Market Research Logo

Future of the Israeli Defense Industry - Market Attractiveness, Competitive Landscape and Forecasts to 2024

Future of the Israeli Defense Industry - Market Attractiveness, Competitive Landscape and Forecasts to 2024

Summary

Israel’s gross defense expenditure is anticipated to be US$130.3 billion cumulatively over the forecast period. Driven by the need to secure itself against potential threats from Iran, Saudi Arabia, Syria, and to a certain extent, Egypt, Israel has traditionally focused on developing a robust and aggressive defense posture. Israel, remains surrounded by enemies and potential rivals and thus the country can ill afford to ignore security risks that have the potential to develop into a major security threat in future. As one of the largest defense markets in the Middle East, Israel allocated a gross budget of US$20.3 billion in 2019 and is likely to continue spending heavily on fortifying its defense and security apparatus.

During the period 2015 to 2019, the Israeli gross defense expenditure increased from US$18.1 billion in 2015 to US$20.3 billion in 2019, reflecting a CAGR of 2.90% over the analysis period. However, the Israeli defense expenditure is anticipated to grow rapidly from US$21.9 billion in 2020 to US$30.5 billion in 2024, registering a CAGR of 8.59% over the forecast period. The growth can be partially attributed to US$19 billion worth of military aid that the country is scheduled to receive from the US between 2019 and 2023, coupled with the country’s plans to boost its investments in missile defense capability by about US$8-10 billion over the next decade.

Over the forecast period, Israeli defense expenditure as a percentage of GDP is anticipated to maintain an average of 4.5%, driven primarily by the Palestine conflict and the threats posed by the increasing influence of Iran and Hezbollah within neighboring Syria. Israel is expected to focus its expenditure on the procurement of fighter aircraft, missiles, corvettes, nuclear capable submarines, border security equipment, and communication systems, among others. These procurement plans are expected to maintain Israel’s capital expenditure allocation at 52.5% even in 2024.

Israel has one of the most advanced defense industries worldwide and the country has consistently ranked among the top 10 defense exporting countries globally. During 2013-2017, Israel was ranked eighth on the list of the highest arms exporting countries, with a share of 2.9% of the global arms market. During the period 2014-2018 India was the single largest customer for Israeli defense equipment, accounting for 46.3% share of the Israeli defense exports. Azerbaijan and Vietnam were ranked as the second and third largest markets for Israeli defense equipment accounting for 17.4% and 8.5% respectively. Asia is the major defense market for Israeli defense equipment and accounts for a 78.7% share of Israeli defense exports during the period 2014-2018.

The Israeli government imported fighter aircraft, naval vessels, missiles, armored vehicles, engines, sensors, and artillery systems during 2014-2018. The US accounted for 50.8% of Israeli defense imports during this period, while India emerged as the single largest customer for Israeli defense goods with a share of 46.3%. The three key Israeli arms export categories were missiles, air defense systems and sensors.

The report Future of the Israeli Defense Industry - Market Attractiveness, Competitive Landscape and Forecasts to 2024, offers detailed analysis of the Israeli defense industry with market size forecasts covering the next five years. This report will also analyze factors that influence demand for the industry, key market trends, and challenges faced by industry participants.

In particular, it provides an in-depth analysis of the following -

  • The Israeli defense industry market size and drivers: detailed analysis of the Israeli defense industry during 2020-2024, including highlights of the demand drivers and growth stimulators for the industry. It also provides a snapshot of the country’s expenditure and modernization patterns
  • Budget allocation and key challenges: insights into procurement schedules formulated within the country and a breakdown of the defense budget with respect to the army, navy, and air force. It also details the key challenges faced by defense market participants within the country
  • Porter’s Five Force analysis of the Israeli defense industry: analysis of the market characteristics by determining the bargaining power of suppliers, bargaining power of buyers, threat of substitution, intensity of rivalry, and barriers to entry
  • Import and Export Dynamics: analysis of prevalent trends in the country’s imports and exports over the last five years
  • Market opportunities: details of the top five defense investment opportunities over the next 10 years
  • Competitive landscape and strategic insights: analysis of the competitive landscape of the Israeli defense industry. It provides an overview of key players, together with insights such as key alliances, strategic initiatives, and a brief financial analysis
Companies mentioned: General Dynamics, Navistar Defense, Lockheed Martin, Raytheon , Boeing , Rafael Advanced Defense Systems,Israel Aerospace Industries (IAI), Elta Systems, Israel Shipyards, Elbit Systems, Elisra Systems, IMI Systems, TSG IT Advanced Systems Ltd, Plasan and SimiGon

