By: Anat Messing, WanakaPR
There are 430 Israeli companies currently active in Israel’s cyber sector and 60 of them were set up in 2015. Just 19 out of the 430 are public companies and all the others are privately owned. 55% have reached the actual sales stage and 9% generate annual revenues reaching more than USD 10 million. This is just some of the information revealed in a report published by the IVC research company, as part of the CyberTech international conference organized by Israel Defense, last January in Israel. The report also discloses that the Israeli cyber industry employs no less than 17,000 people and it includes 40 cyber R&D centers owned by international organizations.
The IVC report (Ami Rojkes, Israel Defense, January 24th, 2016) also mentions the rapid growth in the Israel cyber sector: Over the past four years, an average of 60 startups have been established each year. In 2015, 78 startups raised a total of USD 540 million, which compared with 2014, represented a rise of 20%. In that same year, industry exits reached a total of USD 1.2 billion – A 40% leap compared with 2014. According to the IVC report, from 2011 till the end of 2015, over 230 domestic and international investors have put money into 165 Israeli cyber companies.
All this is happening in a country with a population of just eight million; How can the vast technological blossoming, channeled over the last few years into the cyber world, can be explained? The explanations are multi-faceted and the synergy between their various parts is a force multiplier. Some of those explanations include:
- Historical Memory and Existential Anxiety. These are the hidden factors and principal motives which influence Israel’s progress and growth, during the years. The ambition born from that anxiety, made a worldwide leader in terms of entrepreneurship and hi-tech, which in recent years has included the cyber world. By its very nature, the cyber world, is intimately linked to that existential anxiety, both historical and in present times, and it is even nurtured by that anxiety.
- Cyber is one of the State of Israel’s main priorities. The Israeli government and its Prime Minister, Mr. Binyamin Netanyahu, view the cyber arena as a threatening battle zone and at the same time, an interesting attack path. As a nation fighting for its existence, Israel attributes enormous importance to the development of its abilities and control in the cyber world. For that same reason we now see budgets and investments on an unprecedented scale channeled into that world. Initiatives such as the establishment of CERT (the Computer Emergency Response Team) and the transformation of the national cyber headquarters into a government authority employing hundreds; investments routed towards Beersheba, with the aim of making it Israel’s cyber capital and much more are day to day events.
- The Cyber Industry as an Economic Engine. Israel has no valuable natural resources to export around the globe, except maybe, some salts from the world’s lowest lying sea. The agricultural industry, which was born with the state and thrived during the first years of Israel’s existence, has faded and it has been replaced by industry taking pride of place as the engine driving the Israeli economy. Hi-tech developed from the more traditional industries and in turn, it was replaced by cyber, which is now a very important source of livelihoods and a vital factor in the Israeli economy.
- The Israeli Army trains the future cyber entrepreneurs. The most famous IDF unit is 8200, which is an elite section of the Intelligence Corps, tasked with gathering intelligence and code breaking. Alumni from the unit integrate into the hi-tech industry, and particularly, in the cyber world within the hi-tech industry. It is important to note that in addition to the famous Unit 8200, there are other outstanding computing or warfare units releasing talented, bright, success seeking youngsters into the marketplace.
- Cyber oriented education and a supportive community. In recent years, special cyber studies faculties have opened in colleges and universities. As part of the national cyber plan, coordinated with the Ministry of Education, the Prime Minister’s Office and the IDF, cyber tracks have opened in high schools and the aim is to extend later on into elementary schools. Considerable efforts are also underway to encourage cyber activities in the community at large. For example: The association created by alumni from Unit 8200, not only provides study grants, but most importantly, it leverages and activates its network of members to help young entrepreneurs realize their dreams.
- Mentality and culture. Here once again, Israeli “chutzpa” provides an advantage, but it is not only the chutzpa. There is a complete tapestry of properties that makes up the Israeli mentality. Entrepreneurship, daring, self-confidence (sometimes present to excess), creativity, cognitive flexibility, the ability to improvise, informal relationships, shortcuts – These are only some of the collective gamut of Israel characteristics. Often, their expression results in raised eyebrows when Israelis meet their foreign counterparts, but undoubtedly, they are accelerants that drive the local cyber industry forward.
- Language that creates a reality. Israelis serving in the IDF are exposed on a daily basis to security issues and military terminology, so it is very easy to be inspired by the cyber arena, alongside the traditional military battlegrounds and become part of it. Cyber has penetrated into every facet of Israeli discourse. The media loves to cover the subject; people enjoy arguing about it in lounge conversations and the word cyber even appears very frequently in the Prime Minister’s speeches. Inevitably, when you talk about a subject so often, something actually happens.
- Two of the world’s largest conferences on the subject are held in tiny Israel. Cyberweek led by the Yuval Neeman Science, Technology and Security workshop the Blavatnik Interdisciplinary Cyber Research Center and the National Cyber Bureau at the Prime Minister’s Office, was held for the sixth time, last June, at Tel Aviv University. The other conference – CyberTech, led and produced by Israel Defense, is held once a year in Israel and the next conference will be held in January 2017. Both conferences attract the world’s leading companies and figures in the cyber industry, as speakers, sponsors or participants. There are also many other events, conferences, forums, meetups and gatherings on the subject.
According to a survey conducted by the Cyber Center at Israel’s Export Institute, in 2015, the international cyber market was valued at USD 75 billion and it is forecast to grow to some USD 170 billion by 2020. Israel will continue to play a large part in this festival as the world’s second biggest cyber market, hard on the heels of the number one – the USA. The Israeli ecosystem, based on close cooperation between the IDF, academia and industry, with strong governmental – state backing and accompaniment will give birth to many good ideas and pioneering cyber security initiatives in a world of continues digital transformation and the era of internet of things.