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‘The trends in high-tech are changing, but not at a pace Arab graduates need’: An interview with Reem Younis

Reem Younis is co-founder of Nazareth-based Alpha Omega, a global high-tech company that seeks to further high-tech skills, employment and entrepreneurship among Israel’s Arab citizens. Sam Nurding is assistant editor of Fathom. They spoke on 5th September 2016. 

Samuel NurdingReem, you have become something of role model for Israeli Arab entrepreneurs, and you now work to nurture other entrepreneurs. You grew up in Israel and studied engineering. What motivated you to pursue a career in the high-tech sector?

Reem Younis: Going to the Technion was not a coincidence, since my Physics and Math teacher at high school used to take us to the Technion and Wiezman Institutes instead of field trips! As soon as I graduated from High-school, I applied only for the Technion, and studied civil engineering there. I didn’t know that I would end up in the high-tech community. That happened after I met my husband, Imad Younis, at the Technion. He studied electrical engineering with the dream of joining the booming high-tech sector in Israel, but when he graduated he was not able to find a job. Most of the high-tech in Israel in the 1980s was dominated by security and military needs, and Palestinians / Arab citizens of Israel were unable to join that sector.

So he decided to go to the US to look for a job, but returned shortly after with one idea in his head, to start up high-tech in Nazareth in order to be able to supply jobs for graduates of the Technicon. After some years working as engineers living in Haifa, we decided that the time has come to fulfil this dream, so in 1990 we both resigned from our jobs, moved to Nazareth with a one month old baby girl and started two companies – Alpha Omega & Alpha CAD.

SNThe high tech sector has exploded in Israel over the last decade and Israel has earned the status as a ‘start-up nation’; a hub of innovation and new thinking. There are in the region of 100,000 plus software developers, but the Arab minority only account for about two per cent. How difficult was it for you and Imad to get into this sector and what kind of barriers did you encounter?

RY: When we started our project we didn’t know what we were getting into. We didn’t have any people to network with and we were disconnected from the centre of action. So determined were we to make this idea succeed that we did not think about raising money and accelerating our growth. We made so many mistakes, but kept going – our urge to succeed has been the reason for our success.

One of the barriers we faced, and still exists today, is that being in Nazareth or in the periphery you are far away from the high-tech centre of Tel Aviv. There is little scope for networking, getting to know the people who work in your field, getting to know the venture capitalists who can invest resources in your company in order for it to grow. In fact, the only person we knew when we began our company was the head of the Chief Scientist’s Office, and we knew he could help invest in our development for new products.

SNIs the situation different now – are there more resources for investment for Arab start-ups?

RY: Yes. Things are very different. The first change to note is that the majority of the high-tech business is no longer related to security, so Arabs have been able to join these companies and gain experience. They can gain the skillset they need in their new ventures.

To keep Israel as innovative as it is, within the coming 10 years we must make good a shortfall of 10,000 engineers, so the government is investing in the Arab & Haredi schools, encouraging young people to study STEM subjects (Science, Technology, Education, Maths) and eventually be engineers. The chief scientist also has a special program for the Arab start-ups where he subsidises up to 85 per cent of the R&D expenses. We’re also seeing a huge change in civil society. NGOs are starting to help graduates entre the Israeli job market and gain expertise. We are witnessing some start-ups in the Arab community, which is encouraging, and also we are starting to see venture capitalists starting to invest in Arab start-ups.

SNArabs have traditionally taken ‘safer’ routes of employment in Israel, such as pharmacy and teaching. Arab education is, to a certain degree, reflective of that. Start-ups are often viewed as riskier. Why do you think Arabs have traditionally preferred employment in pharmacies over start-ups? And are there cultural and educational challenges for Arabs who want to get into high-tech in Israel?

RY: If you look at the Arab community we certainly suffer from having many more pharmacists, lawyers and accountants than we need. But the younger generation are starting to realise that it’s not enough to just gain an academic degree – you need to think about employment afterwards. And the jobs now are in the high-tech sector. Therefore, I’m starting to see more and more young people asking, ‘Where will I work after I graduate, and will my degree help me obtain that job?’ So, yes, the labour market is pushing young people to reconsider what to study, but we are also seeing successful Arab engineers, role models working for big high-tech companies like IBM, Apple and Intel, and they encourage others to follow in their footsteps. The trend is changing, but not at the pace needed for Arab graduates.

SNSo let’s talk about your company, Alpha Omega. What initiatives you are involved in and what is the company’s approach to helping other Arab start-ups?

RY: The idea of Alpha Omega is to change the eco-system of Nazareth and the periphery and to help grow or attract other high-tech companies to the area. We focus on the three E’s – education, employment and entrepreneurship.

