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High-Tech & Technology -





n spite of the many turbulences expe-

rienced by the industry in recent years,

encouraging figures were entered (in

comparison to previous years). These mainly

concerned investments, exits and employment

options. The outlook for 2017 is still uncertain,

but the data indicates moderate optimism.

The global and local tech industries experienced

many changes and transformations during the

past year. In the two first quarters of the year,

it was notable that the market was in a static

trend, in contrast to the trend in 2015, which

was a successful year in the industry with ex-

tensive workforce recruitments.

The high-tech placement companies estimate

that 2016 was a positive year for the industry,

with an average salary increase of approx. 5%,

compared to 6.1% in the previous year. However,

10% of the industry’s recruiting weren’t aimed

to man an existing position in the company, but

rather to recruit to newly opened positioned in

various tech companies.

According to data by Ethosia, a company special-

izing in tech recruitment, the average salary of

non-executive employees in start-ups was about

NIS 20,000 per month in 2015, an increase of

32% since 2010, and x2.3 times faster than the

average increase per non-executive jobs at the

same period for the entire economy.

Women are Still Waiting

From a gender point of view, 2016 was still

a year with a higher percentage of employed

men than employed women. In spite of the in-

creased in female presence in tech companies,

Ethosia’s data indicate that still only 15% of

women hold managerial positions. The salary

gaps also remained intact. A review by Globes

found, for example, that the average monthly

salary for men software testers is an average

of about NIS 18,400, while a woman in the

same position would earn an average of NIS


According to data from the Central Bureau of

Statistics, women represent only 26% of the

employees in core tech roles, in light of the

fact that more women employees in the tech

industries work in administration and HR posi-

tions, and not in core position such as software

and hardware development.

However, in spite of the data, there is optimism

in the industry. This results from the fact that

at the end of 2016, tech placement compa-

nies reported a 2% increase in the number of

women that hold engineering positions. There

is hope in the industry that the trend would

further improve in the upcoming 2017.

From an economic perspective, the tech indus-

try continues to grow and foreign tech compa-

nies recently announced that they are expected

to invest billions of dollars in Israel. This is not

surprising since Israel is considered to be a

high-tech powerhouse.

Tax Benefits

In last August it was reported that the Minister

of Finance, Moshe Kachlon proposed tax reduc-

tions for tech companies operating in Israel, as

well as foreign companies which would be inter-

ested in operating in Israel. Kachlon’s goal was

to ease the regulation concerning mergers. His

vision was to reduce the company tax in 2017 by

about 2%, from the 25% it stood on, in August

2016. In recent months a stability clause was

also added to the tax relief bill, and this means

that the benefits are guaranteed for tech com-

panies throughout the next decade.

“It is time for the Israeli Government to take its

place under the stretcher and become a partner

that pushes you to new achievements”, said

the Minister of Finance. The chairman of the In-

novation Authority (formerly The Chief Scientist)

urged the government to take immediate steps

for promoting the scientific education in schools

in order to prevent future shortage of engineers

and programmers.

Dr. Shlomo Merkel, VP of Broadcom, responded

to the tax relief bill by saying:

“The global tax reform is more an opportunity

than a threat for Israel. I truly hope that the leg-

islation won’t be ruined by the Knesset”.

On the other hand, Ze’evi Bergman, former CEO

of Nice, opposed a tax benefits for global tech

companies, and said that there is no difference

between the small and the large companies in

the economy, from a tax planning perspective,

and therefore the bill isn’t egalitarian, and


“I was involved in purchasing companies

abroad, mainly in the USA. In many cases, we

made an economic review of transferring the

IP to Israel, and eventually we didn’t transfer

it because of the amount of tax we would have

had to pay abroad. The dramatic reduction of

dividend tax from 20% to 4% and the reduction

of company tax significantly reduces the cost of

such a transaction and might lead to IP drain

away from Israel, a result which is completely

opposite to the goal of the bill” (from a post in

Bergman’s Facebook account).

All Beginnings are Difficult

In spite of the industry’s growth, 2016 was

also characterized by significant difficulties in

The High-Tech Industry – Sector Review for 2016

By Rinat Pollack


























Foreign & Other

Israeli VC funds

Source: IVC Research Center

An Increase in Capital Raisings made by both Foreign VC Funds and













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