© Israel Aerospace Industries
IAI specialises in intelligence, surveillance and reconnaissnace UAVs like the Heron (above)

Globalisation came to Israel's aerospace and defence industry early. Lacking a domestic market large enough to support several major players, Israeli companies turned to the export market, achieving remarkable success in competition with the best technology offered by Western, Russian and - more recently - Chinese firms. In the process, Israeli industry largely avoided the consolidation frenzy that swept the USA and Europe after the early 1990s. Four major firms today dominate Israel's industrial landscape, yet remain minuscule compared with their foreign rivals. Time may be running out on the status quo. Competitive pressures abroad will grow as militaries cut spending and a consolidation paradox looms. To continue to grow, Israel's industrial footprint must begin shrinking.



Source: Flight International