FARNBOROUGH, England — In Israel, defense investments are, in the words of Israel Aerospace Industries Chairman Harel Locker, “a matter of survival.”

And the process of enabling such investments is something with which he is quite familiar, having planned, implemented and executed the government's economic policies and programs and budget approval, including for defense, as the director general of the Prime Minister's Office. But to Locker, in his role as IAI chairman for not even a year, investment can only come after recognition that the industry — and the threat — are in a state of flux.

Defense News spoke to Locker in July about the role of IAI in supporting both domestic and international security, and how the relationship with the United States and American companies factors into ambitions for corporate growth and political stability.

From your perspective, how have defense priorities for Israel changed?

The war today has changed dramatically. There is no real clear enemy. The enemy is very vague, and the civilian becomes part of the frontier. The terror organizations and militias are attacking in our homes. So today you need much better technology to face the new threats that Israel is facing, that the West is facing. And for facing those threats, you need a more accurate technology, more accurate intelligence, because the enemy is [no longer] a clear country and you do not have a front line. Those organizations are hiding among civilians. You have to be much more accurate when you are bombing because you do not want to hurt uninvolved civilians.

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In Israel you are dealing with the threat of Hamas and actual conflict happening on the ground, within and along your borders. Even Iran is an increasing threat. That is different than in the U.S.

You cannot just win a war against a regular army within six days, or 10 days, or 50 days, or even six years like World War II. You are really facing new threats, new challenges, and for those threats you need technology. You need accurate intelligence. And it’s not just getting intelligence for one operation. You need intelligence online — a very accurate intelligence because you do not want to hurt any uninvolved civilians. And the frontier became the cities, and the civilians are involved — our civilians, the Western civilians — are involved in those actions—combat actions. So you really need to protect every aspect of your life. And for that purpose, you need intelligence, you need technology, you need the accurate technology, which costs a lot.

It’s not regular warfare. It costs a lot. You need to invest a lot in technology. All the West is increasing their defense budgets, including Israel, because of the new threats.

In the U.S., companies are independent from the government. In Israel, there is some state control, some state interest in the defense industry. How does the relationship function in terms of ensuring the right investments are made?

We are part of the Israeli defense establishment. We are wholly owned by our government, and we are working closely with our government to produce those means and weapons for defense and technology that will be first used in our army, in our defense system. In Israel it is a matter of survival.

This is part of our life — from the very beginning of our country. We have to survive in this area. Without defense, without defending ourselves, there is no country of Israel.

I would say in a humble way, IAI has a very important role in the defense establishment and defense policy of the state of Israel. Therefore, the government works with us and the Defense Ministry works with us a lot. Although the Israeli government is only like 20 percent of our [total revenue], still, it is the most important. This is proven in combat. This is the most sophisticated technology in the world, I would say. We cannot afford anything else.

You recently pointed to what you called “multiple significant challenges in coming years.” Can you describe what you mean?

The world is changing rapidly. Technology is changing rapidly, and today, defense is technology. And civilian technology is closing the gap — it might be even better than defense technology. We could have not imagined 30 years ago that defense technology will be equal to civil technology. Today, this is a situation.

And we have to face the future. The development of warfare of the front line, it changes very fast. You cannot project what will happen 10 years from now. In ’45 there was a standard of defense of the Western world that was different than in the ’80s, and today, nowadays — [there are] different standards again. We — at IAI — have decided that we have to build a new strategy for the next 10 to 15 years with new products, trying to catch all the rapidly changing circumstances of the defense industry and the defense world. And nobody really knows where it is going. In World War II, it was the climax of the industrial revolution. One may have a clue that nowadays, with [the internet of things] and robotics and unmanned and artificial intelligence, this might be the new defense industry and the new warfare.

We need to learn from the past where the first industrial revolution had a climax and was very influential [in conflict]. We see that shift now. You can shut down a city today. You do not have to bomb it.

We have to cope with the changes. And we have to develop state-of-the-art of technology and know where it is going. There is a transition here. We have excellent technology. We have excellent people — 10,000 engineers and technicians. We are being supported by the Israeli government, and we are able to be one of the top corporations in the defense industry.

IAI is a leader in unmanned and has been for several years now. There has been an effort in the U.S. to loosen some of the restrictions for export of unmanned systems, creating more opportunities in theory for some of the U.S. manufacturers. Do you see that as shaking up the competition at all?

I see the U.S. as a big part of us. My philosophy is that we should partner with U.S. With the excellent relationship between the two nations, a huge synergy between the two industries – on the contrary, I think we can enjoy this loosening of restrictions. We can enjoy it in Israel. Who else would we partner with? If we are able at IAI to have more partnerships with U.S. corporations, the better for us.

We have some problems to get into markets — political problems. And all kinds of defense establishments in different countries are thinking: “OK, we do not need to work with Israel. We have the Americans.” So if the American can use our capabilities and abilities, and we as junior partners can join them, it will be for our benefit.

I do not see it as a threat. On the contrary, I see it as an opportunity.

Where do you see the future of unmanned? How will that technology evolve?

All those manned aircraft? Unmanned aircraft will replace them. I apologize to all the pilots, but 10, 15 years from now, there is no need [for them].

Across the various aerospace platforms?

Everything. Absolutely. And sea vessels, submarines — everything will be unmanned. It relates to this fourth revolution. You know? If you have autonomous cars in a very hectic city like New York 10 or 15 years from now or 20 years from now, then aircraft should not be any problem.

How do you describe the relationship between Israel and the United States under the Trump administration?

First, the basic values of the two nations are the same. It does not matter which administration [is in the White House]. It is a friendship between two nations and two democracies. With the Trump administration, it is [a] special relationship. [Among other things] Trump is supporting Israel and Israeli policy toward Iran. There are still evil countries that are threatening democracy. Iran is financing all kinds of terror organizations against the whole world, not only in Israel. We are just the frontier.

But the basic idea was a friendship between the two nations. Nothing will change it.

What needs to happen to ensure Iran does not end up with nuclear weapons?

Iran should become a democracy. And when the people get control and they have democracy, I am sure the Iranian people would not want to have the war in Syria or Yemen or in Israel. Practically speaking, until that happens, I would leave it to both [U.S. and Israeli] administrations.

Jill Aitoro is editor of Defense News. She is also executive editor of Sightline Media's Business-to-Government group, including Defense News, C4ISRNET, Federal Times and Fifth Domain. She brings over 15 years’ experience in editing and reporting on defense and federal programs, policy, procurement, and technology.

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