Technology May 26, 2009, 1:59PM EST

A High-Tech Job Boost for Israel's Arabs

Promising startup Galil Software is providing jobs for Arab engineers who have had few options up until now

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Israeli Arabs have never had it easy getting jobs in the country's high-tech industry. Even when times were booming and work was plentiful, Arab engineers found it difficult—and in many cases impossible—to get their foot in the door because Israel's high-tech industry is dominated by a Jewish old-boy network, where military service and connections play a key role in getting hired.

Arab engineers are at a major disadvantage since few serve in the army or have other entrées to the country's high-tech elite. After completing their university degrees, many are thus forced to take positions in professions such as teaching or go into family businesses. But their plight may just be starting to improve with the success of Galil Software, a rare Israeli Arab high-tech startup.

The idea was the initiative of a Canadian Jew who immigrated to Israel in the mid-1990s and went to work for Comverse Technologies (CMVT), a leading Israeli telecommunications company. "It amazed me over the years that the huge potential in the Arab sector was going untapped," says Jimmy Levy, a former senior executive at Tel Aviv's Comverse. There are no official statistics but estimates put the number of Israeli Arabs with degrees in relevant technology fields at 15,000 to 20,000. While the Arab minority makes up 20% of the Jewish state's population of 7.5 million, Arabs constitute fewer than 2% of the workers in Israel's high-tech industry.

CEO's Impressive Credentials

Levy persuaded a group of high-powered Israeli entrepreneurs, including former Comverse Chief Executive Zeev Bregman, to back him in setting up Galil, which offers custom software development and systems integration. So far, investors have put $2 million into the privately held company.

Levy then recruited Inas Said, an Israeli Arab, to be CEO of the new venture. The 43-year-old electrical engineer had an impressive résumé: After studying in Israel at the Technion Israel Institute of Technology, he left to work in Germany and in the U.S. for telecommunications giants Ericsson (ERIC) and Nokia (NOK), and later, for continuous-computing specialist Stratus Technologies. Said returned to Israel in 2004 to be closer to his family and was hired by ECI Telecom, where he was one of a handful of Arab employees out of a total workforce of several thousand.

Lured by the chance to establish a new company, Said set up shop in March 2008 in Nazareth. Located just a block away from the modern Church of the Annunciation—built on the site where the angel Gabriel is said to have told Mary she would bear God's son—the startup now employs 45 engineers. More than half of them weren't previously employed in the field for which they had been trained. Galil is already planning to double its workforce by the end of the year.

That's no small feat at a time when the local high-tech industry is laying off workers as the global economic downturn takes a heavy toll on the sector. Galil is focusing initially on grabbing outsourced jobs from other Israeli firms that might otherwise send work to India or other offshore hubs to reduce development costs. Salaries of engineers in India are typically 60% to 70% lower than in Israel.