Espionage, Theft, Virtual War: Good News for Israel’s Cyber Industry

Israel has emerged as a center for defending people, organizations and even countries against cyber attacks. The question is how to maintain the edge.

Cyber attack (illustrative).
Dreamstime

Prime Minister Benjamin Netanyahu’s preoccupation with all things cyber is raising suspicions that a panic is being stoked by people with business or political interests. But experts say the cyber threat is real and growing.

Few know the field better than Isaac Ben-Israel, a founder of the National Cyber Bureau, the head of Tel Aviv University’s Cyber Research Center, a professor of physics and mathematics, and a major general in the reserves.

Ben-Israel is also chairman of the fourth annual International Cybersecurity Conference taking place Sunday and Monday at the university.

“When we say cyber we’re referring to everything that can harm computers or communication among computers. It begins with a break-in into a personal computer to steal information, continues with a break-in into bank computers to steal money, and ends with an entry into a computer system for espionage,” Ben-Israel says.

“There’s an entire spectrum of such activities, all of which are called cyber. There are also computers whose existence you aren’t really aware of, such as the air conditioner in your car or the computer that drives the train. Via a cyber attack you can cause a collision between trains or a car accident, or hit a passenger plane.”

But that hasn’t happened.

“Of course it’s happened. There were two incidents in Brazil, in Rio de Janeiro, and twice the city’s electricity grid was knocked out. In 2012 there was an attack on the oil wells of Aramco, a Saudi oil company that operates in the Persian Gulf, an attack apparently originating in Iran. And here in Israel, during the fighting in Operation Protective Edge, there were 2 million cyber attacks daily, which had very little success.”

But those were considered attacks by amateurs. Most were the most primitive type of attack, denial-of-service attacks by repeated calls to a server.

Israel has been prepared for such attacks since 2002, Ben-Israel notes. But Estonia was paralyzed in 2007 by such an attack, attributed to the Russians, because it lacked defenses.

The country was paralyzed as if it were at war, even though for three weeks not a single bullet was fired. In 2008 there was a real war between Russia and Georgia,  but the Russians similarly paralyzed Georgia with a cyber attack.

“Israel is simply prepared and is among the top three countries when it comes to cyber protection, along with Finland and Sweden,” Ben-Israel says.

Could you give some examples?

“I was abroad during Operation Protective Edge when my phone received a push notification from Haaretz. It looked like a regular notification with the Haaretz logo; it said the Haifa refineries had been damaged by a missile and were on fire. It took me time to make a phone call and realize that it wasn’t true.

“In another incident there was a report that [Syrian President Bashar] Assad had hit Haifa’s drinking water inspection system. It turned out it wasn’t Haifa but a kibbutz in the region, and that only the irrigation system had been hit. Nothing happened, but that break-in shows what kind of damage can be done.”

The offense has it easier

Cyber is considered another battlefront between countries; only later it’s considered a threat to companies and private users. Either way, Israeli defense firms have adopted quickly. Esti Peshin, director of Cyber Programs at Israel Aerospace Industries, starts with Operation Protective Edge to explain how the cyber threat isn’t scaremongering by politicians.

“For example, take the disinformation on the social networks and WhatsApp during the fighting,” she says. “What’s the source of these reports? Maybe they come from vested interests or even from the enemy? At companies and businesses it’s not very difficult to enter systems and steal sensitive and classified information.”

According to Peshin, “It’s hard to attribute cyber attacks. It’s easy for the attacker to hide and remain anonymous, and because we don’t know who launched the attack and it’s hard to retaliate, there’s a problem of deterrence. That’s why we’re based mainly on defense.

“But as a colleague of mine said, cyber is like a balloon. To cause damage all you need is a pin, but to protect yourself you have to protect the entire interior. It’s much harder for the defense than for the offense.”

Elbit Systems, Rafael Advanced Defense Systems and IAI invested heavily last year to establish cyber operations, which are likely to open doors to Israeli startups, Peshin notes.

“Israel has hundreds of cyber startups. Sometimes it’s three kids in a garage trying to find the best solution to the problem, and sometimes they even succeed. The problem for many is that they fail in the encounter with the market, because you have to convince the customer to use a product that affects the core of his information security. The process can take years,” she says.

“Startups have no time for that. Companies like ours consider themselves the responsible adult and develop their own cyber capabilities, but they also bring together local startups and customers for a specific solution. Currently we’re helping about 10 startups.”

Lots of international R&D in Israel

Thus the increase in cyber threats and attacks, like the increase in public awareness, is actually the best news in recent years for the Israeli high-tech industry.

“Our support for cyber is nothing new. It happens because of security needs and the real threats to Israel, along with the relevant manpower here in Israel,” says Avi Hasson, the head of the Chief Scientist's Office.

“The best example is Check Point – guys who grew up in [army intelligence] Unit 8200 and converted a solution from the military to the civilian world. Our classic advantages in high-tech are also reflected in cyber – the ability to do a lot with a little. Israeli security products are always compact and efficient.”

Hasson estimates there are about 250 companies in the cyber field in Israel, ranging from very small startups to huge companies such as Check Point and Elbit Systems, as well as 15 cyber research-and-development centers of multinational corporations such as IBM, Lockheed Martin, Microsoft, General Motors and Qualcomm.

“There’s a reason a company like GM develops connected-car capabilities with cyber protection here of all places,” Hasson says. In terms of cyber workers, there are about 7,000 to 8,000 such engineers in Israel. Of private fund-raising for cyber firms worldwide in 2013, 7% was for Israeli companies, he adds.

The growth is also evident in the chief scientist’s figures on government support. In 2012, grants totaled 14.9 million shekels ($4.1 million) for three projects; in 2013 they totaled 48.1 million shekels for 26 projects. So far for 2014 it’s 39.8 million shekels for 23 projects. Israeli cyber exports totaled $2.5 billion last year.

Whatever the numbers, the experts agree that Israel’s relative advantage in the cyber sector must be maintained. Hasson talks about the delicate relations with the defense establishment. “There’s an interesting dialogue between us and the Defense Ministry about how to relate to cyber – whether or not it’s weaponry,” he says.

“They of course prefer that precious knowledge not leave Israel, and we claim that cyber doesn’t have to be under regulatory supervision at all. I claim that we shouldn’t be more pious than the pope because we’re taking part in international competition, and if we don’t sell products the Americans or somebody else will take the market from us.”

Hasson says greater information-sharing and openness are required from organizations to strengthen the economy’s cyber power. “What makes it difficult to deal with cyber threats is that organizations don’t like to talk about the damage caused to them,” he says.

“The more information-sharing there is, the more organizations can learn from the experience of others, and it will be easier to identify threats. I think that, subject to all the rules, we should forge cooperation among managers of information systems. That’s starting to take place, and the cyber bureau is leading it.”

Ben-Israel adds that Israel should begin thinking about the cyber warriors of the future.

“What’s the strength of the industry and its ability to continue developing things? Do we know how to build a supercomputer? Is there enough knowledge at the universities? Do we have enough children in the schools who’ll study mathematics and later be able to work in cyber?” he asks.

“All over the world they’re looking for ways to persuade children to study science. I, the chairman of the Israel Space Agency, suggested that at some point we should build a satellite in the shape of a robot-dinosaur and launch it to the moon. All the children in the world would know about it.”