Israel’s Cyberpower Strategy

Press statement by Prime Minister of Israel Benjamin Netanyahu at the European Union headquarters in Brussels, Belgium on Dec. 11, 2017.

Ten years ago, at the first one-day conference on “Cyber-warfare” at Tel-Aviv University, former Prime Minister Netanyahu proposed one clear goal: that Israel would become one of the top five “cyberpowers” in the world. A decade later, did Israel achieve its goal? And if so, what constitute Israel’s explicit and implicit tenets of its cyberpower strategy?

By Guy-Philippe Goldstein

Israel’s cyberpower in 2021

Cyberpower can be assessed at least via four dimensions: offense; defense; underlying industrial capabilities; and overall influence.

A net assessment of offensive cyberspace effectiveness is difficult. Cyber-attack abilities are by nature obfuscated. Still – open-source reports have highlighted Israel’s advanced cyberwarfare capabilities. Cyberwarfare was used during “Operation Orchard”, the Israel Air Force bombing of a suspected nuclear plant at Al Kibar in Syria in 2007 assisted by a digital “kill switch” in Syrian radar systems. The Stuxnet worm, a cyberweapon co-developed at least by the US and Israel, managed by the end of the 2000s to successfully remotely sabotage Iran’s nuclear enrichment plant in Natanz. A decade later, in May 2020, another Israeli cyber-attack against one of Bandar Abbas key port facility in Iran left operations “in total disarray”. Underlying these operational successes are offensive capabilities such as Unit 8-200, already approximatively 5.000-members strong by the mid-2010s.

Israel’s defensive cyber capabilities are also very significant. They include the C4I Directorate of the army and on the civilian side, other agencies such as the Israeli National Cyber Directorate (INCD), endowed initially with a $130 million yearly budget in 2011. Beyond agencies, there are real-life results. During the Covid-19 crisis in 2020, France or the United States experienced an increase in cybersecurity incidents from 200% to 400%. Israel experienced a relatively smaller increase of 50% – despite a very developed technology sector, constituting 12% of Israel’s GDP in 2020.

These strengths are reinforced by a vibrant cybersecurity industry of approximately 20,000 people.The startup cybersecurity ecosystem, with more than 700 startups, has attracted 31% in 2020 of global venture corporate funding in cybersecurity and even 41% in the first half of 2021. About a third of the 30+ cybersecurity unicorns in the world are Israeli – while many Israeli cybersecurity professionals participate in the top management of US cybersecurity firms or cybersecurity departments at major US banks.

Such capabilities have translated into new sources of influences. Israel has conducted both joint covert operations and cyber exercises with the United States. By July 2021, the head of INCD, Ygal Unna, would announce that Israel was cooperating with 90 countries in the world, including advanced cyber-cooperation with 24 countries and organizations such as India, Greece, the World Bank, or Morocco.

Considering these results, Israel has indeed managed to become one of the leading global cyberpowers. How did it achieve such a position?

Strategy and principles for Israels Cyberpower

The INCD published a national cyber security strategy in 2017, highlighting a 3-layers framework to cyber-defense: first, aggregate robustness or “day-to-day” cybersecurity; second, systemic resilience in case of incidents; third, national cyber defense in case of serious threats, including all deterrent tools. Yet, understanding Israel’s cyberstrategy requires to assess both Israel’s strategic culture and also principles set up by the National Cyber Initiative, a taskforce of 80+ experts led by Pr. Itzhak Ben-Israel in 2010-2011. This period constitutes what Evyatar Matiana, the first director of the INCD, called the “tipping point” of Israel’s cyber development. It led to the August 2011 Government Resolution creating the predecessor of the INCD, an agency instrumental to move from principles to real-life capabilities.

Engage a very hostile environment – Because of its history, the struggle for the survival is at the heart of Israel’s strategic culture. Reinforced by national military duties, security as the paramount common good permeates civilian life. It also yields two important traits. First, the necessity to demonstrate deterrence abilities. In the cyber realm, a recent example of this is the Israeli retaliation against the terminal at Bandar Abbas in May 2020 after Iranian cyber-attacks against water treatment plants. Second, the necessity to find export opportunities for defense solutions to sustainably develop defense capabilities. This principle is explicitly cited as foundational to Israel’s cyber-strategy “[…] with two interconnected goals: mitigating security risks and increasing resilience on the one hand, and leveraging opportunities enabled by the developing cyberspace on the other hand.”1

with a qualitative edge – In the formative years of the state, Prime Minister Ben Gurion had set up to offset the quantitative strength of Arab armies by a qualitative edge. This has carried forth to this day, from drones to cyberweapons. To be innovative means to “get there first” to achieve unrivalled abilities. Consequently, Israel was among the first nations to set up civilian and military cyber units in the 1990s, as it is today the first country to have set up a national emergency phone line for cyber-incidents. Bleeding-edge innovation is at the very heart of Israel’s cyber strategy. This also means that there is no real place to be a follower and to duplicate what already exists elsewhere.