We need to invest in education. Many of our engineers / employees visit schools to encourage the next generation to study technology and to help them to dream a bigger dream, bigger than what the system seems to allow. Myself and my husband sit on the board of a few committees that help graduates during their studies like the Technion, Ort Braude and Yafo Tel Aviv collage.

We need to invest in employment. Alpha Omega is one of the few companies that accept engineers without any or necessary experience. Instead, we take the responsibility of giving them the experience so whenever they decide to leave Alpha Omega they are able to gain another job. I also sit on the boards of Kav Mashve and Collective Impact (see Fathom Summer 2015), organisations that promote Arab academic employment in the Israeli companies.

Finally, we need to invest more in Arab entrepreneurship. Already four people from Alpha Omega left to start their own start-up company and now we work with them as our subcontractors because they need business to succeed. Also we invested a little money in an Arab venture capital fund named ‘Takwin’ that aims to help new Arab start-ups.

SNYou want to take high-tech from the urban centres like Tel Aviv, which is dominated by Israeli-Jews, to the periphery and rural areas, where the Arabs are. Do you think the government is doing enough to facilitate this shift? And if not, what more can and should be done?

RY: Is not only because high-tech is mainly in the urban areas that it is dominated by the Jewish population. Most Arabs live in the periphery north and south and in order to get to Tel Aviv is about two hours drive each way. We lack the infrastructure to be able to live in the periphery and work in the centre. For example, there is no direct train from any Arab city or village to Tel Aviv. Therefore you have to relocate and live in Tel Aviv, which is hard for Arabs as they prefer to live with or close to their families. We have an abundance of talented people in the peripheries who are unable to work and therefore the state is not taking advantage of them. And this is why we need to think about moving high-tech from the centre to the periphery.

SNHow do you see the future of Arab entrepreneurship in the Israeli high-tech industry? Will structural challenges persist and force Arabs to relocate abroad?

RY: Obviously, if these issues are not resolved then we, as in Israel, will lose the talent to abroad. If you look people like Apple’s Vice President Johnny Srouji, he used to live in Haifa, but we lost him; he went abroad. To keep our talent here, the three pillars of Israel’s society – the government, the NGO sector and the private sector – need to start working together, invest more in our younger generation, and believe that they can be successful. This would be a win-win situation for both the Arab and the Jewish communities and will bring us a better country with a higher GDP, more products to export and more prosperity for all.

SNReem, thanks for speaking with me today and I wish you and Alpha Omega all the best in the future.

RY: Thanks.


Closing the Gap: Government, NGOs integrate Arab Israelis and ultra-Orthodox into Israeli High-Tech Economy

Arab Israeli Reem Younis grew up in Nazareth in Israel’s Upper Galilee. Inspired by her Jewish Israeli high school science and math teacher, she applied and was accepted to theTechnion. In the late 80s and early 90s, there were virtually no Arabs involved in the burgeoning Israeli high-tech scene, which was then dominated by security/military tech. However, infatuated by civil engineering and how buildings stand and collapse, nothing could stop Younis from pursuing her education.

But after marrying a fellow Arab Israeli student and electrical engineer, both of them securing entry level tech jobs, Younis couldn’t shake the ill feeling that other Arab Israelis were having so much trouble entering the high-tech industry.

“We decided we needed to start a high-tech company to employ Arab engineers,” Younis recalls of her decision in 1993 to leave her integrated city life in Haifa and move back to Nazareth, where she and he husband founded Alpha Omega, a leading company in the field of Neuroscience and functional neurosurgery for the treatment of neurological and psychiatric diseases, and then Alpha-Cad, a company that specializes in supplying complete CAD solutions, mainly for construction businesses.

Today, Alpha Omega employs 75 people at its Nazareth headquarters and has become role model for Israeli Arab entrepreneurial success in Israel.

In another part of the country, haredi (ultra-Orthodox) Nili Davidovitz was raised in the traditional Jewish way of life. However, a family move to the States during high school led her to Bais Yaakov School for Girls and later a computer science degree from Queens College, fulfilling a long-time dream to work with computers and more specifically, develop software to run on them.

“Most of my haredi friends became teachers,” Davidovitz says of her environment in the late 80s and early 90s.

After returning to Israel, marrying and having five children who entered the traditionalharedi education system where few core subjects – math, English, science – are taught and a majority of the community lives in destitution (52 percent of families were living in poverty in 2013, according to the National Insurance Institute), she decided she would play a role in helping women like herself get and stay out of poverty.

