Israel is ranked eighth in world arms exports, and in relation to its population, Israel is the largest arms exporter in the world. There is an extensive defence industry in Israel, which began to develop even before the establishment of the state (in May 1948). Over the years, defence production has become a prominent component of the industrial sector in Israel. The defence industry market in Israel is controlled by three major companies (IAI, ELBIT, RAFAEL), but more than 300 other companies operate alongside them.

 

The Israeli defence industry is intended to address the Israeli defence system’s unique security needs, especially the Israeli Defence Forces (IDF). Arms embargoes were imposed on Israel at various times due to economic pressure from Arab countries, mostly on European countries. Those embargos were among the main motives for Israel’s large investment in research, development, and production of weapons.

The development of the defence industry in Israel was full of upheavals and contradictions. It was established to meet local security needs. However, in recent decades, very little of the defence industry’s output is related to meeting the IDF’s needs. In fact, more than 90% of the defence industry products are intended for foreign customers.

 

Initially, the defence industry’s role was derived from restrictions and embargoes imposed by other countries, such as France, on the supply of weapons and military equipment to the IDF. The defence industry was tasked with developing combat systems, platforms, and technologies to assist the IDF, especially in the face of the arms race conducted by the Arab countries in the region.

The original technologies and developments were designed to achieve improved weapons performance that exceeded or at least equalled the caliber of the enemy’s weapons.

 

From the 1970s, a different approach was adopted, which gave technological options a role in implementing changes in warfare doctrine and the perceptions of warfare.

The new technologies and systems brought not only improved weapons and tactics, but also better warfare doctrines and more efficient force operations. As a result of these the forces’ structure was influenced – in terms of their armament and equipment, their operational objectives and the capabilities they could fulfill.

Two complementary trends have supported the IDF’s growing reliance on advanced technologies and innovative self-development.

The first trend is the diverse security-industrial base that has grown, and the advanced technological skills demonstrated, has dispelled doubts and strengthened the recognition of the local industry’s ability to offer innovations that would give the IDF impressive force multipliers and operational capabilities.

The second trend is related to developments in the global arms market: It has become a “buyer’s market”, in which the willingness of Israeli arms manufacturers (under government auspices) to sell modern systems, including those based on advanced technologies, has increased. Against this background, it was also decided that only a unique self-development, which is not offered for sale in the world market and can be hidden until use on the battlefield, can provide a surprise element that may be crucial in future warfare.

With the American willingness to provide Israel with its security needs and financial aid to purchase weapons in the United States, these trends have changed the technological developments and the defence industry’s role since the 1980s.

The defence industry has begun to play an essential and significant role in Israel’s economic development and its economic structure, including developing advanced technologies for the civilian market. Defence exports began as a secondary activity designed to balance domestic demand fluctuations and to lower development and production costs for the IDF. However, over time it has grown to dimensions that place Israel among the world’s largest arms exporters.

What, then, is the secret of the Israeli defence industry and Israeli military technologies?

Here we will now analyse the unique spices and ingredients that make up the secrets of the Israeli defence industry’s innovation successes.

The Secret of the Israeli Defence Industry Power

The Israeli defence industry develops and manufactures a large and diverse number of products. Anti-tank missiles, anti-ship missiles, anti-missile interceptors, precision rockets, smart bombs, tanks, lasers, sensors, satellites, satellite launchers, unmanned aerial vehicles, unmanned ground and maritime vehicles, special operations vehicles, ships, and much more.

The defence industry’s foundation began as a real security need for developing systems and platforms to protect the State of Israel and enable its freedom and sovereignty. The defence industry is based on cultural and organisational elements, which allow innovation, daring, and advanced research and development.

Culturally, the secret components of the Israeli defence industry are:

Most of the engineers, researchers and marketing managers in the defence industry are former military personnel in the IDF and served in military service for at least three years. Most of the managerial and marketing personnel started working in the defence industry after long service and senior ranks in the IDF and the security services.

The Israeli defence industry’s development is based on engineers who understand and recognise the various operational, technological, and logistical needs and requirements from their own experience. Technological development based on deep personal knowledge of the battlefield will be reflected in the solutions it offers in terms of operational insights, technologies, training, logistics, and the like, leading to improved systems and products.

In addition, IDF officers, engineers and operations personnel are integrated into the industry’s development teams and stationed in the production facilities. These officers manage the IDF projects from the inside, defining the system engineering and the system’s specifications from all aspects, and even taking part in the development process itself.

This approach allows for deeper dialogue and understanding of the current and future needs and requirements of the systems under development, thus improving the system’s capabilities and performance in all aspects.

Moreover, the defence industries’ joint work with the IDF (and academia) produces identification and closeness between the stakeholders and creates a higher motivation among the industry’s engineers to develop better products with more advanced capabilities.

The second cultural element is developing an organisational and personnel culture, which encourages IDF officers and the defence industry members to think creatively, think outside the box, dare, try and test boundaries and capabilities.

This culture is also reflected in the relatively great freedom that junior engineers and young officers enjoy to carry out research activities and proof of concept studies in parallel with their day-to-day tasks while performing their duties.

