July 3rd, 2014

Of Torahs and Tablets

Tel Aviv

Israelis are in shock after the murder of three teenagers near Hebron. Tensions are running high as leaders weigh how best to respond to escalating violence. But beyond the conflict, Israelis are also tackling more quotidian concerns, like access to business opportunities and technology.

“It’s a different country,” my taxi driver says as we enter the cheek-by-jowl neighborhoods of Bnei Brak, a small city east of Tel Aviv that is heavily populated by ultraorthodox Jews. Pointing at the black-clad men milling about outside, he says: “We don’t need them in the army but they should at least work and pay taxes . . . Instead, they just study in religious schools.”

It’s a familiar complaint among Israel’s secular population, which tends to regard the ultraorthodox, or haredim, as scroungers. Haredis receive generous tax breaks and benefits while the unemployment rate among them remains high. More than half of working-age haredi men are unemployed, according to a state labor-force survey.

Yet Bnei Brak and other religious areas are also edging their way into Israel’s high-tech scene, with residents providing a relatively cheap work force for the country’s technology industry. The low staff costs coupled with government subsidies for employers who hire haredim mean that many companies in Israel can now compete with outsourcing services in faraway places like India and Russia.

One such company, microelectronics firm Rachip, employs 100 haredi women at its Bnei Brak office. Racheli Ganot, a 37-year-old ultraorthodox mother of three, founded Rachip in 2007 in order, she says, “to create jobs for haredi female engineers.”

Ms. Ganot also recently co-founded the Haredi High-Tech Forum together with another haredi entrepreneur, Itzik Crombie, 31. The aim of the forum, they say, is to help others in their community develop high-tech business opportunities in the “startup nation,” as the Jewish state was famously dubbed in a 2009 book.

A growing number of religious people are eager to improve their living standards, Ms. Ganot and Mr. Crombie say, defying secular Israelis’ stereotyped impressions of the community. The haredim represent Israel’s greatest economic opportunity in the next decade, the two entrepreneurs say.

“We started our companies separately,” says Mr. Crombie, who runs the tech firm iSale Global, which provides sales solutions for businesses. “But our routes into the startup scene were similar. We both noticed that haredim trying to enter the sector faced a lot of obstacles.”

For starters, the ultraorthodox can’t tap into mainstream networking opportunities, since they strictly observe separation of the sexes and other religious restrictions. “In Israel there’s a great startup ecosystem,” Mr. Crombie says. “There are countless meet-ups everyday in Tel Aviv, but if you’re haredi and you want to remain haredi, well, then you can’t go to a bar and talk about design over a beer surrounded by girls. It’s not suitable.”

The Haredi High-Tech Forum provides an alternative “ecosystem” for ultraorthodox entrepreneurs. So far, the forum has hosted two conferences in Jerusalem, sponsored by the venture-capital firm Jerusalem Venture Partners. Through initiatives like startup competitions, mentoring schemes and state-subsidized programs, investors hope to boost the haredi high-tech scene, integrate thousands into the workforce and support ultraorthodox business evangelists.

There are other obstacles, too. One is the rabbinical ban on Internet use. Back in 2000, haredi leaders in Israel forbade Internet connections at home, though the ban has since been eased. To avoid the theological risks of Web surfing, haredim have devised a “kosher Internet” by adding filters to computers and servers so that only specific websites can be accessed. Another measure that haredi-run companies like Rachip have taken is to forbid women from browsing the Internet alone and to have their monitors directed outwards so that everyone who passes by can see the screens.

Staff members at Rachip sit almost elbow-to-elbow in small rooms where doors are left open. Mobile phones, notepads and prayer books are scattered on the desks. Most of the women are between 20 and 25. They work eight-hour days, which is short by industry standards, and after work they “change hats,” as one woman puts it, to take care of their children and do housework. Their husbands study at religious schools, the women say, and that leaves the women to make careers in an otherwise male-dominated industry.

“We’re closing the gender gap in the high-tech sector,” says Ms. Ganot.

Increasingly, secular-run companies in Israel also cater to the needs of ultraorthodox men and women, says Erel Margalit, who is the founder of Jerusalem Venture Partners and a Labor Party member of the Knesset.

“The high-tech sector in Israel has never worked with just one culture because we’ve had to penetrate markets in the U.S., Europe, China and now Africa and South America,” Mr. Margalit says. “So we always respected other cultures and that goes for the haredi culture, too.”

Integrating haredim, along with Israeli Arabs, into the high-tech sector will change Israel’s productivity in a dramatic way, Mr. Margalit says, “because suddenly you have a large number of people who are paying tax and who are part of the creative fabric of society and less work is being sent offshore.”

Real change will only come about if the ultraorthodox themselves want it, Mr. Margalit says, and if high-tech companies agree to adopt affirmative-action programs for devout employees. Colleges and universities also need support to train the devout in subjects like mathematics, English and science. Most important, says Mr. Margalit, the government must make “massive investments” in encouraging this kind of change.

“It’s going to be challenging but so far the experiments are working,” says Mr. Margalit.