Manpower crisis: The Galilee and the Negev will be the new dimensions of Israeli high-tech

“The concept that any business activity that deals with innovation should come from the Tel Aviv area is wrong – there are innovative topics like food tech, agro-tech or digital medicine that need resources elsewhere,” explains Erel Margalit, founder and chairman of the JVP Foundation and Margalit Startup City – , Which warns of the manpower crisis that is being felt today in the high-tech industry in Israel.

“The Galilee and the Negev will be the new dimensions of Israeli high-tech. Israel needs to open high-tech to new communities in new areas – create high-tech centers in the periphery, establish new growth areas, Margalit explains.” High-tech can not stay in the ivory tower. Through education from an early age.

Technology and high-tech will be the driving force for creating a turning point and political change in the region. The regional changes with Arab countries have opened up a huge new global market that we have not known for decades. The next unicorns will come from technological collaborations in the area. The government must focus a great deal of assistance on various issues and in different parts of the country, return the incentive to each company to absorb unique populations and establish a first university in the Galilee. “

Launch of Margalit Startup City (Photo: Olivia Rosenthal)
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Margalit, one of the top Israeli high-tech companies, is responsible for the establishment of Margalit Startup City – a network of leading innovation centers in Israel and around the world. The unique model of these innovation centers is based on connecting investors, government officials, academia, startups and multinational companies with social and cultural entrepreneurship. All of these together produce an engine of regional economic growth, new jobs and changing the reality of life for many people.

Last September, it launched the Israel International Food Tech Center Margalit Startup City in Kiryat Shmona. The Galilee Center, home to collaborations between giants, startups and academia, focuses on developing solutions to the world’s burning problems, such as smart agriculture, global warming, alternative protein, global hunger and the need for healthy food. It will change the employment map of the entire region, and make the Galilee an international power in the field.

“In the Galilee there are research institutes of the kibbutzim and moshavim, very extensive agricultural practice and also different approaches of agricultural tradition because of the diverse population, which also includes Jews, Arabs and Druze,” explains Margalit, who emphasizes that the center is based on a unique ecosystem connecting Galilee kibbutzim and localities. Urban and kibbutzniks, secular and religious, Arabs and Jews. “A city, or an area like the Galilee, should ask themselves if there is an area in which they can invest and lead Israel within five to seven years, and in this way create tens of thousands of quality jobs with high salaries.”

The center has a tremendous impact on the education system of the entire region by creating special frameworks and programs for entrepreneurship and food tech studies. The children of Kiryat Shmona and the Galilee communities will study in unique technology and entrepreneurship tracks that work together with Margalit Startup City Community (in the community) – the social organization that Margalit founded over 20 years ago, which brings technological education to schools and students in the area. Among the companies that have already joined the center: JNF, the Luzzatto Group, Cisco, Deloitte, Bank Hapoalim, the Miguel Research Institute, the Tel Hai Academic College, the Galilee Development Company, Fischer Bachar Chen, Digital Valley and more.

“You get a tremendous opportunity to create something new that is not done elsewhere, and it is a leader in its field in Israel and in the world,” Margalit adds. “In recent days I was presented with the possibility of opening a second building in Kiryat Shmona, and I saw the number of companies, international and Israeli, that need innovation and want a presence in the center. They want to be a place that gives all help. “Such centers are the best chance for a distant place like Kiryat Shmona, or the Galilee region, to play in the international league of the greats.”

Erel Margalit at a school in Kiryat Shmona (Photo: Eyal Regev)Erel Margalit at a school in Kiryat Shmona (Photo: Eyal Regev)

International deployment
The Food Tech Center in the Galilee joins the international innovation centers established by Margalit in Jerusalem, Beer Sheva, Haifa, Tel Aviv and New York. The goal is to produce the father, which connects Israeli entrepreneurs, from south to north, to the international market. After two years since its launch, the center in New York has become home to 35 leading companies and about 350 employees. This is in addition to collaborations with the major universities NYU, Cornell, Colombia and CUNY.

According to Margalit: “Israeli high-tech was one of the important and central factors that led to the opening of the city during the challenging period of the Corona, and marked it as a center that continues to connect different countries and groundbreaking innovation.” Such collaborations also exist in Margalit’s innovation centers in Israel. A new venture was recently launched in the lower city of Haifa – an accelerator for entrepreneurs in the field of digital health.

