Israel – Technology Performance Digest

Executive Summary

This report provides an in-depth assessment of Israel’s current performance and future trajectory in key dual-use technologies, focusing on the activities and impact of leading organisations: AnyVision, Armis, Corsight AI, Cyclops Security, Entro Security, Pentera, ProteanTecs, Sensorz, Sensos, and Wiz. The technologies under review—spanning ai-powered-cybersecurity, cybersecurity, cybersecurity-solutions, facial-recognition, internet-of-things, predictive-maintenance, sensor-networks, and smart-sensors—are at the intersection of commercial and defence innovation, with significant implications for national security, economic competitiveness, and international partnerships, particularly with the United-States.

Israel has established itself as a global hub for cybersecurity and advanced sensing technologies, leveraging its robust innovation ecosystem, strong government support, and unique security requirements. The country’s dual-use technology sector is characterized by rapid commercialization, agile startups, and a close relationship between defence needs and civilian applications. However, Israel faces challenges relating to talent retention, regulatory pressures, and increasing global competition, particularly from the United-States and emerging Asian players.

The following sections provide a detailed analysis of Israel’s strengths, weaknesses, notable programmes, competitive positioning, export opportunities, risk environment, and a five-year outlook.

Strengths

Innovation Ecosystem and Talent

Israel’s reputation as the “Startup Nation” is well-earned, with over 500 cybersecurity startups and a vibrant ecosystem supporting dual-use technology development. The country’s elite military intelligence units (notably Unit 8200) serve as incubators for technical talent, fostering a culture of rapid innovation and practical problem-solving. This talent pipeline feeds directly into companies like Wiz, Pentera, and Armis, which are recognized for their cutting-edge cybersecurity and ai-powered-cybersecurity solutions.

Government Support and Strategic Alignment

Israeli government agencies, particularly the Ministry of Defence and the National Cyber Directorate, play an active role in nurturing dual-use technologies. There is significant public investment in R&D, and regulatory frameworks are designed to encourage innovation while maintaining security oversight. The government’s willingness to serve as an early adopter and reference customer is a critical enabler for companies such as AnyVision and Corsight AI, especially in sensitive areas like facial-recognition.

Dual-Use Technology Commercialization

Israeli companies excel at translating defence technologies into commercial products and vice versa. For example, ProteanTecs and Sensos have leveraged expertise in smart-sensors and sensor-networks for both industrial and military applications, including predictive-maintenance and asset tracking. This dual-use approach accelerates time-to-market and enhances commercial viability.

International Partnerships

Israel maintains robust collaborative ties with the United-States, both at the governmental and corporate levels. Many Israeli companies have established U.S. headquarters or significant operations, facilitating access to global markets and capital. This is evident in the rapid international expansion of Wiz, Armis, and AnyVision.

Weaknesses

Talent Retention and Workforce Constraints

While Israel produces world-class technical talent, it faces increasing challenges in retaining skilled professionals. High demand from global tech giants, coupled with aggressive recruitment by foreign governments and companies, has led to wage inflation and occasional “brain drain.” Startups and SMEs, which form the backbone of Israel’s innovation ecosystem, are particularly vulnerable to talent poaching.

Regulatory and Ethical Pressures

Israeli companies working in facial-recognition and ai-powered-cybersecurity face growing scrutiny from international regulators and civil society groups. Export controls, particularly to sensitive regions, have tightened, and there is increasing pressure to ensure compliance with evolving privacy standards, such as the EU’s GDPR and similar U.S. state laws. This has impacted the global expansion strategies of firms like AnyVision and Corsight AI.

Market Fragmentation and Scale

Despite a strong startup culture, relatively few Israeli dual-use technology firms have scaled to global market leadership. The sector is highly fragmented, with many small companies competing in overlapping niches. This can lead to inefficiencies and challenges in sustaining long-term R&D investments, particularly in areas like sensor-networks and predictive-maintenance.

Dependence on the United States

Israel’s close alignment with the United-States is both a strength and a vulnerability. While U.S. partnerships provide access to capital and markets, they also expose Israeli firms to geopolitical risks, regulatory dependencies, and potential technology transfer restrictions.

