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The southern Israeli city of Beer Sheva is used to protecting the frontier. During Roman times, it was a dusty outpost that formed part of the Limes Arabicus, a series of desert fortresses defending the empire from raiding tribes. Earlier, the Bible repeatedly cited Beer Sheva as the southern civilised limit of the Israelite kingdoms.
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Even today, tourists in Beer Sheva can visit the remains of the fortress that guarded the borders of biblical Israel. But today the frontier is the internet and Beer Sheva offers protection of the electronic sort. The city is rapidly becoming a global centre of cyber security technology.
Israel exports more cyber security-related products and services than all other countries in the world combined, excluding the US. Reports from 2015 show the tiny country making 10% of all global sales in cyber security products and attracting 20% of global investment in the sector.
Much of that investment is centred on the desert city of Beer Sheva, where Israel has constructed a hub for cyber security research and development. Those investments are bolstered by the city’s physical proximity to Israel’s military technological intelligence units and the burgeoning Ben Gurion University, a significant research institution.
At an early stage, Israel identified cyber security as an area of national importance. The small country’s technological skills and continuous concerns over security made cyber security a natural arena for national investment.
In 2010, Israel adopted its National Cyber Initiative, which established a National Cyber Bureau to advise the government on cyber security matters, encouraging co-operation between academia, industry and the defence community, and advancing Israel as a global centre of cyber technology.
Since then, the bureau has, in co-operation with other government agencies, allocated almost $100m to foster entrepreneurship and academic excellence in the field. The Israeli Office of the Chief Scientist, another government agency, has adopted a preferential policy for funding private initiatives in cyber security research and development.
In addition to the Beer Sheva centre, the bureau has also helped to establish a second academic cyber security centre at Tel-Aviv University. This latter centre has a broad interdisciplinary focus, which includes political science and legal issues.
Observers typically ascribe Israel’s cyber prowess to its human capital – a cadre of technologists trained by a military that needs to retain cyber primacy. For example, the Israeli cloud security firm Adallom, which was acquired by Microsoft in 2015, was founded by alumni of military cyber units.
This trend dates back to 1993, when a veteran of the same unit established Checkpoint, one of the first commercial purveyors of network security software.
But this perspective, with its focus on highly trained individuals, perhaps overlooks the value that broader institutional structures provide to Israel’s cyber security ecosystem.
Economists have studied the role of government institutions in encouraging cyber security investment, asking why state support should be necessary to bolster cyber ventures. Security is a market good, and vulnerable entities will spend good money to obtain security goods and services. If so, why should any government intervention – and Israel’s government has certainly intervened – be needed to bolster cyber security investment?
One answer is that good cyber security defence requires a wealth of information – about emerging threats, existing vulnerabilities and developing technologies. Private entities may not have the incentive or capability to share this information among themselves, and the government may have a role in providing sensitive information or encouraging information sharing.
This viewpoint can explain recent debates in the US concerning the sharing of cyber security information, debates that culminated in the passing of legislation that allowed companies to share threat information between themselves and with the government. The UK has also created frameworks for the public-private sharing of cyber security information, such as the Cybersecurity Information Sharing Partnership established in 2013.
Israel may not (yet) have express legislation that allows private entities to share cyber data, but it does have government or public institutions that facilitate informal access to such information. Most obviously, the Israeli military provides a hub where individuals share high-level threat and vulnerability information under the umbrella of the state.
In a country that has compulsory military service, and where discharged soldiers regularly come back to their units to train and serve in the reserves, it is possible to see how the military could function as an informal watering hole for the exchange of cyber security information. The establishment of the Beer Sheva and Tel-Aviv centres, and the creation of the National Cyber Bureau, add more points of contact where such information can be exchanged informally between individuals active in the industry.
In other words, Israel has constructed a set of institutions that allow for the informal flow of high-level cyber security information. Although such informal sharing cannot provide a basis for real-time response to cyber attacks, it perhaps provides a fertile bed for the development of long-term strategy and the growth of commercial ventures.
Long after its Roman garrisons had disappeared into the desert dust, Beer Sheva played a pivotal role in British military history. Towards the end of the Second World War, General Edmund Allenby and a company of parched light horsemen overpowered the Turkish battlements that were defending the city. Once again, Beer Sheva showed its critical role in defending the Holy Land – after the battle, Jerusalem and the rest of the country swiftly fell into British hands.
Today, the cyber hub of Beer Sheva is reprising its central role in military and civilian defence, but the battlefield now plays out in digital bits instead of the arid desert, and the weapons are innovation and information-sharing rather than trenches and bayonets. And Israel is hoping these digital swords can be beaten into instruments of commercial success.
Eli Greenbaum is a partner at law firm Yigal Arnon & Co. .......................................................