/Israel looks to ultraorthodox to fill tech skills shortage

Israel looks to ultraorthodox to fill tech skills shortage

At first glance the Ampersand co-working space in Israel looks like any of its peers from San Francisco to Barcelona: an array of cacti, trendy furniture and multicoloured cubicles. But this project, in a poor suburb of Tel Aviv, has one crucial difference: the work areas for its 130 or so tenants are segregated by gender, to prevent men and women from mingling — one of the necessary working conditions for the ultraorthodox Jews that represent Ampersand’s target market.

“The idea of our project is to build bridges for the ultraorthodox community to get into the Israeli high-tech industry,” says founder Moshe Friedman. From Ampersand’s offices on the 18th floor of a tower block, he points westwards at the glitzy high-rise towers of Tel Aviv, home to many of the workers in Israel’s high-tech boom.

Moshe Friedman: ‘The challenge is to bring the ultraorthodox coming from a religious culture and lifestyle and connect them with a secular Israel, which is an innovative high-tech economy’ © Israel Bardugo

By contrast, Ampersand’s neighbourhood of Bnei Brak, 7km from central Tel Aviv, is one of the poorest and most crowded in Israel, and a centre of ultraorthodox Judaism. Known collectively as Haredim — which means to be in awe of god — this broad spectrum of groups is characterised by a rejection of modern secular culture.

“We are trying to close the cultural and educational gaps,” says Mr Friedman, whose great-grandfather co-founded the Haredi community in Jerusalem in 1921 and banned maths, science and English from its schools. “The challenge is to bring the ultraorthodox coming from a religious culture and lifestyle and connect them with a secular Israel, which is an innovative high-tech economy.”

The success or otherwise of initiatives such as Ampersand — a WeWork for the ultraorthodox community — and the potential to emulate them across the country and for other minority parts of the population, is crucial to Israel’s ability to integrate isolated communities such as Haredi Jews and Israeli Arabs into the workforce, notably the high-tech industry that powers its economy.

“The integration of the Haredi is one of the most pressing issues in Israel today,” says Philippe Guez, founder and chief executive of Maor Investments, which recently raised a $100m venture capital fund to invest in Israeli high-tech companies. “Integrating the ultrareligious into the workforce is crucial in the fight to improve labour market participation and increase productivity.”

This socio-economic challenge has also emerged as a key issue ahead of national elections on April 9, which are shaping up to be one of the closest in Israel’s recent history, with one major political party advocating rapid, enforced integration. It comes at a time when the authority of the elderly rabbis who direct ultraorthodox votes is being challenged by young Haredim, especially by women who have ventured out into the modern workforce. 

“Haredi society is going through an earthquake,” says Peggy Cidor, who has studied the closed-off community for a decade as a reporter for The Jerusalem Post. “This way of life has brought them only poverty, and the young see a way to have a sort of modern life, but to remain religious at the same time.”

Ampersand workers in Tel Aviv. The success or otherwise of initiatives such as Ampersand is crucial to Israel’s ability to integrate isolated communities such as Haredi Jews and Israeli Arabs into the workforce © Eli Mandelbaum

Failure to integrate the 1m ultraorthodox Jews into the workforce could blunt Israel’s decade-long economic transformation. The booming tech sector, which contributes 12.5 per cent to gross domestic product and makes up almost half of all exports, according to the Central Bureau of Statistics, is facing a skills shortage. There are at least 15,000 unfilled positions in everything from software engineering to machine learning and artificial intelligence, according to a 2018 survey by Start-Up Nation Central, a non-profit group. 

“The biggest bottleneck in the Israeli tech industry is people,” says Zvi Limon, an Israeli venture capitalist and investor in Ampersand. “We’re all struggling to hire engineers and are having to go abroad to find them. There’s a pocket of ultrareligious people in Israel . . . and this is a great untapped resource.”

Higher birth rates — more than double the 3.1 children per woman in the general population — means that Israel’s ultraorthodox Jews are forecast to grow from 11 per cent of the country’s population today to one-third by 2065. They are typically exempt from military service and are the recipients of various government subsidies and welfare benefits, as many do not work.

