The war in Gaza has paradoxically boosted Israel’s defense industry, acting as a powerful marketing tool for its military technology.

By Hezy Laing

Despite predictions of an economic slowdown, Israel’s defense industry has surged to unprecedented heights over the past year, cementing its status as a global powerhouse in military technology and innovation.

In 2024, the country’s defense exports reached a record-breaking $14.8 billion, marking the fourth consecutive year of growth and a 32% increase from the previous year.

This boom is largely attributed to escalating global conflicts, which have intensified demand for Israel’s combat-proven systems.

Among Israel’s most sought-after technologies are the Iron Dome missile defense system, the Arrow anti-ballistic missile platform, and the Spike family of precision-guided missiles.

These systems have demonstrated exceptional battlefield performance, earning Israel a reputation for reliability and innovation.

The war in Gaza has paradoxically boosted Israel’s defense industry, turning battlefield adversity into a powerful marketing tool for its military technology.

This spike was driven by global demand for combat-proven systems, which gained credibility through real-time deployment in Gaza.

Israeli companies like Smartshooter, Elbit Systems, and Rafael showcased their technologies in active combat, providing compelling evidence of their effectiveness.

For example, Smartshooter’s SMASH 3000 fire control system was used by IDF special forces in close-quarter combat, and the company leveraged this exposure to attract international buyers.

“The battlefield is the ultimate showroom,” said Michal Mor, CEO of Smartshooter, in a 2024 interview with Ynet.

The war also accelerated innovation.

Systems like loitering munitions, AI-driven surveillance, and electronic warfare platforms were refined and tested under live conditions.

This not only validated their performance but also shortened development cycles, allowing companies to bring products to market faster.

European and Asian countries, facing rising security threats, turned to Israel for reliable solutions.

Over 50% of Israel’s defense exports in 2024 went to European buyers, many of whom cited the systems’ proven track record in Gaza as a key factor in procurement decisions.

Domestically, the Israeli Ministry of Defense has committed approximately $13.8 billion for procurement in 2025, with a significant portion earmarked for local suppliers.

This investment not only strengthens national security but also fuels economic growth and technological advancement.

The defense sector now accounts for a substantial share of Israel’s industrial output and exports, employing tens of thousands across companies like Elbit Systems, Rafael Advanced Defense Systems, and Israel Aerospace Industries.

Missile, rocket, and air defense systems comprised 48% of total exports in 2024, while unmanned aerial vehicles (UAVs), loitering munitions, and cybersecurity solutions continued to expand their global footprint.

Israel’s ability to adapt rapidly to evolving threats and integrate cutting-edge tech has made its defense industry a cornerstone of both its economy and strategic influence.

As geopolitical tensions persist, Israel’s defense sector is poised to remain a dominant force in the global arms market.