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Israel Claims $3B in Cyber Exports; 2nd Only to US

Netanyahu: 'We Have a Land Flowing With Milk and Cyber'

Jun. 20, 2014 - 03:19PM   |  
By BARBARA OPALL-ROME   |   Comments
ISRAEL-CYBER-SECURITY-NETANYAHU
Cyber Champion: Israeli Prime Minister Benjamin Netanyahu, showing a mobile phone during his opening speech at the CyberTech 2014 international conference Jan. 27 in Tel-Aviv, has made it a personal and national goal to elevate Israel's status as a global cyber power. (JACK GUEZ/AFP/Getty Images)
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HERZLIYA, ISRAEL — Israeli exports of cyber-related products and services last year reached $3 billion, some 5 percent of the global market and more than all other nations combined apart from the United States, according to Israel’s National Cyber Bureau (NCB).

Officials here say the latest data, cited last week at an international conference here and presented in detail at a closed briefing of the Israeli Cabinet in late February, clearly ranks Israel as the second leading cyber exporting nation.

“As far as industry goes, Israel is a superpower indeed,” Tal Steinherz, NCB chief technology officer, told participants at a June 9 session of the annual Herzliya Conference here.

“Our part of the international market equals the entire world apart from the United States... We’re talking 5 percent of all world exports,” he said.

Itzik Ben-Israel, a retired major general who chaired a high-level task force that pushed to establish the NCB, said Israel aspires to 10 percent of the global market in less than five years.

By then, MarketsandMarkets, a Dallas-based research and consulting firm, estimates the global market to grow beyond $150 billion.

“We’re already at 5 percent. With the capabilities we have now and the programs and partnerships that are being planned, I see us realistically reaching that goal in the near term,” Ben-Israel told Defense News.

In a briefing to Cabinet ministers, NCB Director Eviatar Matanya noted that Israel’s $3 billion in 2013 exports was three times that of the United Kingdom’s.

Israeli firms last year raised $165 million in investment funding, a figure he said represents 11 percent of global capital invested in the field of cyber. According to NCB data, 14.5 percent of all the firms worldwide attracting cyber-related investment are Israeli-owned.

Israel’s cyber industry, Matanya said, comprises 20 multinational corporate-funded research-and-development centers and 200 local start-up firms.

Israeli Prime Minister Benjamin Netanyahu has made it a personal and national goal to elevate Israel’s status as a global cyber power. Since he established the NCB in 2011 — an increasingly high-priority organization that reports directly to Netanyahu’s office — the gov­ern­ment has augmented annual cyber defense spending by 30 percent, despite a budget crisis.

In parallel, Israel is investing hundreds of millions of shekels each year on infrastructure to transform the southern desert city of Beersheba into what Netanyahu calls “a global cyber hub for innovation.”

The effort involves relocation of national labs, military intelligence units and C4I organizations, a new National Cyber Command, a new industrial park co-located with Beersheba’s Ben Gurion University and a high-speed train connecting it all from the Mediterranean to the Red Sea.

“We established the National Cyber Bureau for the purpose of transforming the state of Israel into a cyber superpower,” Netanyahu told ministers after Matanya’s closed-door Cabinet session, a summary of which was provided to Defense News.

Beyond the national security requirements driving Israel’s Cyber program, Netanyahu said the national effort would yield tremendous economic benefit. “I see [NCB] also as a huge economic force multiplier. There is tremendous international interest in our abilities,” he said.

Netanyahu’s office has also directed the government’s chief scientist, the Ministry of Industry and Trade and other agencies to serve as “angels” and incubators to nurture and assist start-up firms.

“I see the Prime Minister’s Office as a public relations agency for the cyber industry,” Raviv Raz, a young chief executive officer of an Israeli start-up firm called Hybrid Security, told the June 9 Herzliya Conference panel.

Raz said his firm, which specializes in applying artificial intelligence for detection and identifi­cation of what he called “bad web­site users,” received generous funding assistance at multiple phases of the business process.

“All entrepreneurs start with an idea, and for that, the chief scientist can help ... Then there are grants to see you through the prototype phase, and this is followed by the need to raise money, where it also assists,” Raz said.

“Israel is becoming a mega power in cyber, and we are a good example of how this is happening,” he added. “The government gives, and takes no equity.”

In a Cabinet meeting this month, just days before the Jewish holiday of Shavuot (Festival of Weeks) that commemorates, in part, the first fruits of the harvest, Netanyahu likened national cyber investments to modern-day “first fruits.”

“We always knew that we have a land flowing with milk and cyber,” Netanyahu said. ■

Email: bopallrome@defensenews.com.

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