Israel to boost tech funding schemes

New incentives for ultra-orthodox, Arab entrepeneurs

iPhone Jewish

Israel’s chief scientist is trying to solve two problems at once with a new policy to provide preferential funding to technology start-ups that are founded by ultraorthodox Jews and Arab Israelis.

More than half of ultraorthodox men aged 35-54 do not work, according to a recent study by the Taub Centre for Social Policy Studies. The low labour market participation of Arabs and the ultraorthodox (“Haredim” in Hebrew), which together make up approximately 35 per cent of the country’s 8.2m people, were dragging the Israeli economy down, Karnit Flug, governor of the Bank of Israel, said in her first annual report last month.

“Given demographic trends among Arabs and Haredim, it is crucial for the economy to improve their integration into the labour market and Israeli society,” she said.

At the same time, Israel’s many start-ups increasingly complain that the country does not have enough engineering and other talent to sustain their growth. This means that while Israel is the second-largest source of innovation after Silicon Valley, as measured by the value of its tech start-ups, few of those young companies grow to become global groups with multibillion-dollar valuations and thousands of employees.

Avi Hasson, chief scientist at Israel’s Ministry of Economy, sees a way to connect the two groups.

At Israel’s second annual Haredi High-Tech conference in Jerusalem this month, he announced a new funding programme. Young companies that pass the strict application process will qualify for 85 per cent in matching funding, up to 2m shekels (£340,000), instead of the 50 per cent offered in other government programmes. The start-ups will also enjoy a 75 per cent subsidy on access to business mentors and receive other guidance. A matching scheme for Arab Israeli entrepreneurs will be announced shortly.

READ THE FULL STORY HERE

– Financial Times, May 27, 2014

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