Since the 1990s, Israel’s industrial development has entered a new phase owing to active engagement in Information and Communications Technology- related ventures. In the first decade of the 21st century, Israel succeeded in presenting her image as a “startup” nation, attracting worldwide attention. Israel’s economy, which was highly industrialized, tried to adapt itself to economic and financial globalization. In 2010, Israel was accepted as a full member of the Organisation for Economic Co-operation and Development. The collapse of Lehman Brothers in September 2008 brought to the fore not only the instability of the global financial system as a whole but also the latent weak potential of economic growth, especially in developed countries that lacked innovative, leading industries. In this framework, microlevel initiatives in Israel carried out using active venture capital to explore new niches and new, innovative, high-tech fields attracted the attention of various countries. These fields include the wider areas of software development in ICT—such as big data analysis, cyber security, nanotechnology, artificial intelligence, and the Internet of Things—in addition to biotechnology and the pharmaceutical industry. It is important to note that Israeli industrial development has been influenced not only by economic necessity but also by national security needs. This latter priority guided the selection and concentration of resources within Israel’s limited national budget and investment capacity.

Academic research and development also contributed to improvement in the technological aspect of the military industry. Technological know-how spillover from the military industry contributed to some extent to an emerging, domestic, microlevel high-tech industry. The military operations engaged in by the Israel Defense Forces in conflict zones in the Middle East, including operations in occupied territories, provided an opportunity to enhance the quality and practicability of weapons produced. The increasing volume of military grants from the US also supported the military industry in overcoming difficult financial phases. Therefore, Israel’s model of a “start-up” nation is not applicable directly to other nations, as the model was not neutral, owing to the state’s guidance and intervention on security issues. Although the new neoliberal macroeconomic circumstance is favorable to the “start-up” of new ventures, the indirect support by the state through various policies also contributed to the building of a positive environment for them. New markets for Israeli weapons and high-tech gadgets such as drones are expanding rapidly, particularly in huge emerging markets such as India and China. Although the export potential of military equipment is immense, it obliges Israel to be involved in delicate and complex international political relations among the importing countries. This is a new challenge in this unstable and risky world, as high-tech and military equipment always bears political implications beyond economic interests.