Israel's high tech workforce climbs to 198,500

Israel's high tech employees make up 8.4% of the business sector and are responsible for 16% of business product.

It is not difficult to obtain figures on the size of Israel's high tech industry. The Central Bureau of Statistics, for example, estimates that 261,000 people were employed in high tech in 2010, up from 243,000 in 2009. However, the Central Bureau of Statistics expanded the criteria for inclusion in this sector, to conform to OECD definitions, and among the fields it classifies as high-tech are office machinery and the aircraft industry. Opinion is therefore divided on the true number of people employed in high tech.

To try to obtain an accurate picture, the research unit of placement company Ethosia, which monitors employment trends in high-tech, biotech, and cleantech, compiled its own statistics for "Globes". Ethosia found that there are some 198,500 high-tech 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 high-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. (IAI) (TASE: ARSP.B1) is the largest high-tech employer, with 15,000 employees, followed by another defense company, Elbit Systems Ltd. (Nasdaq: ESLT; TASE: ESLT), with 10,000 workers, and, Rafael Advanced Defense Systems Ltd., with 5,600.

Defense companies like 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. (NYSE: DOX) and HP 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 high-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 high-tech industry was responsible for 16% 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 high-tech industry concentrates its resources mainly in R&D and sales. The remainder is support positions in the main departments of the various enterprises," Ethosia CEO Eyal Solomon told "Globes". "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, high-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 European countries.

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 low demand position; the current rise in demand indicates growth in the number of projects being undertaken by high-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 says. Solomon believes that the main reasons for this are relatively low barriers to entry for programmers, and high demand for mobile developers.

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

According to the Central Bureaus of Statistics, the number of male high tech employees rose from 162,200 in 2009 to 168,100 thousand in 2010, and the number of women in the industry rose from 90,700 in 2009 to 93,000 in 2010, so that women comprise 35.6% of high 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 says. "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."

Solomon says that the high-tech industry currently offers women salaries that are three to four times what is offered them in other industries, which often discriminate against them. Other trends include the entry of many haredi (ultra-orthodox), and secular, women into software testing in locations which until now were not considered high tech regions; a rise in the number of project managers and development work with customers, mainly in the internet industry; and also companies aim to create a better balance between men and women.

Published by Globes [online], Israel business news - - on August 11, 2011

© Copyright of Globes Publisher Itonut (1983) Ltd. 2011

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