Start-Up Nation Central Innovation Industry Human Capital Report

The 2018 Israeli Innovation Industry Human Capital Report was produced in partnership by Start-Up Nation Central and the Israel Innovation Authority. The survey was executed by Zviran. Financial support was provided by The J.P. Morgan Foundation.

This report aims to understand the degree of the imbalance between the demand for tech talent and the supply in Israel. It does so by analyzing the results of a survey and by using auxiliary data.
This year 362 companies responded to our survey. Together they employ over 82,000 people, which is almost 40% of the Israeli tech innovation sector as defined by Start-Up Nation Finder that tracks innovation companies with their own technology product.

As of July 2018, we estimate the number of open tech positions in the tech innovation sector to be around 15,000. This does not include demand for tech workers from outside of the tech innovation sector, for example, IT services companies and telecommunications firms, which are defined as part of the tech sector by the Central Bureau of Statistics (CBS).
The industry is growing faster than the supply of talent: Over the past five years, the number of people employed in the Israeli tech sector, as defined by the CBS, has grown from 240,000 to 280,000, but their percentage in the labor force is stagnant at around 8% of the total workforce.

The number of computer science and engineering university graduates has remained nearly flat for about a decade until 2016, implying that the growth of the demand for tech talent is outstripping the growth of supply, creating a growing imbalance.

Offshoring is a near-term solution for many companies (large and mid-size): Israeli technology companies, looking for talent and cost reduction, are increasingly establishing offshore R&D facilities in locations that offer quality talent at a reasonable cost. Every fourth company in our survey reports having an overseas development team, Ukraine being the most favored location.
For the full report click here

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