The new government’s efforts to overhaul the judiciary could drive away foreign investors while concessions to the ultra-Orthodox on issues of education could destroy the knowledge base necessary for an advanced information economy, several prominent technology sector leaders told Haaretz on Tuesday, echoing a recent letter warning Prime Minister-designate Benjamin Netanyahu that his policies could have “devastating consequences for the economy.”
The open letter, which was initiated by Qumra Capital co-founder Erez Shachar and signed by over a hundred senior industry officials, was published last Thursday and cautioned against the consequences of “harming the court’s status, as well as harming the rights of minorities based on religion, race, gender or sexual orientation,” asserting that such moves would “constitute a real existential threat to the glorious high-tech industry that has been built in Israel with great effort over the past three decades.”
“In their wake, we may also see an (exodus) of technology companies, all of them international companies in essence, outside of Israel, as well as their tax payments,” the letter contended. “You of all people should understand and know that this could have devastating consequences for the economy and society in Israel.
Such a letter from the united leaders of the so-called “Silicon Wadi” is unprecedented, said Eran Shir, the CEO of Nexar, a firm which develops smart dash cams.
“I think that it’s a first step. The significance is limited because it’s just a first step and the world doesn’t change by sending a letter, you need to be realistic, but it’s something we need to do,” he explained, asserting that he felt that it was his “civic duty” to raise a “red flag.”
“It’s like watching your brother go drive when he is drunk. You cannot just disregard it,” he contended. “We need to do whatever we can because we live here, and we want to be a successful country and not in a failed state.”
At issue, he and other signatories said, were a number of things, but especially the incoming government’s efforts to rein in the power of the High Court through the passage of what is known as an “override clause,” a mechanism by which would permit the Knesset to pass laws that contradict the country’s 12 Basic Laws and eliminate the judiciary’s ability to nullify them.
“I’m worried about the decline or the harm they are planning to do to the judicial system, to the rights of minorities of all sorts, first and foremost the Israeli Arabs, and the blurring or elimination of the Green Line,” explained entrepreneur Orni Petruschka.
“In my mind it’s disastrous for Israel so for me to sign this letter was very natural,” he said, noting that Netanyahu’s decision to substantially boost public funding for ultra-Orthodox institutions that don’t teach core secular subjects such as math and English could further widen “brewing disparities in Israeli society in terms of education.”
According to Education Ministry documents obtained by Haaretz, in 2019 more than 90,000 Haredi students – 27 percent of all ultra-Orthodox students – were excused from studying core curriculum secular subjects that year. The documents also show that the number of high school-level yeshivas that received exemptions from offering the standardized high school matriculation exams doubled over the prior decade.
“Core curriculum studies are a prerequisite for any contribution to the Israeli economy” and while “Netanyahu won’t say ‘the high-tech people are saying this [so] I’ll change my policy,’ [the letter] is one brick in the wall which needs to be built here to make that change.”
Shir agreed, telling Haaretz that the “demographic challenge” posed by a growing minority with little to no secular education was a “huge issue.”
Even putting the ultra-Orthodox aside, Israel has failed to produce enough people with the education sufficient to enter the technology sector and Israel’s continued economic success is “only a question of how many skilled citizens the education system manages to produce. If we could produce more there would be more in high-tech.”
“This is an issue for the future of Israel, and it’s also an issue for the present, and it’s an issue that, to a large extent, has already failed. We’re very good at leveraging the top 5-10% of talent, but we’re very bad in providing the bottom 85% of citizens with the right skills to take part in the new global economy,” he said,
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And while he offered the disclaimer that he isn’t a spokesman for the tech industry, Shir said that he believes that many of his colleagues would continue to speak out because while the foundation of modern tech economy is “trust, liberalism and the ability to really kind of understand the rules of the game and have them be stable,” the incoming coalition is “trying to do is to change all of that.”
“We need to show an example of our stability and how the system is working and to give confidence to investors coming from abroad that everything is managing very well,” echoed venture capitalist Buchris.
“Most money invested in startups in Israel, 75%, is coming from abroad and if this changes it will be problematic for us.”
Corin Degani contributed to this report.
