September 15, 2022
The chairman of the high-tech union, Marian Cohen, does not believe that Israeli high-tech is in crisis, but expresses concern in view of the sharp drop in recruitments, and also suggests stockpiling raw materials for the industry in times of crisis. “We need to appoint a high-tech ‘tsar’.”
Mania-depression is probably the mental state that describes in the most striking way the extreme change that has taken place in the discourse surrounding Israeli high-tech in the last year. If only a year ago the high-tech industry was still celebrating the copycat recruitments, the flood of impressive IPOs and exits and the extreme working conditions, then in recent months, against the background of the falls in the capital markets and the signs of recession in the world, the euphoria has been replaced by a great fear of a snowball that will lead to waves of layoffs, difficulty in hiring, closure of companies and curbing growth. In a conversation with Techtime, the chairman of the Association of High-Tech Companies in the Federation of Manufacturers, Marian Cohen, requests [בתמונה למעלה]to moderate the atmosphere of the disabled.
“Last year, when there was euphoria surrounding the huge fundraisings, the exits and the high values, it was clear that this was disconnected from all logic, and I warned at every possible stage that this was an unsustainable reality. In the same way, the current talk about a high-tech crisis is also exaggerated. The industry is not in crisis, but is facing difficulties and challenges. In my opinion, this is a natural, necessary and essential correction. The scope of layoffs in Israel is limited compared to the United States. Although it is not pleasant to be fired, the fired do not go out into the market without work.”
In Cohen’s opinion, the reality in which high-tech was conducted in recent years, when on the one hand a lot of capital flowed here and on the other hand the demand for workers was greater than the supply, also caused negative effects. “A byproduct of the euphoria that prevailed until recently concerned the wages of the workers. The workers asked for unreasonable increases, and the employers were between a rock and a hard place, since they had to deliver the goods to the customers and were therefore drawn into the wage spiral. High wages also have negative consequences for the economy.”
In the new circumstances, Cohen fears mainly for the ground beneath the start-up companies. “The start-up companies are the blood that will reach the brain in a few years. Development requires capital, and a lot of it. Today it is more difficult to raise capital, and the volume of fundraising has been cut dramatically. We need to make sure that the start-up companies get enough money to exist and develop.”
Appoint a “high-tech czar”
The Hi-Tech Association of the Association of Manufacturers unites more than 200 Israeli and multinational companies active in the fields of semiconductors, communications, electro-optics, medical devices, defense, software houses and more. Union companies are given the opportunity to be partners in setting European standards and enjoy a close relationship with the Export Institute and the Innovation Authority. The union also deals with aspects of fostering technological education.
Cohen was elected to the position of chairman of the union in April 2021. For the past decade, he has served as the president of the Mer Group (MER), and this after a 9-year term in which he served as the group’s CEO. “The role of the union is to represent the interests, problems and difficulties of the companies in the industry and to assist them in dealing with all of these. There are thousands of companies that are included under the definition of ‘high-tech’, from start-up companies with a few dozen employees to huge companies that export billions and employ thousands of people. Our goal is to represent a common interest of the industry and to be the mediator between the industry and the government. We also connect the industry to itself.”
How do you define what is considered “high-tech”?
“It is difficult to define precisely what is considered ‘high-tech’, because not every technological company is a high-tech company. In my opinion, any company that develops and produces systems, solutions or services that enable other industries to become advanced industries is a high-tech company. Our focus is to bring the complete companies closer to us, which include the entire food chain, from development to production, marketing and sales. These companies generate the most value.”
What are the main problems facing the industry?
“There is a lot of regulation in Israel that burdens Israeli high-tech. In the existing regulation, for example, until you can complete the construction of a factory, the original need for which you decided to invest and establish a new factory will no longer be relevant. It is important that things be much more flexible for changing needs. There are dozens of entities that the high-tech ecosystem needs to come into contact with, from government offices, municipalities, land managers, etc. A high-tech ‘tsar’ should be appointed, someone who will sit in the Prime Minister’s office and be a single address between the industry and the government, instead of having to shuffle between many offices. The problem is that there is instability in the political system and this makes it difficult to plan for the long term.”
At the macro level, Cohen believes that the global disruptions in the supply chain have revealed a fundamental risk that must be addressed. “When there is an upheaval, like with Corona, you find that you are dependent on external factors. In the State of Israel there is a shortage of raw materials for industry, and perhaps solutions should be thought of, such as the establishment of emergency warehouses, which will ensure relative independence of the supply chain.”
Published in the categories: people, start-up companies, news, interviews
Posted in tags: hi-tech union, Marian Cohen
