Israel cyber-security expertise lures growing share of investment

Cyber securityCyber security

The Financial Times online published a feature on Israel’s burgeoning cyber-security sector which says that it attracted 20 per cent of the industry’s global private investment last year, second only to the United States.

Israel racked up cyber-security sales worth $3.5bn to $4bn last year and attracted about 20 per cent of global private-sector investment in the burgeoning industry — putting its companies second only to their US counterparts — according to the country’s top cyber official.

The figures underscore the Jewish state’s growing credibility as a world leader in an emerging area where its military capabilities dovetail with a growing private-sector export industry. The country’s share of global investment last year was up from 10 per cent in 2014.

Israeli and foreign online security experts have described the country of only 8m people as one of five emerging “cyber powers”, alongside the US, China, Russia, and the UK.

“We think the cyber revolution is the third revolution after the agricultural and industrial one, and it’s going to change all of our lives,” Eviatar Matania, head of Israel’s National Cyber Bureau, said in an interview.

Other countries, including the UK, were “adopting our approach and our strategies” in their national cyber-security policy, he said.

Mr Matania said he expected a continuing rise in cyber attacks on industrial systems such as generators, vehicles, aircraft and medical devices.

He also warned of the danger of “cyber network influence” attacks, in which social or traditional media are hacked to sow confusion. A prominent example was the 2013 cyber attack on the Associated Press Twitter account, in which a false report was posted about two explosions in the White House that were said to have injured US president Barack Obama. The rumour caused the New York Stock Exchange to fall by 1 per cent temporarily, wiping some $136bn off stock prices.

“This is an example of much more complicated things that will happen,” Mr Matania said.

Israel’s proven cyber security expertise, and ability to capitalise on the growing vigilance and paranoia about online security among companies and governments, are fuelling growth in civilian cyber-security companies and inward investment.

Microsoft last year bought Adallom, an Israeli cloud security company, for a reported $320m in the latest of several cross-border acquisitions seen in the sector.

Israel is building a hub known as CyberSpark in the southern city of Beer-Sheva, where cyber-security companies will be located alongside military intelligence units and Ben-Gurion University, one of the country’s five cyber-research centres.

According to the National Cyber Bureau, Israel has 250 cyber-security companies and last year’s exports represent about 5 per cent of the $75bn global market. But it cautioned that the sales figures were an estimate, with final global sales numbers not yet available.

Israel was discussing strategies to tackle threats from hackers and ways to exploit economic opportunities offered by evolving technologies with a number of other countries, including the US, Germany and Japan, Mr Matania said.

It is also promoting cyber-education down to primary school level through programs developed with the education ministry.

“Since this is something new, we would like [children] to . . . have a feeling for this domain,” Mr Matania said. “Later, when they become programmers, they will have the intuition to move in this [area].”

Israel has built up its defensive and offensive capacity in cyber-security because its government institutions and military are under constant attack from hacker groups, some of which have support from state actors such as Iran, Israeli officials claim.

In November, Check Point, Israel’s biggest cyber-security company, exposed a large-scale cyber attack it said hit businesses and government targets across Saudi Arabia, diplomats in other Middle Eastern countries and a number of people with links to Iran.

The Tel Aviv-based company said it thought the attack, dubbed Rocket Kitten, had “possible ties” to Iran’s Revolutionary Guard.

Israel’s military is widely thought to have been behind the Stuxnet worm, which infiltrated computers powering the centrifuges at Iran’s Natanz nuclear facility in 2009-10. However, Israel never claimed responsibility for the attack.

Here is the link to the article in The Financial Times :