ultra-Orthodox workforce participation will greatly benefit the city of Jerusalem, he said.
“You can see it in rising household incomes within the ultra-Orthodox sector and a corresponding rise in household expenditure,” Haimovsky said.