Notable Programmes & Investments

Cybersecurity and AI-Powered Solutions

• Wiz: Now one of the world’s fastest-growing cloud cybersecurity companies, Wiz has raised over $1.5 billion since its founding, with a valuation exceeding $12 billion as of mid-2025. Its cloud-native security platform is widely adopted by Fortune 500 companies and government agencies in both the U.S. and Europe.
• Armis: Specializing in asset visibility and security for enterprise and industrial environments, Armis has pioneered solutions at the intersection of internet-of-things and cybersecurity-solutions. Its platform is deployed across critical infrastructure, healthcare, and defence sectors globally.
• Pentera: Known for its automated security validation platform, Pentera enables continuous penetration testing and vulnerability assessment, supporting both civilian and military customers.

Facial Recognition and Advanced Sensing

• AnyVision and Corsight AI: Both companies are global leaders in facial-recognition technologies. AnyVision has focused on responsible AI and privacy-preserving features, while Corsight AI emphasizes real-time, high-accuracy identification in challenging environments. Both have secured major contracts with law enforcement and border security agencies worldwide.
• Sensorz and Sensos: These firms are at the forefront of smart-sensors and sensor-networks, developing miniaturized, energy-efficient devices for asset tracking, perimeter security, and industrial monitoring. Their technologies are increasingly adopted in logistics, defence, and critical infrastructure.

Predictive Maintenance and Industrial IoT

• ProteanTecs: Leveraging deep data analytics and on-chip monitoring, ProteanTecs delivers advanced predictive-maintenance solutions for electronics, aerospace, and defence platforms. Its technology enables real-time health monitoring and failure prediction, reducing downtime and maintenance costs.

Emerging Cybersecurity Startups

• Cyclops Security and Entro Security: Both are rapidly scaling startups focused on next-generation cybersecurity and cybersecurity-solutions. Cyclops Security specializes in AI-driven threat detection, while Entro Security addresses secure access and data protection in distributed environments.

Competitive Comparison

Israel vs. United States

The United-States remains the global leader in dual-use technology development, with unmatched scale, investment, and market access. However, Israel consistently outperforms on agility, speed of innovation, and the ability to rapidly prototype and deploy solutions. Israeli firms are often first to market with novel approaches in ai-powered-cybersecurity, facial-recognition, and smart-sensors, but U.S. companies typically have greater resources for global scaling.

Israel’s competitive edge is most pronounced in:

• AI-Driven Cybersecurity: Companies like Wiz, Armis, and Pentera are recognized as global innovators, often setting industry benchmarks adopted by larger U.S. competitors.
• Facial Recognition: AnyVision and Corsight AI are acknowledged as technical leaders, although U.S. firms benefit from larger domestic markets and fewer export restrictions.
• Sensor Networks and IoT: Israeli startups in sensor-networks and internet-of-things are highly competitive, but face increasing pressure from U.S. and Chinese firms with greater manufacturing capacity.

Regional and Global Competition

• Europe: European firms are strong in privacy-centric solutions and regulatory compliance, but generally lag in speed and agility compared to Israeli companies.
• Asia (China, South Korea, Singapore): Asian competitors are rapidly advancing in facial-recognition, smart-sensors, and internet-of-things, often supported by state-driven industrial policies. Israel maintains a technical edge but faces increasing competition in cost-sensitive markets.

Opportunities for Collaboration / Export

United States and NATO Allies

Israel’s deep integration with the United-States defence and technology sectors presents ongoing opportunities for joint R&D, co-development, and export. U.S. defence primes and technology companies frequently partner with Israeli startups to accelerate innovation in cybersecurity, ai-powered-cybersecurity, and predictive-maintenance.

Asia-Pacific and Emerging Markets

There is growing demand for Israeli cybersecurity-solutions, facial-recognition, and smart-sensors in Asia-Pacific, Latin America, and Africa. Export opportunities are strongest in sectors such as critical infrastructure, transportation, and law enforcement, where Israeli technologies offer proven reliability and rapid deployment.

