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High-Tech Sector Draws Diverse Expats to Tel Aviv

TEL AVIV—When Curtis Peterson found himself single in Tel Aviv, having first moved to the city to be with his Israeli partner, it didn’t occur to him to go back home to New York. Rather, the international development specialist sought to stay and work at a high-tech startup.

The decision was not a unique one—not in this Mediterranean city that boasts immigrants from across the globe, a growing English-language social scene, and more than 1,000 startups, or one for each 431 residents.

But Mr. Peterson says he doesn’t really know anyone else quite like him, meaning a foreign-born, non-Jewish person able to secure a work visa and join Israel’s growing high-tech sector, which has come to rival that of Silicon Valley. This is mainly because such visas are hard to come by in Israel, where immigration policy revolves around Jewish identity.

Mr. Peterson is head of partnerships at MobileODT, a startup that uses smartphones to detect cancer. Due to his extensive experience in public health and grassroots activism in the developing world, MobileODT officials said they were able to secure him a five-year work visa.

“Israel can be a difficult place to live and work,” said Mr. Peterson, “but overcoming those challenges can also be rewarding.” In addition to visa challenges, he was referring to Israeli cultural norms, such as frequent arguing, even with a superior, which can be jarring at first. But this process often leads to new ideas, he said. And because Israel often faces political uncertainty, knowing how to move forward without certainty also slips into professional life, and is often a valuable business skill, he said. Here, Mr. Peterson echoes the basic thesis of the bestselling “Start-Up Nation,” a 2009 book by Dan Senor and Saul Singer, which chronicles the rise of tiny Israel in the global technology market.

There are a growing number of individuals who have managed to secure a work visa, creating the emergence of a new sort of expat around Tel Aviv

Though Mr. Petersen may not be aware of them, there are a growing number of individuals who, like him, have managed to secure a work visa, creating the emergence of a new sort of expat around Tel Aviv: those who move to Israel for its high-tech and entrepreneurial prowess rather than for Judaism, Zionism or family connections. And a law passed recently creating a so-called innovation visa could, in theory, boost this trend and make access to Israeli expat life easier for foreign non-Jewish entrepreneurs, although in practice, demand is likely drastically to outstrip the limited supply.

“Tel Aviv has attracted a lot more than your classic Zionist immigrant,” said Jay Shultz, founder of Tel Aviv Internationals, which plans events for English speakers in Tel Aviv. The group now has 20,000 members, up from 2,000 when it began in 2006, Mr. Shultz said.

The Tel Aviv municipality and high-tech sector welcome this new sort of expat, but only a small fraction of those interested in working here are actually allowed, and the new visa program is seen by many as not nearly extensive enough. This is frustrating both for the tech industry, which is constantly thirsty for more talent and more foreign investment, and for the city of Tel Aviv itself. Only about 2% of employees in Tel Aviv startups are foreign, compared with 45% in Silicon Valley startups, and an average of 29% in startups globally, according to a recent report from Startup Compass Inc.

Israel, under its Law of Return, automatically grants citizenship to Jews or individuals with at least one Jewish grandparent, and work visas are also available to those who meet these qualifications but do not want to immigrate. Work visas for non-Jews, however, are governed by a strict quota system, as well as reserved for those with an Israeli spouse or partner.

After five years of lobbying by the tech industry, Israeli academic institutions and the Tel Aviv municipality, as well as a government task force on the issue, the economy ministry announced recently the creation of an innovation visa—a class of visa available for years in the U.S. and Europe. The visa will allow foreign entrepreneurs to work for two years on opening up high-tech ventures in Israel, with the option to extend their stay if they establish a new enterprise, the economy ministry said. The program will also give foreign entrepreneurs access to government grants for research and development.

In addition to being limited in numbers, possibly numbering in the dozens, the new program only focuses on individual entrepreneurs and doesn’t address the needs of existing startups and established companies to hire foreigners.

 

“This initial program seems like a great first step in opening up Israel to foreign talent, however it is far from complete,” said Jon Medved, a veteran Israeli venture-capitalist and CEO of OurCrowd, a crowdfunding platform. He says the industry badly needs to be open to non-Jewish interns, programmers and engineers as well as entrepreneurs in order to sustain its cutting edge. “If we import agricultural workers in the tens of thousands, we should be able to import tech workers in similar numbers. We should be opening our arms and embracing the best the world has to offer, Jewish or non-Jewish,” said Mr. Medved.

