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The Israeli Defense Ministry has announced a reform in its defense exports controls, clearing the path for businesses in an ever-expanding market.
The changes will take effect in the coming months. From now on there will be a longer list of products cleared for export and a longer list of countries that are permitted for export by Israeli authorities. Additional reforms are also included.
In recent years, Israel has become a focal point of cyber-security technology with experts believing it to be only second to the United States in the industry.
One of Israel's main advantages is the training of its young generation during the mandatory military service where many of them receive on-hands experience in one of the country's elite intelligence or technology units.
They then enter into the civilian world and translate their knowledge into non-military applications, often becoming leading experts in their field. It is a unique symbiotic system.
The Israeli army is famous for its 8200 unit, an elite intelligence gathering unit whose graduates are often found in top positions in the country's hi-tech and cyber-security companies.
But, this is just one of the units that specializes in the arena. The small country boasts hundreds of such cyber-security firms.
According to the Israel Export Institute, the country's exports in cyber security in 2015 reached 3.5 billion U.S. dollars, which was 5 percent of the global market. Over 500 million U.S. dollars were invested in 2016 in cyber-security start-ups.
"The Israeli government made a distinction between the world of cyber that is used for protection of critical infrastructure, financial institutions and government operations and other types of cyber warfare," said Mark Gazit, CEO of ThetaRay, an Israeli firm that creates Artificial Intelligence (AI) based technology for identifying risks in complex data sets.
Gazit is also the chairman of the public board management of the Israel export institute for cyber, software and fintech.
The logic behind this distinction is at the base of the current reforms.
In a statement announcing the reforms, the Israeli Defense Export Control Agency (DECA) which is a part of the country's defense ministry, said they "took quite a few calculated risks," in the new policy.
Opening such a strategic market to more export could expose Israel to more dangers.
"The government understands that the cooperation between nations is extremely important and collaboration of data is extremely important," Gazit said.
Cyber security technology can be a grey area, defensive software for one party can sometimes easily be turned into offensive software for a hostile entity. Such technology has what is called "dual use."
The last word still remains with the Israeli Defense Ministry, which reserves the right, under the new reforms, to veto deals it deems improper or potentially harmful.
According to Gazit, many of the cyber-security firms operated largely unhindered even before the newly announced reforms.
"What's good about the reforms is that it regulates the situation. Before the reforms, companies didn't know what they can do and what they can't do. And with the new reforms, companies know exactly what they can do and they can sell freely," Gazit.
For China, the cyber-security market is of great interest. In just one example from 2016, Chinese telecommunications company Huawei purchased Israeli database security firm Hexatier.
The further opening of the blossoming Israeli market will allow for more such deals to be made.
"There is great cooperation between Chinese and Israeli scientists in this area of research," said Mark Gazit.
While the Israeli authorities have loosened the leash on exports, it is clear there will still be intense supervision on the matter.
This will allow for greater cooperation amongst countries in making the world safer and less vulnerable to cyber-attacks, but it will also allow more money to enter Israel while still safeguarding its security interests, he concluded.
(ASIA PACIFIC DAILY)