Scope
  • Israel’s defense expenditure as a percentage of its GDP is anticipated to increase to an average of 4.5% over the forecast period. The Israeli defense budget, which stands at about US$17.6 billion in 2019.
  • Between 2015 and 2019, the country’s capital expenditure allocation stood at an average of 52.1% of the total defense budget, and is expected to increase slightly to an average of 52.6% over the forecast period. Overall, Israel is projected to spend a total of US$68.5 billion on the acquisition of military hardware between 2020 and 2024.
  • The MoD is expected to invest in physical security of critical infrastructure, land-based C4ISR systems, infrastructure construction , Armored Personnel Carriers (APC), Multirole Fighter aircraft and Corvettes among others.
Reasons to buy
  • This report will give the user confidence to make the correct business decisions based on a detailed analysis of the Israeli defense industry market trends for the coming five years
  • The market opportunity section will inform the user about the various military requirements that are expected to generate revenues during the forecast period. The description includes technical specifications, recent orders, and the expected investment pattern by the country during the forecast period
  • Detailed profiles of the top domestic and foreign defense manufacturers with information about their products, alliances, recent contract wins, and financial analysis wherever available. This will provide the user with a total competitive landscape of the sector
  • A deep qualitative analysis of the Israeli defense industry covering sections including demand drivers, Porter’s Five Forces Analysis, Key Trends and Growth Stimulators, and latest industry contracts.


