Israel is relaxing its visa regime in a bid to attract thousands of foreign high-tech workers and address a severe skills shortage that companies warn is imperilling a multibillion sector critical to the country’s economy.
Israel is home to one of the world’s most vibrant high-tech clusters outside Silicon Valley — earning it the sobriquet “start-up nation” — with technology accounting for about 12 per cent of employment in the nation of 8.5m. But companies complain of being unable to expand because of a limited local talent pool and stiff competition for skilled workers from deep-pocketed foreign groups such as Google, Apple and Facebook, which have large Israeli research and development operations.
However, Prime Minister Benjamin Netanyahu’s cabinet agreed on Sunday to absorb what he said would be “a limited number of expert workers” from overseas and give their spouses work permits as well.
Eli Groner, director-general of Mr Netanyahu’s office, told the Financial Times that the rule change would see “thousands of permits” granted for highly trained programmers, engineers, mathematicians and others. He declined to give a precise number of those he expected would arrive, but estimated the jobs shortfall in the sector was 10,000.
“We will do what we can to expedite the process for everyone who wants to bring them and their significant others in,” Mr Groner said.
Israeli tech companies, many of which have US operations and had been clamouring for the right to transfer employees to Israel or hire overseas, welcomed the decision.
“We think it’s a great move in the right direction,” said Nir Zohar, chief operating officer of the Nasdaq-listed web development group Wix and head of the Israeli Growth Forum, which represents tech companies. “If you want to get strong, talented and experienced people, these guys often come with a family.”
Immigration to Israel is based primarily on Jewish descent rather than skills, which has been a factor in companies’ ability to recruit internationally.
The relaxation of the visa regime is politically sensitive for Mr Netanyahu’s hard-right government because of both nationalist sentiment and pressure by trade unions to protect the labour market.
But the shortage of skilled Israelis is causing wages to spiral, and executives have voiced fears that Israel could lose high-tech jobs to the US or rival “offshoring” destinations such as India and Ukraine.
Tech companies also complain that securing work permits for foreign staff can take three months or longer to process. But Mr Groner said that the three-month waiting period would now be cut down to 45 days.
Explaining his cabinet’s decision, Mr Netanyahu said that allowing more foreigners and their partners to work in Israel was similar to what was “being done in Silicon Valley” and would, as there, have the net effect of boosting local jobs.
Israeli start-ups attracted a record $4.4bn of venture capital investment in 2015, but the high tech industry’s share of employment has been stagnating because of the skills shortage. The government has been trying to attract more members of the ultra-Orthodox Jewish community, as well as its Arab minority, who are under-represented at high tech companies, to work in the sector through training schemes.
Israel is also investing significantly in the elite cyber units of its military, which serve as a prime training and recruiting ground for high tech.