Davidovitz is now the CEO and founder of one of Israel’s top software projects company – Daat, exclusively hiring and empowering Haredi women and offering them successful careers side by side with their ability to lead their religious lifestyle and find the time to raise children and be active in their communities. Daat works with Israel’s largest companies including Bank Leumi, Clal Insurance, Cellcom and Straus Group.

A Win-Win for Both Parties

In the last decade, the Israeli government has been working closely with several NGOs to integrate both the ultra-Orthodox and Arab Israeli communities into the workforce with the goal of closing economic gaps in these traditionally underserved communities and boosting growth for the entire economy. Haredim made up 11 percent of the population in 2014 and this figure is expected to rise to 18 percent by 2034. Arab Israelis comprise around 21 percent of the Israeli population.

The task of integrating these cohorts into the workforce is not easy, explained Dr. Gilad Malach, head of the Ultra-Orthodox program at the Israel Democracy Institute.

“These communities share the same challenge of how to help them integrate into the workforce, but the barriers to entry are different and therefore the solutions are different,” explained Malach.

Malach said barriers to employment in the ultra-Orthodox sector include a lack of general studies, matriculation certificates and professional qualifications; cultural barriers, such as large families and hesitancy to work in mixed-gender environments; a lack of information about employment possibilities and job openings; and reluctance by non-religious employers to hire people they perceive as different.

Despite these challenges, the first stages of government efforts have proved fruitful. Between 2003 and 2014, the share of ultra-Orthodox men with gainful employment rose from 51 percent to 71 percent. However, the average wage of ultra-Orthodox employees was less than 80 percent of the average wage in the economy. Similarly, while in 2014 74 percent of Haredi women were employed – up from 55 percent in 2005 – in 2013, Harediwomen earned 5,838 NIS ($1554.) per month compared with 8,066 NIS ($2147.) for all Israeli women.

Last year, Malach presented a Master Plan for Ultra-Orthodox Employment in Israel to the government, currently in its first stages of implementation. Rather than focusing on participation in the workforce, Malach and his team suggested increasing Haredi income levels, encouraging Haredi employees to work longer hours and improving the possibilities of these workers to receive promotions through expanded occupational training and academic programs and incentives for non-Orthodox workers to hire ultra-Orthodox staff.

Similarly, despite its size, the Arab Israeli community contributes only 8 percent to the country’s GDP, according to Younis. Arab women’s labor participation rate is 34.7 percent, up from 27 percent in 2012, but nearly 45 percent below the work participation rates for Jewish women, as reported by the Interagency Task Force on Israeli Arab Issues.

“Within five year, Israel will be lacking up to 10,000 engineers and the Jewish community cannot supply that demand,” explained Younis. “[High-tech integration] is a win-win for both parties.”

Younis said barriers to entry for the Arab Israeli community include fear of acceptance (only 50 percent of Arab graduates from engineering college apply for jobs with Israeli companies); location, in that the majority of Israel’s high-tech scene is concentrated in the center of the country and the majority of Arab Israelis live in the periphery; language; and lack of connections through military service.

NGOs have been working alongside the government to help train Arab entrepreneurs and leaders to overcome these barriers. One of those NGOs is PresenTense Israel, whichspearheaded NazTech, the first startup accelerator for Arab entrepreneurs in Israel.

“The numbers are quantifiable,” says PresenTense Israel head Guy Spigelman. “There are around 70 funded startups led by Arabs in Israel at the moment and our graduates are over 10 of those. … They are getting funding from venture capital funds, they are employing people. And most run mixed Jewish-Arab companies, which are also building society.”

Spigelman says it is becoming increasingly obvious that Israel must develop a society where all of its citizens have opportunities to thrive.

“It is not enough to hire Arabs at Jewish companies,” he says. “We should be encouraging young Arabs to dream about opening their own businesses and to be entrepreneurial. … We need to make sure all parts of society are part of the Israeli success story.”

Younis and Davidovitz will be in the States to tell their collective stories later this month, at the International Lion of Judah Conference and at a special “Minority Women Tech Leaders” event co-sponsored by the Maryland/Israel Development Center, the Jewish Community Relations Council of Greater Washington, the Greater Washington Forum on Israeli Arab Issues, the Embassy of Israel to the United States, New Israel Fund and HeraHub.

Full disclosure: Maayan Jaffe-Hoffman is director of international communications at IDI, where Malach also works.


President Reuven 'Ruvi' Rivlin visited Alpha Omega on April 6th, 2016

President Reuven 'Ruvi' Rivlin held a visit in Nazareth, where he had a meeting at Alpha Omega’s headquarter offices in Nazareth industrial park, there he met with CEOs and directors of leading Israeli and international companies who are participating in the “Collective Impact initiative”; that encourages and promotes senior employment for employees from the Arab community 

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