“When you look at the future growth of the Israeli economy, this country will collapse if the Haredim do not participate in civil society,” says Mr Limon. “Instead of being consumers of resources, it’s crucial that they become contributors.”

The ultraorthodox community is largely made-up of descendants of eastern European Jews and those who migrated to Israel from north Africa and neighbouring Muslim countries. Their rabbis tend to reject many aspects of modern life, such as unfettered internet access or smartphones, and most live their lives under strict interpretations of biblical restraints. These restrictions range from how to dress in public, what to eat and even how to vote: “Act on the instructions of the priests . . . do not deviate from the decisions they hand down to you, either to the left or the right,” says one biblical exhortation cited by rabbis to demand obedience. 

The Haredi live in self-imposed segregation and observe an absolutist interpretation of the religious texts, the Torah and the Talmud. The fact that almost half of its male population do not work in the formal economy, spending their time studying in the Yeshiva educational establishments, means that Haredi women are often the primary breadwinners.

Ultraorthodox Jewish women work at the software company Comax near Tel Aviv. Haredi women’s participation in the labour market has risen from 51 per cent to 76 per cent in the past 15 years © AFP

Many study computer science at vocational training institutions, or seminaries, rather than universities. And more than 7,500 young Haredi women enrol at these institutions each year — a figure that is expected to double within the next decade, according to SNC.

“[But] these seminaries are not regarded as prestigious educational institutions and so when the students leave, they struggle to get well-paid jobs in big international companies,” says Ampersand’s Mr Friedman. “Another problem is the cultural gap.”

After the seminaries, Haredi women tend to work in low-paid jobs at contractor companies providing outsourced programming and other tech services. Some contractors have been criticised for exploiting them with low salaries. 

“There is a double glass ceiling because you’re a woman and Haredi,” says Yael Raavad, a 26-year-old software engineer, and mother of three, who two years ago set up a networking community on LinkedIn to help ultraorthodox women share knowledge and job opportunities in the tech sector. It has grown to almost 1,000 members. “Companies make it sound like it’s complicated to employ Haredi women,” she adds, “but it’s not a big deal.”

To help them into higher-paying tech jobs SNC has developed its own two-year seminary computer science programme, alongside Google, Mobileye and Western Digital. Ampersand is working on a similar scheme, which offers Haredi women online computer courses from top universities, and then introduces them to large companies after graduation. “We’re giving Israel’s high-tech industry a new pool of talent — the Haredi women,” says Mr Friedman. “It’s a game changer.”

Chart showing that Israel has the highest birth rate in the developed world

Rachel Horowitz, chief executive of an eponymous clothing line, is the archetypal modern Israeli businesswoman. She employs nearly two dozen people, flies to Istanbul every month to meet suppliers, which manufacture her designs to the exacting rules of rabbinical Judaism, and is set to expand her Jerusalem-based chain with a website marketed to the US. When she quit as a teacher 14 years ago and decided to enter the world of business, Mrs Horowitz’s daughter was mocked at school for having a “modern” mother. 

“Now they see us differently,” she says. “People understand that even if I am a businesswoman, I still live within Haredi traditions, but it took them a while to learn that. I needed to succeed.”

Haredi children in Bnei Brak wear costumes during the feast of Purim. Higher birth rates means Israel’s ultraorthodox Jews are forecast to grow from 11 per cent of the country’s population today to one-third by 2065 © AFP

Gilad Malach, a director of the Ultra-Orthodox in Israel programme at the Israel Democracy Institute, a research body, says that during the past 15 years there has been greater integration of the Haredi into the labour market. Male participation has risen from 36 per cent to 51 per cent employment, while ultraorthodox women’s participation in the labour market has risen from 51 per cent to 76 per cent — just behind the rate for secular women. 

“The great question following the election is whether the next coalition government will depend on the ultraorthodox parties or not,” says Mr Malach. 

In Israel’s fractured Knesset, or parliament, the dozen or so seats controlled by the two large ultraorthodox parties makes them crucial in forming a government. Previously they have been indiscriminate in wielding their influence, joining nearly every coalition, left or rightwing — since the early 1980s. 

