High-Tech Sector as an Engine of Recovery from COVID-19 Crisis

The high-tech sector employs around 10% of the total Israeli workforce. This sector's contribution to the total business product is twice as large, and its contribution in terms of labor taxes is over thrice as large, as its share of employees. Whereas many industries have suffered a severe blow since last March in the wake of Covid-19 crisis, with reduced employment rates and many workers being laid off or furloughed, the high-tech sector is relatively the least affected by COVID-19 crisis, compared to all other sectors. As of now, employment volumes in this sector remain on par with pre-crisis levels, capital keeps flowing into the industry, and market demands for the sector's products have recovered and even risen. All this gives rise to the question of whether the high-tech sector can contribute to the employment of workers who lost their jobs in other sectors, which have been badly hit by COVID-19 crisis.

Even though a significant share of employees in the high-tech sector have tech-related academic qualifications, the academic background of around a third of high-tech employees is non-technological, while another third do not have any academic qualifications. Since salaries in the high-tech sector are higher than in other sectors, a fact which also applies to workers who lack technological backgrounds, expanding the employment of such workers in the high-tech sector may not only help the Israeli economy to emerge from the current employment crisis, but also contribute to improved overall productivity and enhanced economic growth.

In the roundtable discussion to be held on December 9, 2020, we will present data on the attributes of the workforce in high-tech as well as other sectors, focusing on non-technological workforce, and examine barriers and opportunities for expanding the integration of such workforce in the high-tech sector. During the presentation we will expand on the characteristics of the workforce (both technological and non-technological) in the high-tech sector, as compared to other economic sectors; discuss the reasons which drive the high-tech sector to outsource positions abroad, and the barriers to repatriation of these positions; and portray the typical characteristics of workers who have lost their employment during the latest crisis. In light of all this, we will propose objectives and policy recommendations for expanding he employment of non-technological workforce in the high-tech sector. The presentation will be followed by a discussion on the disparities and barriers currently in place, and the proposed policy measures.

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