Leveraging human talent – Human capital is Israel’s main strengths. In the cyber-realm, it has translated into multiple programs from cyber-training in middle-school and high school level to academia with cyber programs in six major universities, including Ben-Gurion University, around which is set up Beer-Sheva’s CyberSpark campus. The lesson here is that there is no key asset, whether a telecom infrastructure or a particular technology, that trumps talent. This is especially true in the cyber realm with a very fast-paced turnover in terms of technological generations. It also fits well with a digital economy dominating XXIst century capitalism and where the most critical activity resides in software engineering, a capital-light, highly talent-dependent activity. The only sustainable, adaptable advantage resides in superior human talent.

Organized in an ecosystem, open to the world – Talent per itself is not sufficient. It requires to be integrated into a pluri-disciplinary network of other cyber-professionals, military officers, academic researchers or business investors in order to extract maximum value and to achieve bleeding-edge innovation or to exploit commercial opportunities (or both). In Israel, this has been achieved at many levels, including with the Cyber unit of MAFAT, Israel’s directorate of R&D at the Ministry of Defense, that started to establish several partnerships between the military and start-ups in the first part of the 2010s. This ecosystem also needs funding. This comes in large part from foreign sources that also helps to open-up foreign markets, starting with the most important market in the digital realm: that of the United States. It does not erode sovereignty, an issue that is extremely sensitive in Israel. On the contrary: funding creates dependency toward the Israeli ecosystem and thus it yields influence in favor of Israel, especially as it would be too costly to duplicate teams. There again, the key advantage is not in capital. It resides in a superior ecosystem of human talent.

Led by forward-looking leadership – The personal involvement of former Prime Minister Netanyahu is a key factor mentioned to the author of these lines by key Israeli cyber-professionals. Contrary to other expert reviews, the National Cyber Initiative did lead to a government resolution in August 2011 in part because of the personal convictions of the then Premier, stemming from visits to military units, extended discussions with Pr. Ben-Israel and perhaps even a fictional reading also suggested by Pr. Ben-Israel. Consequently, Prime Minister Netanyahu did participate at each CyberWeek conference from 2011 to 2019. This “tradition” has been continued in 2021 when both the defense minister and the new Prime Minister Naftali Bennett also gave keynotes – and both in English, testifying to their understanding of cyber-power development in a networked world. Additionally, the new Prime Minister is currently the only head of the Executive branch in the world with a past career in cybersecurity: the deep engagement of the highest echelon of the State in cybersecurity matters is certain to continue.

The way forward

Israel’s success in building one of the top global cyber-powers has brought new challenges. Its main asset, human talent, is a limited resource. The nation-state of Israel may have to develop new national strategies to fuel with human talent its innovation engine. Additionally, its status as a global hub for cyber-cooperation carries new responsibilities toward friendly nations. But such responsibilities cannot be sustained if headline news are repleted with operations such as the Pegasus affair – an offensive cyberweapon sold by NSO Group, an Israeli firm, that may have helped new friends of Israel to spy on older ones. Strategic decisions will have to be made. Yet, Israel provides a model that has achieved an unparallel success in terms of cyber-strategy. Without the need for a global telecom company or a specific technology, it has focused on what is the most and perhaps the only critical asset for value creation and defense in the digital economy: an ecosystem of human talent. With limited resources, it has turned an emerging security risk into an opportunity with economic benefits. A nation able to fiercely defend its sovereignty, it has understood that in the networked world of the XXIst century, influence building requires to be a hub open to the rest of the world, from its US ally to new friends in the Arab world. For other sovereign western nations, it will be hard not to see in this success at least ingredients for their own way forward.

Guy-Philippe Goldstein is a lecturer at the School of Economic Warfare (EGE) in Paris and advisor for PwC and ExponCapital. He is also the author of Babel Minute Zero, a novel about cyberwarfare that has acquired a selected audience among national security circles in Israel.

1 Lior Tabansky & Ythzak Ben-Israel, Cybersecurity in Israel, Springer Brief in Cybersecurity, Springer Verlag, 2015; Other source: Israel National Cyber Security Strategy in Brief, INCD, September 2017; INCD Annual Summary 2020; Yaakov Katz, Amir Bohbot, “The Weapon Wizards”, St Martin’s Press, 2017; Cyber capabilities and national power: A Net Assessment”, IISS, 2021; Dr. Matiana speech at CyberWeek 2021 (accessible at https://www.youtube.com/watch?v=1oQ5JlIAY2A)