The strength of the project lies in connections between the leading players in the field in Israel, such as Rambam Hospitals and Bnei Zion Medical Center, academic institutions in the north such as the Technion, government bodies and private and public companies from Israel and around the world. Other partners include Philips, Innovation Authority, Road 2, Pharm, IBM, NVIDIA and more. “Haifa is not a periphery, but because of its urban perception it has lost some of its young people,” explains Margalit, who grew up not far away, in the city of Carmiel. To the streets, which will meet each other in the areas of trade and development.

“If you want to evacuate the refineries from the city, you need to think of another model that will provide a good quality of life alongside employment with high salaries and business and technological leadership in certain areas, for example the issue of digital health,” he emphasizes. One of the companies that illustrates the potential in the northern region is Nanit, which graduated from the Technion in Haifa and developed a digital sleep camera for monitoring baby sleep. A successful connection with Cornell University in New York spawned a company that generated $ 60 million in sales, and is making a dent in the field.

“This illustrates the essential difference between Israeli and European companies,” Margalit explains. “Europeans usually stay in one place, because their country of origin is large, while we look at Europe, the United States and today also the Arab market. “We have innovations and developments that produce real drama at the international level, so it gets really interesting and attractive. 14 of our companies are already recognized in Dubai and Abu Dhabi, and we are entering more places in the world. There are many investments in the region, and Israel can be part of it.”

Margalit Startup in New York (Photo: Shahar Azran)Margalit Startup in New York (Photo: Shahar Azran)

Cracking the high-tech social model
Under Margalit’s leadership, to date JVP has invested in more than 160 companies, raised $ 1.6 billion, led dozens of exits, 12 issues on the Nasdaq and been ranked as one of the top six venture capital funds in the world. Margalit, former chairman of Cyberark, one of the cyber companies The world leader, he serves as chairman of the Unicorn Arnix and other leading companies, including ControlLap, Nanit, Centricl and Enclip.

But beyond the extensive business activity, Margalit also cracked the social model of high-tech, understanding that high-tech must emerge from the bubble in the center of the country and open up to new geographical parts and new populations: the Galilee, the Negev, the Arab and ultra-Orthodox sector. He emphasizes that this must happen in the next five years – otherwise Israel will be left behind. “The year 2021 has proven that technology and high-tech are the most significant engine of growth in Israel, in its revenues, in its resilience to any global crisis and in the creation of jobs,” Margalit emphasizes.

“At our center in Jerusalem, we deal with AI and cloud technology. About 15 years ago, there was almost nothing here and now there are over 20,000 high-tech jobs, and the biggest exits have left the capital. This is proof that other populations are entering high-tech today: ultra-Orthodox and Arabs. “

Margalit emphasizes the importance of government involvement in the economic development of the areas far from the center. “The officials in the Ministries of Economy and Finance are very much with us, and that helps us with the incentives. I feel that Prime Minister Naftali Bennett, Interior Minister Ayelet Shaked, Economics Minister Orna Barbibai and Science Minister Orit Farkash-Hacohen are also paying attention. “However, this has not yet been translated into a national allocation of resources and much of the work should be in the economic development of the region,” he explains.

“I can not only look for companies and startups from Israel, I must reach out to all the multinational companies in the world, explain to them the potential of what is happening in Israel, what advanced research there is here. And it should be a national discourse to deepen the connection between the business sector and the region. “

Margalit has been connected to the social issue for years. 20 years ago, together with his wife Debbie, he founded the Margalit Startup City Community in order to reduce gaps. To date, the association has operated with more than 45,000 children and youth, through about 800 service year volunteers, who have operated and are operating throughout the country over the years. The year 2021 was marked by connections between school children from the periphery with JVP’s portfolio companies – with the aim of giving children the desire to be entrepreneurs on their way, exposing them to the world of technological innovation in all areas – food, cyber, media and big data technologies.

“I do not feel whole with myself if I can not contribute to the fact that all the children in the north, south and periphery will not be involved in it,” he emphasizes. ” The connection between social action and economic action creates for a person the meaning of something that is more complete, there is more happiness in it. Recently I was surprised to see that there were schools that followed us and also introduced technology and food tech, so it is no longer just ours. I sat with the kids and it was so exciting, you feel like you are rolling a positive snowball and creating a new language in an area that was used to talking about itself so far in terms of distress, and now in terms of leadership and excellence. ”

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