Israeli tech sector is strong but ‘areas of vulnerability’ pose challenges

Israel’s tech ecosystem is strong and vibrant but areas of vulnerability could pose challenges to the industry and possibly to the wider Israeli economy, warned the outgoing executive director of tech-focused organization Start-Up Nation Central (SNC), Wendy Singer.

The celebrated tech industry suffers from a chronic shortage of talent and more resources are needed to help with skills development that could help fulfill this need, said Singer, adding that it is a “blue ocean to explore.”

SNC’s annual reports on the Israeli tech ecosystem have repeatedly called for more programs that would tap into underrepresented populations, such as ultra-Orthodox and Arab communities, as well as women, to bridge the shortage. “Without the large-scale integration of women, Arabs and the ultra-Orthodox population in high-tech, the primary growth engine of the Israeli economy will be without fuel, and the negative impact will far exceed the tech industry’s relative size in the economy,” warned former SNC CEO Eugene Kandel in the 2021 report.

Israelis have “grit and chutzpah and resilience, and a problem-solving gene,” but “there are areas of vulnerability that, if we are not careful, this thing is not guaranteed,” Singer said in a wide-ranging interview with The Times of Israel at the end of January on her last day with SNC.

Singer is wrapping up nine years as a top executive in the organization, established in late 2012 as a gateway to the Israeli tech sector and the “connective tissue” between the industry and global markets seeking innovative solutions.

The former long-time director of AIPAC’s Jerusalem offices, Singer left the lobbying organization after a 23-year career to join SNC, founded in 2012 as a nongovernmental, nonprofit, philanthropic endeavor bankrolled by Paul Singer (no relation), a billionaire American hedge fund manager and the founder of investment firm Elliott Management (which has invested in Twitter and Softbank, among many others) and Terry Kassel, chairperson of SNC and head of strategic human resources at Elliott Management.

Over the past decade, Singer has been deeply immersed in the transformation of Israel from a “Start-Up Nation” to a tech powerhouse, a country with exceptional local talent that draws the interest of large, prominent multinationals, and is also now home to industry leaders, top international venture capital funds, a growing number of billion-dollar companies, and more firms hitting capital markets and acquiring smaller operations than ever before.

Singer also had a front-row seat to the seminal best-seller “Start-up Nation: The Story of Israel’s Economic Miracle” published in 2009 by her spouse, Saul Singer, and Dan Senor. She described a then-nascent but rising Israeli tech sector, an environment in which “the book became like a playbook for how countries can build innovation ecosystems.”

SNC was founded just a few years later. “As the Israeli tech sector blossomed, the organization did too in parallel,” she recalled. Today, SNC employs some 100 professionals and is led by an “extraordinary CEO,” Avi Hasson, the former chief scientist at the Ministry of Economy and Industry, and founding chairman of the Israel Innovation Authority.

Singer credited Kandel with “putting a finger on issues that really need attention,” such as the talent shortage, and “digging deeper to better understand about under-representation.”

As a result of this work, SNC developed programs such as Excelleteam to recruit Arab and female ultra-Orthodox computer science graduates into the innovation ecosystem through specialized tech boot camps, and Adva, a two-year program for ultra-Orthodox women to integrate into the tech workforce. The Adva program is operated by Scale-Up Velocity, a nonprofit organization affiliated with SNC that partners with tech firms and academic and training institutions to set up initiatives to help Israel’s tech industry tap into talented human capital.

“We developed these programs that bring together industry, philanthropy, government, the non-profit world,” said Singer. With the Excelleteam program, she said, SNC was able to place 90% of graduates at double or triple their previous salaries.

Kandel has, meanwhile, moved on to co-chair a sister organization to SNC, the Start-Up Nation Policy Institute, to research and develop long-term policy recommendations to foster the continued growth of Israel’s tech sector. Kandel served as SNC’s CEO for six years and remains a senior adviser to the organization. Singer, of Elliot Management, serves as co-chairman of the new research institute.

“There’s a need for a much brighter spotlight on some issues, and more depth,” said Singer of the idea behind the institute.

Core activities

In the early days of SNC, said Singer, one of the most important decisions the organization made was to become a “global source of knowledge and insight” with the Finder database, which “maps out the entire tech ecosystem, including startups, investors, multinationals, and technologies developed in academia.”

The database includes key information about over 7,000 startups and companies including funding rounds, investors, sectors, products, and latest news updates.

SNC has also successfully positioned itself as a tech matchmaker. “We take a problem or pain point [of a given entity], and match it with a set of potential Israeli solutions,” said Singer, adding that the organization has worked with brand names such as L’Oreal, Volvo, and Novartis among many others for such connections.

The organization’s work has also allowed for the “ability to present Israel’s story on a global stage through different partnerships, conferences and so on,” said Singer.

She recalled a pre-COVID agriculture tech conference in Kigali, Rwanda, where hundreds of dignitaries, government ministers, and heads of multinationals from across the continent were in attendance, “and there was a huge line at the SNC booth so we could help connect them with Israeli agtech solutions.”

In recent months, SNC also hosted Colombian President Ivan Duque, who opened the country’s first trade and innovation office in Jerusalem in November, as well as a first-of-its-kind business conference on Israeli technology with UAE Ambassador to Israel Mohamed Al Khaja. About 200 people attended the summit, among them members of a state-sponsored business delegation from the UAE led by Emirati Minister of State for Entrepreneurship and SMEs (small- and medium-sized enterprises) Ahmed Belhoul Al Falasi and Minister of State for Foreign Trade Thani Al Zeyoudi.

Singer said she believed there is also likely to be more activity in the near future with Morocco and Bahrain, also signatories to the US-brokered Abraham Accords in 2020 that normalized ties between Israel and Muslim-majority nations starting with the UAE.

SNC’s activities have also contributed to existing ties with friendly nations such as India, Singer explained. “We have 30 years of diplomatic relations, and innovation is a key pillar of this bilateral relationship. Start-Up Nation Central added depth to that.”

Inside Israel, SNC has placed special focus on Jerusalem and the blossoming tech ecosystem in the Israeli capital, home to two prominent companies — Mobileye and Lightricks. “We’ve played an active role in Jerusalem — this city is so complicated — and if it can stand out globally, with a ranked ecosystem, it serves as an inspirational model,” said Singer.

“Jerusalem’s tech sector has not only grown dramatically… but can serve as a model for an emerging global tech hub,” Singer said in 2020. “Producing some of Israel’s standout unicorns has been Jerusalem’s calling card. This proves there are ecosystems developed outside of Israel’s center that can prosper, and function – and be part of the economic growth in Israel’s periphery.”

Looking ahead, she said SNC with Hasson at the helm would focus more on highlighting the exponential impact of the Israeli tech ecosystem on the world and the country in a global innovation context.

As for Singer, she hopes to “jump in the ring” and work directly with startups and companies to “take it to the next level.”

“If we think of Israel as a model, can we take the tech story and help others grow?” she asked, pointing to regions like the Middle East, and Africa which she said has the fastest-growing, youngest workforce in the world.

As someone who has spent much of her career in the Mideast, Singer said the moment is “ripe to use innovation as a tool to bring peace agreements to new levels of depth.”