  • Introduction
    • What is this Report About?
    • Definitions
    • Summary Methodology
    • About GlobalData
  • Executive Summary
    • Table Israeli Analysis of Defense Budget: 2020 and 2024
    • Table Israeli Defense Imports/Exports: 2014 and 2018
  • Market Attractiveness and Emerging Opportunities
    • Table Israeli Top Five Prospective Procurements/Developments
    • Current Market Scenario
      • Primary threat perception
        • Table Israeli National Security Threats
      • Military Doctrine & Strategy
      • Procurement Programs
        • Table Israeli - Ongoing Development and Procurement Programs, 2019
        • Table Israeli - Future Procurement Programs, 2019
        • Table Israeli Top Defense Procurement Programs by Value (US$ Million), 2019-2024
      • Social, Political and Economic Environment & Support for Defense Projects
      • Political and Strategic Alliances
        • Table Israeli Partnering Countries for Defense Cooperation and Military Training
        • Table Israeli Defense Cooperation
        • Table Israeli Military Training Exercises
    • Defense Market Size Historical and Forecast
      • Israel's gross defense expenditure (inclusive of income dependent expenditure) to register a CAGR of 8.74% over 2020-2024
        • Table Israeli Gross Defense Expenditure (ILS Billion & US$ Billion), 2015-2024
        • Table Israeli Gross Defense Expenditure (ILS Billion), 2015-2024
        • Table Israeli Gross Defense Expenditure (US$ Billion), 2015-2024
      • Israel's net defense expenditure (excluding income dependent expenditure) to register a CAGR of 9.52% over 2020-2024
        • Table Israeli Net Defense Expenditure (ILS Billion & US$ Billion), 2015-2024
        • Table Israeli Net Defense Expenditure (ILS Billion), 2015-2024
        • Table Israeli Net Defense Expenditure (US$ Billion), 2014-2023
      • Israeli revenue dependent expenditure, inclusive of US military aid, will post a forecast-period CAGR of 6.07%
        • Table Israeli Revenue Dependent Defense Expenditure Including US Aid (ILS Billion and US$ Billion ), 2015-2024
        • Table Israeli Revenue Dependent Expenditure (ILS Billion), 2015-2024
        • Table Israeli Revenue Dependent Defense Expenditure (US$ Billion), 2015-2024
        • Table Israeli - Defense Budget Including Revenue Dependent Expenditure vs Israeli Defense Expenditure Excluding Revenue Dependent Expenditure (US$ Billion), 2015-2024
      • Hostile neighborhood, combined with terrorist threats, will continue to drive Israeli defense expenditure
    • Analysis of Defense Budget Allocation
      • The defense budget as a percentage of GDP is expected to be 4.5% over the forecast period
        • Table Israeli GDP Growth vs Defense Expenditure as a Percentage of GDP Growth, 2015-2024
        • Table Israeli GDP Growth vs Defense Expenditure as a Percentage of GDP, 2015-2024
      • The majority of Israel's defense budget is earmarked for capital expenditure
        • Table Israeli Defense Budget Split Between Capital and Revenue Expenditure (%), 2015-2024
        • Table Israeli Defense Budget Split Between Capital and Revenue Expenditure (%), 2015-2024
      • Capital expenditure forecast to increase at a CAGR of 8.69% over 2020-2024
        • Table Israeli Defense Capital Expenditure, (ILS Million & US$ Billion), 2015-2024
        • Table Israeli Capital Budget Allocation (ILS Billion), 2015-2024
        • Table Israeli Capital Budget Allocation (US$ Billion), 2015-2024
      • Per capita defense expenditure expected to increase over the forecast period
        • Table Israeli Per Capita Defense Expenditure (US$), 2015-2024
        • Table Israeli Per Capita Defense Expenditure (US$), 2015-2024
    • Homeland Security Market Size and Forecast
      • Israeli homeland security market expected to grow at a CAGR of 5.75% over the forecast period
        • Table Israeli Homeland Security Expenditure, (ILS Billion & US$ Billion), 2015-2024
        • Table Israeli Homeland Security Budget (ILS Billion), 2015-2024
        • Table Israeli Homeland Security Budget (US$ billion), 2015-2024
      • Measures to curb illegal immigration and organized crime to drive homeland security expenditure over the forecast period
    • Benchmarking with Key Global Markets
      • Israel is one of the largest defense spenders in the Middle East
        • Table Benchmarking with Key Markets - 2015-2019 vs 2020-2024
        • Table Benchmarking with Key Markets - 2015-2019 v/s 2020-2024
      • The US has the largest defense expenditure in the world
        • Table Defense Expenditure of the World's Largest Military Spenders (US$ Billion), 2019 and 2024
      • Israeli defense expenditure expected to reach 4.9% of GDP by 2024
        • Table Defense Expenditure as a Percentage of GDP of Largest Military Spenders (%), 2019
    • Market Opportunities: Key Trends and Growth Stimulators
      • Top 10 Defense Sectors by Value (US$ Million) - Projections over 2019-2024
        • Table Top Israeli Defense Sectors by Value (US$ Million), 2019-2024
