Factory and Lab Israel's War Business

Israel invests more money in research than most other countries -- and in no other place are research institutes, the defense industry, the army and politics as interwoven. The result is a high-tech weapons factory that successfully exports its goods globally.
Casual attitudes towards weapons: An Israeli soldier kisses his Merkava tank along the border between Israel and the Gaza Strip.

Casual attitudes towards weapons: An Israeli soldier kisses his Merkava tank along the border between Israel and the Gaza Strip.


There's not much left of the high-tech car. In a warehouse about the size of an aircraft hangar, its remains look tiny. There are no wheels, no chassis, just the angular body of the car. And it's not in good shape at all. There's a gaping hole in its side with edges of lacerated metal. "Rocket-propelled grenade," says Yoav Hirsh, smiling. Had a person been inside, he or she would likely not have survived the blast. But there was no one behind the wheel: The Guardium is a fully automated vehicle.

Pride radiates from Hirsh -- who has a mix of gray and white hair, an athletic frame and a determined look on his face -- when he talks about his cars. He's the CEO of G-Nius, one of first companies in the world able to produce an army of robot fighters. The Guardium has been used since 2007 in patrols along the border of the Gaza Strip. It can be guided by remote control or can steer itself through a pre-selected route as its cameras and sensors capture data about the surroundings.

"Guardium already has 60,000 hours of operations behind it," Hirsh says. "And it has saved many lives." He says the aim is to complete "missions without any risk to the soldiers." But in addition to saving lives, G-Nius vehicles can also destroy them, using remote-control weapons systems mounted on top of the unmanned vehicles. Hirsh notes that, although the weapons-equipped vehicles haven't yet been used, they are deployable. In another warehouse, a standard Ford F350 pick-up truck is parked, one equipped with its own weapons station. The cameras and sensors are real but the machine gun is a dummy. "We're a civilian firm, after all," Hirsh says.

G-Nius is a textbook example of the way technology is created in Israel. The company's headquarters are located in the High-Tech Park development in the city of Yokneam in northeastern Israel, surrounded by numerous other technology firms. It's a joint venture of the space and electronics firm Elbit Systems and the state-owed aviation and defense company Israel Aerospace Industries (IAI). It also has excellent ties with the military.

'Combat Proven'

Israel has been in a perpetual state of conflict with its neighbors since the country's founding. It feels threatened from all sides; it is small and doesn't possess a massive army. "Innovative military technologies, rather than a massive army, have been viewed as strategically crucial for Israel given its relatively small size," says Dan Peled, a business professor at the University of Haifa. Over the decades, this has led to a close interlinking of the army with the civilian science, industrial and political sectors. And to a lucrative business with war -- the most recent of which claimed the lives of over 2,100 Palestinians and 70 Israelis before what is hoped to be a lasting cease-fire went into effect on Tuesday.

British military trade publication Jane's ranks Israel as the world's sixth largest exporter of weapons. In 2012, it exported $2.4 billion in military equipment. But with a per capita value of around $300 in exports for each resident, Israel is at the top of the list. Even the United States, by far the world's largest arms exporter, only has per capita weapons sales of $90. Israel's exports are growing rapidly, too. Data from the Stockholm peace research institute SIPRI shows that Israeli weapons exports more than doubled between 2001 and 2012.

The decades-long conflict between Israel and its neighbors has certainly contributed to the defense sector's success, a fact that people in the industry and the military are surprisingly open about. "'Proven combat performance' is still one of Israel's strongest military technology sales promotions," says business professor Peled. The label "combat proven" translates directly into healthy global sales of firearms, drones and rockets "Made in Israel."

Gil Wainman doesn't have to look far for a weapon. The marketing director for Israel Weapon Industries, Wainman is standing in the company's conference room, but it looks more like an arms depot. The conference table and video screen are flanked by shelves filled with pistols, assault rifles, machine guns and grenade launchers. "I'd be happy to," is Wainmann's surprising response when asked if he would be willing to pose for a photo holding a rifle.