Multinational Programmes

Israeli companies are increasingly participating in multinational research consortia and EU-funded projects, particularly in areas related to internet-of-things, sensor-networks, and privacy-preserving AI. These collaborations provide access to new markets and help mitigate regulatory barriers.

Civil-Defence Integration

The dual-use nature of Israeli technologies enables seamless transition between civilian and military applications. Companies like ProteanTecs and Sensos are well-positioned to supply both commercial and defence customers, supporting resilience and supply chain security.

Risks & Mitigation

Geopolitical and Regulatory Risks

• Export Controls: Tightening export controls, particularly from the U.S. and EU, could restrict Israeli firms’ access to key markets for sensitive technologies like facial-recognition and ai-powered-cybersecurity.
• Geopolitical Tensions: Regional instability and shifting alliances may impact Israel’s ability to maintain open technology flows, especially with the United-States and European partners.

Mitigation: Diversify export markets, invest in compliance infrastructure, and strengthen engagement with regulatory bodies to anticipate and adapt to changing requirements.

Talent and Workforce

• Brain Drain: Continued outflow of technical talent to foreign employers could undermine Israel’s innovation capacity.
• Wage Inflation: High demand for skilled professionals is driving up costs, challenging the sustainability of early-stage startups.

Mitigation: Expand STEM education, incentivize local employment, and encourage repatriation of experienced professionals.

Technology Transfer and IP Risks

• Espionage and IP Theft: Israeli firms are frequent targets of cyber-espionage and intellectual property theft, particularly from state-sponsored actors.
• Supply Chain Vulnerabilities: Dependence on foreign manufacturing and components introduces risks of disruption and compromise.

Mitigation: Strengthen cyber-defence measures, localize critical manufacturing, and implement robust IP protection strategies.

Ethical and Reputational Risks

• Privacy Concerns: Use of facial-recognition and pervasive sensing technologies raises ethical concerns and potential backlash from civil society and international partners.
• Reputational Damage: Allegations of misuse or export to authoritarian regimes can damage brand value and restrict market access.

Mitigation: Adopt transparent governance, invest in privacy-preserving technologies, and adhere to international ethical standards.

Outlook (5-year)

Growth Trajectory

Israel’s dual-use technology sector is expected to maintain robust growth through 2030, driven by sustained demand for advanced cybersecurity, ai-powered-cybersecurity, and sensing solutions across both defence and civilian markets. The sector will benefit from continued government support, a strong innovation culture, and expanding international partnerships.

Technology Trends

• AI and Automation: Israeli firms will lead in the integration of AI and machine learning into cybersecurity-solutions, enabling proactive threat detection and autonomous response.
• Edge Computing and IoT: Advances in smart-sensors and sensor-networks will enable real-time data processing at the edge, supporting applications in critical infrastructure, defence, and smart cities.
• Privacy-Preserving Technologies: There will be increased focus on privacy-enhancing features, particularly in facial-recognition and data analytics, to address regulatory and ethical concerns.

Market Dynamics

• Consolidation: The sector will likely see increased consolidation, with larger firms acquiring innovative startups to expand capabilities and global reach.
• Export Diversification: Israeli companies will pursue new markets beyond the United-States and Europe, focusing on Asia-Pacific, Latin America, and Africa.
• Resilience and Supply Chain Security: There will be greater emphasis on securing supply chains and localizing critical manufacturing to mitigate geopolitical and operational risks.

Challenges

• Regulatory Headwinds: Compliance with evolving international regulations will require ongoing investment and adaptation.
• Talent Competition: Sustaining the talent pipeline will be critical to maintaining Israel’s competitive edge.
• Emerging Competitors: Rising investment in dual-use technologies by China, South Korea, and other Asian economies will intensify global competition.

Conclusion

Israel remains a global leader in dual-use technologies, particularly in cybersecurity, ai-powered-cybersecurity, and advanced sensing. The country’s innovation ecosystem, government support, and international partnerships—especially with the United-States—provide a strong foundation for continued growth. However, to sustain its leadership, Israel must address challenges related to talent retention, regulatory compliance, and global competition. Strategic investments in privacy, supply chain security, and export diversification will be key to maintaining Israel’s position at the forefront of dual-use technology innovation over the next five years.