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The Global Technology Sector, Startups, and Cybersecurity Ecosystem Respond to the War in Israel

Israel is a major player in the global technology sector – boasting the second largest cyber startup market in the world.  Here is how the conditions on the ground in Israel and Gaza is rippling into the technology startup and venture capital ecosystem globally.

Serving Startup Nation: How Israel’s Cyber Specialists Work Amid War

From The Record:   Here’s what you need to know –

  1. “The ongoing Israel-Gaza conflict could have significant impact on Israel’s cybersecurity industry, as many tech and cybersecurity professionals may be called to active military duty. Despite this, tech companies like Check Point ensure business continuity, thanks to their employees’ resilience and adaptability shaped by their military service.
  2. Prior to the conflict, Israel’s cybersecurity startup market experienced an 87% decrease in funding, sinking to $69 million this year from $514 million during the same quarter last year. The decrease is attributed to a worldwide drop in venture funding and increasing political tension.
  3. Cybersecurity companies are also dealing with increasing cyberattacks. In October, pro-Palestinian and pro-Russian hackers targeted Israeli websites 143 times. While these attacks have had a relatively minor impact so far, there is a risk they may escalate in severity over time.

The Israeli cyber startup market ranks as the world’s second-largest, attracting investment from abroad as well as support from its own government. Many Israeli tech and cyber executives were trained in Unit 8200, the renowned intelligence division of the Israel Defense Forces.

Now, as the Israeli military gets ready for a potential ground operation in Hamas-controlled Gaza, analysts are predicting a bumpy future for the country’s tech sector — partly because some of the country’s tech and cybersecurity experts may be called upon to join the fight.”

Israeli Startup Community, at Home and Abroad, Prepares to Fight

“Venture firms and startup leaders are trying to safeguard workers while managing their businesses as employees and executives join the war”

From the WSJ (subscription access required):

“Members of Israel’s technology sector are reeling from the war unfolding in their country, while trying to keep their businesses going as executives and employees join the fight.

The Israeli military has called up hundreds of thousands of reservists, including many who are employed by startups at home and abroad, as the nation responds to a sudden attack by Palestinian militants over the weekend. More than 900 Israelis have been confirmed dead, according to Israeli authorities. According to the Health Ministry in Gaza, 687 Palestinians have been killed as Israel strikes back.

Business has been interrupted and meetings canceled as organizations deal with the personal impact of the war.

Companies and investors with operations in Israel are assessing how to proceed as staff members, including executives, have been drafted or voluntarily enlist. Firms are checking on their staff’s safety, and attempting to provide support for those who are affected. Entrepreneurs are also coordinating volunteer efforts to support the war and those affected by it, as well as setting up contingencies for how their businesses will operate should they join the fight.

Some Israeli founders who are running startups in the U.S. are also heeding mobilization orders, or are preparing to be called up.”

Additional Resources:

On AI Enabled Weapons and the Just Preparation for WarBABL AI – an Iowa city, Iowa-based company that audits and certifies AI systems – partnered with the Stockdale Center for Ethical Leadership at the U.S. Naval Academy to co-publish Report on “AI Enabled Weapons and Just Preparation for War.”  An overview of the report including recommendations by the authors can be found here. 

Global Day of Jihad? Hamas Declares Friday, October 13th ‘Day Of General Mobilization’:  In what is being called a “Global Day of Jihad”, a former Hamas leader has called for all Muslims worldwide “to take to the streets and the city squares in Arab and Islamic cities, as well as in cities everywhere where there are [Islamic] communities. There is a call [for demonstrations] this Friday (October 13, 2023) – the Al-Aqsa Deluge Friday.”  A link to the video of the statement and details from various news outlets can be found at his link. 

The Network Swarm Attack on Israel and the Escalating Global Networked War:  Intelligence Failure? Black Swan? Gray Rhino? Systemic Failure? An entropic, sclerotic Israeli political system?  The geopolitical and regional power context for the recent surprise, large scale and violent Hamas attack of Israel may prove to be “all of the above”. What is clear is the attack was designed as a large scale, kinetic and digital “network swarm” – which now opens up a new, “formal” kinetic front in the ongoing, global networked war in the Middle East.  Swarm dynamics are a crucial mental model – which we apply here to the Hamas network swarm attack of Israel. 

How Does Hamas Use Cryptocurrency for Fundraising and Financial Activities?In our recent post on crypto fraud relative to fraud in the traditional fiat monetary systems, we encouraged our readers to think very critically about the perceptions of and narratives about the instrinsic value of cryptocurrency and the blockchain technologies on which they are based. In the shadow of the Hamas attack on Israel, TRM Labs has released a report on how Hamas uses crypto – which also moves the narrative away from the FTX collapse and the Sam Bankman-Fried trial as the central organizing principle in the perception of the future cryptocurrency.  

Russian Invasion of Ukraine: Russia’s aggression against Ukraine prompts global repercussions on supply chains and cybersecurity. This act highlights potential threats from nations like China and could shift defense postures, especially in countries like Japan. See: Russia Threat Brief

Networked Extremism: The digital era enables extremists worldwide to collaborate, share strategies, and self-radicalize. Meanwhile, advanced technologies empower criminals, making corruption and crime interwoven challenges for global societies. See: Converging Insurgency, Crime and Corruption

Food Security and Inflation: Food security is emerging as a major geopolitical concern, with droughts and geopolitical tensions exacerbating the issue. Inflation, directly linked to food security, is spurring political unrest in several countries. See: Food Security

Geopolitical-Cyber Risk Nexus: The interconnectivity brought by the Internet has made regional issues affect global cyberspace. Now, every significant event has cyber implications, making it imperative for leaders to recognize and act upon the symbiosis between geopolitical and cyber risks. See The Cyber Threat

Proactive Mitigation of Cyber Threats: The relentless nature of cyber adversaries, whether they are criminals or nation-states, necessitates proactive measures. It’s crucial to remember that cybersecurity isn’t solely the responsibility of the IT department or the CISO – it’s a collective effort that involves the entire leadership. Relying solely on governmental actions isn’t advised given its inconsistent approach towards aiding industries in risk reduction. See: Cyber Defenses

The Necessity of Continuous Vigilance in Cybersecurity: The consistent warnings from the FBI and CISA concerning cybersecurity signal potential large-scale threats. Cybersecurity demands 24/7 attention, even on holidays. Ensuring team endurance and preventing burnout by allocating rest periods are imperative. See: Continuous Vigilance

Daniel Pereira

About the Author

Daniel Pereira

Daniel Pereira is research director at OODA. He is a foresight strategist, creative technologist, and an information communication technology (ICT) and digital media researcher with 20+ years of experience directing public/private partnerships and strategic innovation initiatives.