For Benjamin Netanyahu, who has been both supported, and held hostage, by his Haredi allies during his decade as premier, keeping them on side could allow him to form a rightwing coalition despite an imminent indictment for corruption, and the challenge from a political upstart, the Blue and White party.

However rapid changes in the ultraorthodox community, which is overwhelmingly young, are upsetting its monolithic voting behaviour. The support religious parties received in the past allowed them to play kingmakers, but members of the new generation of ultraorthodox voters, such as Ms Horowitz, are considering whether they could cast their votes elsewhere.

Businesswoman Rachel Horowitz: ‘People understand that even if I am a businesswoman, I still live within Haredi traditions, but it took them a while to learn that’ © Heidi Levine/FT

Mr Malach says “more and more people, especially youngsters, don’t feel at home in these ultraorthodox political parties”. He adds: “They care about national security, the Palestinian issue and the economy. They want to vote for parties that deal with these issues and don’t just focus on funding studies in the Yeshiva.”

Mindful of other candidates who offer practical, rather than spiritual, succour, “if a non-Haredi man comes and he gives power to small businesses, I would consider [voting for them],” says Mrs Horowitz. But, she adds: “I’ll have to ask my husband about this.”

After opening last year Ampersand is already doubling its office space in Bnei Brak and plans to expand to Jerusalem and other cities. It aims to support its entrepreneurs with everything from English lessons to legal advice, and seeks to bridge the gap between employers and investors.

The Haredim’s self-imposed segregation, absence from military service and lack of higher education mean they do not feature in the business networks that arise from being part of the top universities or the likes of Unit 8200, the Israeli military spy agency that has spawned a string of successful tech companies.

Mr Friedman’s experience reflects how a new generation is seeking to take a different path. Educated in the Yeshiva and expected to one day become a rabbi, he moved to Bnei Brak 10 years ago. After encountering a computer for the first time, he taught himself computer science and English and launched an online video editing start-up. “After meeting investors I realised I was the only ultraorthodox trying to build a start-up in Israel,” says Mr Friedman. “I felt very lonely. Everyone else was coming from the same units in the army like 8200 or the same specialist universities. People looked at me like an outsider . . . They look at you as if [being] religious, you belong to the past, to the Middle Ages.”

Alisha Cohen, 30, who operates RunMaxi, a digital property management start-up, from the Ampersand offices, says things are changing. “There is now a mindset that you don’t need to sacrifice your religious lifestyle, you don’t need to be an outcast from your family, but you can still be a successful entrepreneur. This is a huge revolution in Israeli society.”

Elections: canny political operators fear losing some authority 

For Israel’s leaders the Haredi political parties have often proven to be among the most canny of coalition partners. Characters such as Aryeh Deri, who founded Shas, a party that represents the Sephardic Haredi population, have a reputation as exacting negotiators. Over the years they have demanded governments of varying complexions back issues ranging from business closures on the Sabbath to conscription and gender-segregated access to the Western Wall in Jerusalem.

But as the community evolves, the elderly male leaders no longer command the unquestioned support from ultraorthodox voters that they once did. Experts have pointed out that even as the Haredi population has grown, the number of seats their parties have won has remained constant for more than a decade, indicating voters disobeying their rabbis in the secrecy of the ballot box. 

In one of the community’s strongholds, Beit Shemesh, a city west of Jerusalem, a female mayoral candidate last November beat a male Haredi rival, partly due to younger less strict ultraorthodox voters rejecting the community’s self-imposed segregation. In Haifa, a Haredi party put its weight behind a secular female candidate, dancing as they welcomed her on a victory tour of a synagogue.

Observers will be watching the April 9 poll for any further signs of a fraying of the ultraorthodox leaders’ authority. 

A female Haredi is running as a member of parliament for Labour. A second is a candidate for the Blue and White voting bloc, which includes Yair Lapid, leader of the Yesh Atid. It has vowed to cut subsidies for the ultraorthodox, and end automatic military exemptions for Yeshiva students. In 2017, just under 4,000 did either military or national service.