Biblical Nazareth goes high-tech thanks to Arab push

Kate Shuttleworth | Special for USA TODAY

Corrections & Clarifications: A previous version of this article provided the incorrect percentage of the Arab population in Israel. The nation's Arab residents make up about 21% of the population.

NAZARETH, Israel — This small biblical town is now leading the way in the country's high-tech sector thanks in part to a push for more Arab involvement.

Today there are 2,000 Arab engineers in Israel's high-tech industry, up from just 350 in 2008, according to government figures. The strongest leap is in Nazareth, Israel's largest Arab town where 600 Arab software developers lead the sector, up from just 40 in 2008.

The shift is a massive change from more than a decade ago when Arabs had little luck in securing jobs in the industry. When Nazareth resident Ameen Abu Leil, 32, graduated college in 2001, he found the segregation between Arabs and Jews was profound.

"I traveled in my car going from company to company looking for a job. Some companies kicked me out, some were nice to me and said they would come back to me, but I got zero interviews," said Leil, who eventually secured a job in 2009 with Galil Software, the first Arab high-tech venture to be part of the Authority for the Economic Development of the Arab, Druze and Circassian Sectors.

Today, the authority receives $45 million to ignite the Arab tech sector in Israel, said Aiman Saif, who heads the group. The funds are part of a $1.2 billion fund set up by Israeli Prime Minister Benjamin Netanyahu for improving the quality of life of minority groups in Israel.

"In the last month, we've approved seed funding for 11 Arab-led start-ups in Nazareth," Saif said earlier this month.

Even though the number of Arabs in high-tech jobs is increasing, they still only account for 1% of those employees despite making up about 21% of Israel's population.

"(A) lack of equal opportunities or proper infrastructure, inaccessibility to capital or barriers relating to the Arab society" mean Arabs in Israel are not taking part in the workforce, particularly the high-tech sector, Saif said in a statement last year.

"I believe this place (Israel) has to fairly hold the two people. Arabs and Jews are completely separated in Israel — there is a huge chasm," said Smadar Nehab, Jewish co-founder of Tsofen, a non-profit that integrates Israel's Arab citizens into the high-tech industry. "The only place they meet is in universities, and they still don't interact much and after they finish they go into separate workplaces."

About 400 Arabs graduate with high-tech related degrees each year, but 44% end up working as teachers, according to latest government job seeker statistics. The situation has caused Arabs seeking jobs in the industry to go to extremes.

"I was so frustrated so I decided to do something that I didn't like doing — I lied. I changed my residence on my CV to Haifa city, which is a mixed city and I also removed the fact that I could speak Arabic," said Yousef Karkaby, 34, who is now employed at Galil. "I re-sent my CV to the same companies and within three weeks — after interviews and everything — I had three contracts to chose from. The phone didn't stop ringing."

Last year was Israel's best-ever for start-ups, with $15 billion in exit deals, up from $7.6 million in 2013 and $5.6 million in 2012, according to a report by Rubi Suliman of PricewaterhouseCoopers.

Part of the success came from the sale of traffic app Waze to Google for $966 million. Overall, Israeli startups were acquired at their fastest-ever pace, with 52 start-ups sold for a total of $5 billion. In addition, 18 Israeli companies went public in 2014, raising a total of $9.8 billion compared with $1.3 billion in 2013, according to the PwC report.

Imad and Reem Younis would argue that Nazareth was a success story nearly two decades ago. The Catholic husband-and-wife duo were the first Arabs in Israel to break into the high-tech scene when they started their own company, Alpha Omega, in 1993.

Today, they have a team of 65 Jewish and Arab employees in offices in Nazareth, Germany and the United States providing neuroscience medical and research equipment to some 500 domestic and international customers.

"We wanted to return to Nazareth to create a company that would employ Arabs," said Reem Younis.