IWI supplies the Israeli army with Uzi machine guns, Tavor assault rifles and Negev machine guns. Its portfolio also includes the Desert Eagle pistol, which is so big that it is more often seen in action films than it is in the hands of military or security personnel.

IWI has had enormous success with its products. When the company was privatized in 2005, it had 70 employees. "Now we are more than 500," says Wainman. "We are growing exponentially." Today, he says, every square foot of the company's office in Ramat Hasharon north of Tel Aviv is full. Wainman declines to say how many assault rifles, pistols, machine guns and mortars IWI sells. "We are talking about tens of thousands every year," he says with a smile. Indeed, IWI is among the world's top five firearms manufacturers.

The Israeli army is one of its biggest customers. When a new weapon is developed, Wainman explains, it is given to the military just as soon as the internal testing phase is complete so that it can be tried out on the battlefield. Soldiers then report back to IWI's technicians in order to help them improve the weapons. "We have vast experience," says Wainman. "Real combat experience. And we are using it in our development effort."

His pride in the company's achievements becomes palpable during a tour of IWI's assembly plant. "I love the smell of oil and the sound of the machinery," he says. At first sight, the plant resembles a car parts manufacturer. There are lathes and CNC cutting tables, bulletin boards covered in design drawings and large cases filled with metal parts.

Shiny steel rods are lined up in rows at the center of the plant. Later, they will be bored through and rifled so that their projectiles spin, allowing them to fly straighter as they speed towards their target. In the vast majority of cases, that target is a human being, whose bones and organs are shattered by the bullet.

When asked if that knowledge has any influence on daily work at the plant, Wainman understands it to be a purely technical question. "Our workers are screened by the authorities," he says. "Besides, for our workers, working with IWI is first of all a passion, and secondly work."

90 Percent of IWI's Firearms Are Exported

Such casual attitudes towards everything related to the military are in no way seen as being problematic in Israel. Some have been critical of the tight ties between military and industry, like Israeli journalist and film maker Yotam Feldman. His film "The Lab"  generated some controversy last year with its provocative theories that Gaza and the West Bank serve as Israel's weapons laboratory, that the Palestinians are guinea pigs and that war has mutated from a burden into a highly profitable business.

Still, the vast majority of Israelis view the development of new weapons as a simple necessity in order to ensure their safety and their country's very existence. Defense industry officials even go so far as to present their superior technologies as promoting peace. They argue that precise weaponry can prevent collateral damage, that the Iron Dome rocket defense system makes milder responses to missile attacks from the Gaza Strip possible. Viewed in the context of the current conflict, though, the term "mild" seems highly inappropriate. The majority of the over 2,100 Palestinians who have perished in Israeli attacks since the beginning of July have been civilians . The United Nations has spoken of war crimes and even the US has distanced itself from Israel.

"We send our sons and daughters to the Israeli Defense Forces," says IWI spokesman Wainmann. "We want to make sure they get the best of the best." However, it's not just Israel's sons and daughters who are getting the best of the best. Exports have grown to the point that supplying Israel's army only makes up a small part of the country's defense industry. Wainman says that IWI exports about 90 percent of the products it produces. The situation is similar for other Israeli defense companies, with an export ratio of 75 percent or more being standard.

In addition to firearms, complex weapons systems like drones are also being exported. Although the US may have the reputation of being the world leader in these flying reconnaissance and killing machines, Jane's reported that Israel sold more unmanned flying systems than the US in 2013. It is estimated that it will export twice as many as the US in 2014.

The assembly shop at defense concern IAI looks a little bit like the building site for oversized model airplanes. Harop drones can be seen all over the place at different levels of completion. Some are opened and only have some of their electronic components installed while others are ready for shipment in their launch cannisters. In a side room, the still empty airframes of Harop drones hang like bats from the ceiling.

The remote controlled Harop can carry 23 kilograms (50 pounds) of explosives in its tip. Once the pilot has identified a target, the drone dives toward it at a speed of up to "400 kilometers per hour," says an IAI employee. The Israeli army has deployed the Harop for years now, India is considering buying some and Germany's military also expressed temporary interest -- to the extent that the Bundeswehr even had the German defense firm Rheinmetall conduct tests in 2011. In February 2013, however, the German Defense Ministry cancelled its plans. Officials at IAI do not comment on other potential purchasers of the Harop.

