By Dyana So, NoCamels December 10, 2014

How are imminent, and for some countries already real, cyber security threats being dealt with? For an answer to this question, the US and Europe are increasingly turning to Israel.

Israel’s startup spirit and impressive security expertise have made the country a world leader in the cyber security software and services sector. In fact Israel is now the second largest exporter of cyber products and services after the United States, with over 200 companies and dozens of research and development ventures devoted to developing cyber security.

In 2013 alone, Israel had $3 billion worth in cyber security exports, a sum that accounts for five percent of the global internet security market, which totals nearly $60 billion. Lockheed Martin, even estimates that the global cyber market will be valued soon be valued at $100 billion, which is why the American defense giant recently opened an Israeli subsidiary in the southern city of Beer Sheva.

But these impressive numbers didn’t accumulate over night; the acceleration of Israel’s cyber security sector is a public and privately driven initiative that has succeeded due to well-harnessed engineering knowledge and the country’s creative entrepreneurial spirit.

A government keen on exporting Israel’s cyber security commodity

“Everybody understands that you buy Swiss watches from Switzerland and information security from Israel,” says Udi Mokady, CEO of Cyber Ark, the largest cyber security firm in Israel, which protects the accounts of thirty of the world’s Fortune 500 companies and 15 percent of the Global 2000.

Another major factor in Israel’s cyber security prowess is generous government support for both private and public endeavors. Prime Minister Benjamin Netanyahu has expressed his faith in the successful cooperation between Israel’s private and public, or military-geared, cyber security sectors, asking that they share information and technology to address even the most complex of threats. Recently, Netanyahu established a new national authority for Operative Cyber Defense, of which he stated, “has major significance to the defense of the State of Israel in the future.” What other countries are hoping is that the initiative might have major significance for them too.

Innovating in cyber security involves a lot of bureaucratic restructuring, a task more difficult for larger countries like the US, but easier for relatively young and small-sized ones like Israel. While issues of cyber security are addressed by one body, the National Security Agency (NSA) in the US, Israel has both public bodies and private companies that are encouraged, and in some cases even forced, to cooperate. As Michael McNerney, cyber security expert and former Cyber Policy Advisor to the US Secretary of Defense, commented to Forbes, “Israel is smart to focus on a collective and participatory approach to online security because the inter-connectedness of online systems and proliferation of mobile devices make every individual a potential point for cyber-breach.”

Another essential contributor to Israel’s success is its plethora of military-trained engineers. Military service in the Israel Defense Forces is mandatory from the age of 18, and many going into the army realize the added value of becoming an engineer sooner rather than later. For this reason, Israel’s Education Ministry has set up after school programs for pupils who want to learn about programming and cyber security in middle and high school. Because of the reverence in Israeli society for the elite IDF intelligence unit 8200, these classes are in high demand. Indeed, many of the founders of cyber security startups originated in the 8200 unit, like Gil Shwed, the founder and CEO of the widely successful multinational cyber security company Checkpoint.

Removing and predicting threats

Israeli cyber security startups are good at cooperating with government agencies, but even better at beating them at their own game. Taught to sniff out hackers’ mistakes, companies like CyActive have developed predictive cyber security software that pinpoints the same damaging code hackers recycle in 94 percent of all malware. Other companies are turning to the cloud to provide security, while still others are concerned with closing off the ease of access the technology of the future will provide.

Many large corporations rely heavily on the Internet to carry out multiple external and internal business operations, meaning that the swift detection of any cyber attack on their systems is crucial in preventing damage. Israeli companies CyberX, ThetaRay Aorato, Reversing Labs, and Seculert  all specialize in anomaly-detection software that utilizes sophisticated cyber-detection strategies to identify the breach. Companies like Votiro and Hexadite provide automatic termination and protection of suspicious activities; Votiro by thoroughly inspecting digital files and removing anything harmful, and Hexadite by immediately investigating the cyber attack while simultaneously notifying the client company of the breach.

 Several Israeli cyber security firms also provide research capabilities into cyber attacks, hackers, and overall trends in cybercrime. Fortscale and SenseCy  both help their clients by providing them with informative analytics to better understand the nature of cyber attacks they are vulnerable to. Still others seek to look beyond traditional software protection. BioCatch uses behavioral biometrics technology to study keyboard and mouse behavior on websites for fraudulent behaviors. Argus looks forward to a future of Internet-connected vehicles, but has you covered, ensuring our cars aren’t hijacked by malevolent saboteurs.

“Israel has a great deal to offer in cyber security,” remarked Francis Maude, the UK Minister for the Cabinet Office who is in charge of his country’s cyber defense strategy, to The Jewish Chronicle. “We’ve got a lot to learn from the country.” Meanwhile, the UK and Israel arranged plans to set up a joint academic research fund for cyber security research within the next three years.

The Cyber Security Nation

With a history in manufacturing global cyber products, military training specializing in security against online terrorism, research grappling with new algorithms and understanding the nature of cyber attacks, and the government backing up the country’s presence in the cyber security industry, Israel is positioned to become the leading source for advanced solutions against the shared threat of cyber warfare.

Such a position, however, also poses some problems, namely the issue of trust. The NSA itself protects its own government and military intelligence computer networks with Israeli cyber security, but this raises some eyebrows with some Americans wondering why whether outsourcing cyber security poses a potential threat to national security.

Israel’s dominance in cyber security is fitting, but as the saying goes: with great power comes great responsibility. Israeli government bodies and companies offering their products to international customers may find it difficult to remain neutral in the process. However, if there are two things that Israelis are pros at its technology and security, which may warrant a new title — “The Cyber Security Nation.”