Meanwhile, amid the ongoing frustration there is hope and a growing trickle of new expats, like Mr. Peterson, carving out life in Tel Aviv.

Kentaro Sakakibara, a Japanese venture capitalist and fund manager, moved to Tel Aviv last year to open up an incubator, which has invested in 17 local startups. The name on his business card is Ken Samurai, because that’s easier for Israelis to pronounce, Mr. Sakakibara explained.


Japanese venture capitalist Kentaro Sakakibara in his ninja-themed room at Samurai House, in Tel Aviv. PHOTO: Sara Toth Stub for The Wall Street Journal
The incubator, called Samurai House, is his first outside of Japan, where Mr. Sakakibara’s fund has invested in more than 80 startups. He decided to open the company’s first overseas location in Tel Aviv because on previous visits Israelis struck him with their openness to new ideas and desire to try new things.

“Here, failure is a good thing, you get new ideas from it,” said Mr. Sakakibara, as he sat in a room at Samurai House decorated with swords and cutouts of the metal stars thrown by ninjas—each room in the accelerator has a theme based on an aspect of Japanese culture. Samurai House takes up half of the second floor in a building on Tel Aviv’s bustling Nachlat Binyamin Street, just a block away from the increasingly swank Rothschild Boulevard, where Facebook and other high-tech companies have opened recently.

Mr. Sakakibara hopes his wife and baby daughter will join him soon. He is currently traveling back to Japan every other month too see them while they wait for visas.

Not only would he like to spend more time with his daughter, but would like her to spend at least some of her childhood in Israel, where, as he said before, “failure is a good thing.”

“My wish is to bring my daughter here because this culture is so good for kids,” he said. Israel was recently ranked the fourth-best country for quality of life for expat families in a survey by InterNations GmbH.

This is all happening against the backdrop of increased immigration of Jews from the U.S., France and other developed countries to Israel, creating a more international atmosphere. In 2014, immigration from the U.S. alone increased 7% on the year, according to Nefesh B’Nefesh, an organization assisting immigrants. This trend is evident in Tel Aviv, from the growing number of English-language preschools to the popularity of Halloween celebrations at local bars.

An increasing number of organizations also cater specifically for expats who do not fit into the typical mold of a new Jewish immigrant. Despite the strict visa regime, non-Jewish expats do find a welcoming framework on the ground in Tel Aviv.

“We really strive to be an ECC, meaning an English Community Center, rather than a JCC, or Jewish Community Center,” said Elvia Fisher, founder and director of CityKids, which runs a preschool and after-school activity center in Tel Aviv. The preschool, which serves many children of non-Jewish expats, celebrates Thanksgiving and Christmas along with the Jewish holidays, focusing on common values such as hospitality or generosity rather than religious details.

But despite the proliferation of services and events in English, non-Jewish expats in Israel describe facing unique challenges that their Jewish counterparts do not. At pick-up time from CityKids parents often sit on the benches in the foyer, asking advice of each other about being a foreigner here. For many of them, it is the first time in their lives that they are in the minority. This feeling is especially sharp in Tel Aviv, which was founded as the first “modern” Hebrew city by 66 Jewish families in 1909, and does not have the same degree of religious diversity as its more ancient neighbor, Jerusalem.

“Often people ask us if we are making aliyah,” meaning immigrating to Israel under the Law of Return, said Jane Nesvog, an American expat originally from Wyoming, who lives in Jaffa, at the southern edge of Tel Aviv, with her three children and husband, an engineer hired for a project at Intel Israel. “I just sort of laugh, and say, no, we are not Jewish.”

At the same time, Ms. Nesvog, like the majority of tech expats, says her family is happy here and she would like to stay beyond the project her husband was hired for, but knows that will be difficult, if not impossible.

“I feel sad thinking about leaving all of this,” she said, referring to their home by the sea, the park nearby, the friendliness of locals, and the Tabeetha School her children attend, where children of diplomats, business people and local Arabs and Jews study together in English.

Back at the Samurai House, Mr. Sakakibara says he knows that he, too, will eventually return to Japan. But he has many colleagues at home in Japan, with funds available, who would like their turn to come to Israel to build startups, he says, and hopes at least some of them will get visas.

“So many young Japanese people would like to come here and work with the Israeli people,” he said. “I hope they will be allowed because we have a lot to learn from the Israeli people.”