School-Age Education May Offer Best Hope for Israel’s Tech Talent Crunch, Says Report

Israel’s tech industry is already tapping most of Israel’s existing highly skilled workers, casting doubt on the viability of various incentive programs intended to draw more people to the sector, according to a new report by the Taub Institute for Social Policy Studies

Improving school-age education may be the best, and perhaps the only viable solution for Israel’s tech talent crunch, according to a new report published by Jerusalem-based think tank the Taub Institute for Social Policy Studies. Offering a comprehensive look at 2019 Israel, the report’s authors examined many aspects of Israeli society and economy, paying special attention to its tech industry, widely regarded as Israel’s most powerful growth engine.

 

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Tech workers make up 8.2% of the Israeli workforce—the highest percentage among OECD countries and high above the OECD average of 3.7%. They account for a quarter of tax income payments, and around half of the country’s exported production. They also receive nearly 2.5 times the average market wage, boosting Israel’s overall GDP and productivity.

 

Biology students, Israel. Photo: Amit Sha'al

 

 

But as more and more multinationals flock to Israel in search of innovation and cutting-edge technologies and local startups pop up like mushrooms after the rain, Israel’s most attractive resource—its human talent—is reaching its limit. The country is missing around 10,000 skilled personnel according to official estimates, and tech employment rates have remained steady for the last decade despite an ever-increasing demand.

 

Awareness of the problem has led Israel to launch various programs intended to ameliorate the situation, some intended to help adults gain relevant skills to make the shift into tech, others offering benefits to companies willing to open locations outside of the country’s tech-heavy center. Efforts are also being made to increase the participation of minority groups such as women, Arabs with Israeli citizenship, and ultra-Orthodox Jews, under the assumption that the main group of tech workers—non-religious Jewish men—is mostly tapped out.

 

But the Taub Institute’s report is pointing out a major flaw in these programs: most adults with the necessary skill and talent needed to work in the tech industry are already employed in it. The institute is relying on the Programme for the International Assessment of Adult Competencies (PIAAC), the OECD’s skill survey. The survey measures adult proficiency in key information-processing skills such as literacy, numeracy, and problem-solving (and in Israel, also English), and splits people into five levels accordingly.

 

According to PIAAC, the gap in skill between tech employees and other-industry employees is much wider in Israel than in other OECD countries. Furthermore, in Israel, those in the top 20% of skills that are not already employed in the tech industry are much more likely to be employed in similarly well-paying jobs, making the possibility of a career pivot less probable for them. As a result, while Israel may on the surface have a wide pool of work-age adults to draw from, most of those adults will lack the necessary skills to succeed in the tech industry even with re-training, the Taub Institute concluded in its report.

 

Israel’s best hope in boosting its tech talent pool in the future is an investment in school-age education, and especially in the education of groups lower on the social economic scale, the report’s authors stated. Special emphasis should also be paid to increasing English skills, according to the Taub Institute: the Israel part of the PIAAC concluded that without English proficiency of some level, odds of tech employment dwindled to nearly zero in Israel.

 

According to the report, there are already several positive signs when analyzing current educational trends.

 

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Since 2012, when a special incentive program was put into motion by the Israeli Ministry of Education, the number of students choosing to take high-level English and mathematics courses has seen a continuous rise. The percentage of students graduating with a high school diploma is also consistently growing. While Israeli students still score below the OECD average on international surveys as PISA, TIMSS, and PIRLS, Israeli scores are improving at a faster rate than the OECD average.

 

On almost all metrics (including tertiary education), Israeli female students have shown greater improvement than male students. It is also worth noting that while current school-age education trends in Israel still mostly correlate with socioeconomic status, among Arabs with Israeli citizenship, Druze, and Bedouins—all groups lower on the socio-economic scale on average—educational improvement has in recent years been progressing much faster than among Jewish students of lower economic status.