This culture creates energy and motivation among all personnel to find sophisticated solutions to problems and find technology development ideas. For example, in the IDF and industries, everyone, from juniors to seniors, reserves the right to offer development ideas to cope with problems and operational gaps or improve operational and technological capabilities.

In this regard, it should be noted that there is great openness in the IDF to accept and assimilate new technologies that provide solutions to operational problems and technologies that change perceptions, doctrines, and especially mindsets.

This culture also supports pluralism, acceptance of failures, renewed attempts, and learning. Without these components, the wheels of creativity and innovation cannot be driven.

The last aspect in the secret of the Israeli defence industry’s unique ingredients is the understanding that without technological solutions and innovation Israel will not survive the emerging threats, given its size and political inferiority vis-à-vis the Arab countries and terrorist organisations.

This sense of mission is also an essential factor among development engineers in the defence industry. The first prime minister of the State of Israel, David Ben-Gurion, said in 1957 that “every soldier in the IDF should know that the entire campaign hangs on his shoulders.”

On the managerial-organisational side, several elements can be specified.

The first element concerning the professional level and development processes touches on one of the main specialisations developed in the Israeli defence industry. It is systems engineering, which combines operational elements, intelligence, and understands operational gaps and requirements.

The Operational Engineering

Operational Engineering, in a holistic point of view, is taking into consideration the military campaign conditions, the combat soldiers, systems operation, the platform, the environment, and the technological intelligence.

The technological intelligence presents the existing and emerging threats that are expected to appear on the battlefield.

Operational engineering occurs in all development stages – needs and requirements specifications, systems specifications, research and development processes, experimental and testing processes, and even the most essential stage – the systems training and assimilation phase at the operational and technological levels.

Of course, Israel’s security arena and the proliferation of fighting in the region allow Israeli weapons to be tested under combat and operational conditions, not just in laboratory conditions. The accumulated operational experience is applied in all aspects of systems development and improvements. This is a significant factor in developing weapons for future generations and upgrading existing weapons and systems.

The second element is the military and security research and development processes, most of which are managed by one central body, MAFAT (DDR&D – The Directorate for Defence Research and Development). MAFAT operates under the Ministry of Defence, with huge budgets, whose entire functions are to examine technological infrastructure, invest in technology research and development, and invest in the defence industries innovation, even if they do not reach technical or operational maturity.

MAFAT also examines and funds research to integrate civilian technologies, from the best Israeli high-tech and start-up companies, in future combat systems.

MAFAT’s budgets and the Israeli Ministry of Defence’s assistance are fuel for developing new and innovative technologies in the defence industry.

And finally, the last element is the strange combination of the fruitful competition between the defence companies and the occasional cooperation between them. This combination exists thanks to the Ministry of Defence encouraging it. The defence industries understand that collaborations promote sales. Each side brings its strengths and technologies to be integrative, sophisticated, and advanced combat systems.

Summary

Israel has an extensive and advanced defence industry, which includes more than 300 different companies. The Israeli defence industry’s roots lie in the days before the founding of the state when the Jewish community in Israel defended itself against the Arab terrorist attacks and acted against the British Mandate.

The significant accelerating factor in the development of Israeli defence industries was the French embargo in the late 1960s and early 1970s, when Charles de Gaulle’s administration suspended sales of aircraft, missile boats, and other weapons to Israel, given Arab pressure and France’s dependence on Arab oil.

The Israeli defence industry was required to develop technologies and systems that would help the IDF deal with the threats and massive force potential of Arab armies, equipped with the best technologies of the Soviet Union.

Since then, the Israeli defence industry has developed and, in recent decades, joined the ranks of the eight largest arms exporters in the world, even though its population is about nine million and its economic resources are limited. The defence industry has become the spearhead of the economy and is a livelihood source for many Israeli citizens.

Israel’s defence industries develop and manufacture aircraft, ships, autonomous tools, intelligence systems, cyber, satellites, missiles, and advanced armament. All of these combine the best technologies and operational and technological capabilities.

The secrets of the growing prowess of the Israeli defence industry’s R&D processes are based on an organisational culture that promotes pluralism, creativity, daring, allowing for mistakes and learning processes; all this combined with the practical knowledge of engineers from industry along with military personnel enable the development of unique systems and technologies.

The corporate culture is based on the guidance and control of the Ministry of Defence, which encourages competition as well as cooperation, along with huge government budgets invested in the defence industries, which support the development of ideas, technologies, and solutions.

These budgets are in addition to the research and development budgets that the various IDF arms – the Navy, the Air Force, the Intelligence Corps, and the Army – invest in developing combat systems and platforms.

Despite the many challenges, the Israeli defence industries have constantly evolved and innovated to enable the IDF and the defence establishment to deal with future threats to Israel’s security.

–The writer is a former commander served in the Israeli navy for 23 years. A PhD in Defense and Security Studies, he was a senior consultant at the Israeli National Cyber Directorate. He is a recipient of various Israeli awards including Prime Minister’s Decoration of Excellence. The views expressed are personal and do not necessarily reflect the views of Raksha Anirveda