Press release
The Israeli Defense Industry Market Opportunities and Entry Strategies, Analyses and Forecasts to 2017
The Israeli Defense Industry
London, August, 2012 – In 2012, the Israeli defense market valued US$13.28 billion and had the third largest military expenditure in the Middle East. During the review period, Israeli defense expenditure has recorded a CAGR of -0.59% and is expected to grow at a CAGR of 2.97% over the forecast period, reflecting the threats from Iran, Syria, and other neighboring Arab countries. Moreover, Israel spent an average of 6% of its GDP on defense between 2008 and 2012 (reference see graph below).
As 75% of the US$30 billion of military aid Israel is scheduled to receive from the US between 2010 and 2019 must be spent on the procurement of military hardware from the US, the Israeli defense market is less accessible to defense suppliers from other nations. As a consequence of Israel’s increasing dependence on US military aid for its defense purchases, this is likely to continue for the foreseeable future. Furthermore, Israel’s economic and political dependence on the US means that the US has influence on Israel’s military transactions with countries such as China and India.
The Israeli defense industry is becoming increasingly reliant on defense exports as a source of revenue, which has led to increased competition between domestic firms. Moreover, internal competition is also on the rise because a large number of domestic firms are involved in the manufacture of similar equipment categories. Although the Israeli government has tried to form bidder teams, which form agreements not to compete with each other, or to compete in a manner that benefits all parties, many companies are unwilling to work together. For example, the recent attempt by Israeli training and simulation firm BVR Systems to cooperate with Israel Aerospace Industries (IAI) failed because the companies could not agree on cost sharing, development approaches and marketing initiatives, resulting in a costly litigation for BVR Systems.
About Strategic Defence Intelligence
This report is one of a series available to subscribers of our premium research platform, Strategic Defence Intelligence. Strategic Defence Intelligence provides a stream of continuously updated customer and competitor intelligence, as well as detailed research reports providing an unrivalled source of global information on the latest developments in the defence industry.
Strategic Defence Intelligence's unique monitoring platform tracks global defence activity for over 2,500 companies and 65 product categories in real time and in a highly structured manner, giving a comprehensive and easily-searchable picture of all defence industry activity. The site features: daily updated analysis, comment and news, company and customer profiles, defence spending, tenders and contracts, product and technology intelligence, a research and analysis database providing access to industry and competitor reports to enable business and market planning, and fully customizable tools, including instant personalized report generation and custom alerts.
About GlobalDefence.net
For more than a decade GlobalDefence.net provides information from the field of foreign and security policy. It all started in the year 2001. After 911 the founder and current editor in chief Holger Paletschek started to create a German-speaking website with an overview about the armed forces of the world.
Today GlobalDefence.net stands for current news, background articles, geopolitical analyses, network of experts, industry leaders, political decision makers, as well as information about the armed forces of the world provided in German and English.
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