The majority of Israeli drone exports go to Asia, with India viewed as the largest growth market for Israel's defense goods. The Israeli defense sector also would also like to increase sales to China, but the US government has often stood in the way of deals that include technologies that could potentially be used for military purposes. Sweden's SIPRI says that Israeli defense firms are active in the African market.

It may soon get some large orders from Germany, too. IAI's Heron, alongside the American Reaper, is considered to be a top candidate in the German military's future plan to purchase combat drones. The company is also seeking to sell Bombardier Global 5000 reconnaissance jets that have been equipped with IAI sensors to Germany as a replacement for the failed Euro Hawk reconnaissance drone program.

There are reasons behind Israel's advances and the quality of the military technology it manufactures. "Surprisingly, given its modest resources, Israel's defense R&D community succeeds in developing state-of-the-art weapon systems, often the first of their kind in the world," a study conducted by the University of South Wales  in Australia concluded. Israel doesn't shy away from investing in risky research projects and, by doing so, develops "radically innovative defense capabilities," it added.

The enormous role played by the military in society also plays a role. "The links between scientists, engineers and technology developers and the security situation in Israel is even more intertwined," says business professor Peled. And even those who haven't been a part of the system themselves by serving in the army or the reserves are still familiar with it through close friends and family members. "This almost first-hand familiarity between what the defense needs are and what science and technology can deliver are unparalleled in other countries."

And Isreal has a lot to offer when it comes to research and technology. Israel has topped the list of the world's most innovative countries  in the World Competitiveness Yearbook produced by Swiss business school International Institute for Management Development (IMD) for years now. The country invests 4.4 percent of its gross domestic product in research and development, the highest percentage anywhere in the world. IMD also ranks Israel in first place in terms of total expenditures on education, scientific research, the development and application of technology, cyber security and information technology skills.

At the same time, the country is also in first place in a less praiseworthy ranking: the Bonn International Center for Conversion's (BICC) Global Militarization Index. That ranking is also reflected in Israel's research priorities. Michael Brzoska, director of the Institute for Peace Research and Security Policy at the University of Hamburg estimated in a paper written in 2007  that 30 percent of all research and development in Israel has a military focus. By comparison, only 2 percent of German R&D is of a military nature.

'We Know How to Talk Military'

Avner Benzaken: "We know the military's needs."

Avner Benzaken: "We know the military's needs."

Foto: Markus Becker

Few have better knowledge of how the cooperation works in practice between Israeli research institutions, industry and the military than Avner Benzaken, head of the Technology and Logisitcs Branch of the IDF. He has a small Zen sandbox, with snow-white sand, small stones and a miniature wooden rake, on top of his desk at a barracks near Tel Aviv. There's a sign in front of it that reads, "We can't solve problems by using the same kind of thinking we used when we created them." The quote apparently comes from Albert Einstein, but it's also the kind of thing a Mideast peace activist might come up with.

Benzaken reaches for a small wooden pyramid made of pieces that have been pushed into one another and takes it apart. "Try to put it together again," he asks his visitor with a gentle smile. The pyramid is one of those puzzles that can drive a person mad. You know that there's a simple way to solve it, but you get so caught up in conventional thinking that you cannot find it. It's a wooden toy that feels like the epitome of the Mideast conflict.

But considering solutions for the unrelenting military conflict isn't the kind of thing Benzaken has to think about at work. Among his responsibilities are making combat troops more effective and, in Israel, he is provided with unique conditions for doing so.

"If I develop a product and want to test it in the field, I only have to go five or 10 kilometers from my base and I can look and see what is happening with the equipment," Benzaken says. "I get feedback, so it makes the development process faster and much more efficient." His unit is comprised largely of academics who also happen to be officers. "We know how to talk military, we know the needs. And we know how to translate these needs into technology."

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