      • Critical Infrastructure Protection - Physical Security
        • Table Israel's Physical Security Market Size (US$ Million), 2019-2024
      • Land-based C4ISR
        • Table Israel's Land Based C4ISR Market Size (US$ Million), 2019-2024
      • Infrastructure Construction
        • Table Israel's Military Infrastructure Construction Market Size (US$ Million), 2019-2024
  • Defense Procurement Market Dynamics
    • Table Top Israeli Defense Procurements in Terms of Their Supplier Relationships
    • Import Market Dynamics
      • Defense imports increased after 2014 reaching highest point in 2015
        • Table Israel Defense Imports TIV Value (US$ Million), 2014-2018
      • The US accounted for over 64.1% of Israeli defense imports during 2014-2018
        • Table Figure 28 : Israeli Arms Imports by Country, 2014-2018
      • Aircraft accounted for the majority of Israeli defense imports
        • Table Israeli Defense Imports by Category (%), 2014-2018
    • Export Market Dynamics
      • Israel exports a major portion of its domestic defense production
        • Table Figure 30 : Israeli Defense Exports TIV Value (US$ million), 2014-2018
      • India, Azerbaijan and Vietnam emerged as the largest importers of Israeli defense equipment
        • Table Figure 31 : Israeli Defense Exports by Country (%), 2014-2018
      • Missiles, sensors and air defense systems were the most exported defense goods
        • Table Figure 32 : Israeli Defense Exports by Category (%), 2014-2018
  • Industry Dynamics
    • Five Forces Analysis
      • Table Industry Dynamics - Porter's Five Forces Analysis
      • Bargaining Power of Supplier: Medium-High
      • Bargaining Power of Buyer: High
      • Barrier to Entry: Low to Medium
      • Intensity of Rivalry: High
      • Threat of Substitution: Medium to High
  • Market Entry Strategy
    • Market Regulation
      • Offset policy requires foreign OEMs to invest 50% of the contract value in Israel
        • Table Israeli Defense Offset Regulations
      • Defense sector remains closed to foreign direct investment
    • Market Entry Route
      • Procurement Policy and Process
      • Foreign companies penetrate the market by supplying arms
      • Foreign OEMs form alliances to market products in the global defense industry
        • Table Market Entry by Key Foreign OEMs
    • Key Challenges
      • Table Israeli Market Challenges
      • Israeli defense industry highly dependent on the US
      • Monopolistic competition
  • Competitive Landscape and Strategic Insights
    • Competitive Landscape Overview
      • Table Competitive Landscape of the Israeli Defense Industry
      • Table Top Defense Suppliers in the Israeli Defense Industry By Value (US$ Million), 2019-2024
      • Israeli Market Share Analysis, 2019-2024
        • Table Israeli Market Share Analysis, 2019-2024
      • Domestic companies fulfill the majority of Israeli defense requirements
    • Key Foreign Companies
      • General Dynamics: Overview
      • General Dynamics: Products
        • Table General Dynamics - Products
      • General Dynamics: Recent Announcements and Strategic Initiatives
      • General Dynamics: Alliances
        • Table General Dynamics - Alliances
      • General Dynamics: Recent Contract Wins
        • Table General Dynamics - Recent Contract Wins
      • Navistar Defense: Overview
      • Navistar Defense: Products
        • Table Navistar Defense - Products
      • Navistar Defense: Recent Announcements and Strategic Initiatives
      • Navistar Defense: Alliances
        • Table Navistar Defense - Alliances
      • Navistar Defense: Recent Contract Wins
        • Table Navistar Defense - Recent Contract Wins
      • Lockheed Martin: Overview
      • Lockheed Martin: Products
        • Table Lockheed Martin - Products
      • Lockheed Martin: Recent Announcements and Strategic Initiatives
      • Lockheed Martin: Alliances
        • Table Lockheed Martin - Alliances
      • Lockheed Martin: Recent Contract Wins
        • Table Lockheed Martin - Recent Contract Wins
      • Raytheon: Overview
      • Raytheon: Products
        • Table Raytheon - Products
      • Raytheon: Recent Announcements and Strategic Initiatives
      • Raytheon: Alliances
        • Table Raytheon - Alliances
      • Raytheon: Recent Contract Wins
        • Table Raytheon - Recent Contract Wins
      • Boeing: overview
      • Boeing: products and services
        • Table Boeing - Product Focus
      • Boeing: recent announcements and strategic initiatives
      • Boeing: alliances
        • Table Boeing - Alliances
      • Boeing: recent contract wins
        • Table Boeing - Recent Contract Wins
    • Key Public Companies
      • Rafael Advanced Defense Systems: Overview
      • Rafael Advanced Defense Systems: Products
        • Table Rafael Advanced Defense Systems - Products
      • Rafael Advanced Defense Systems: Recent Announcements and Strategic Initiatives
      • Rafael Advanced Defense Systems: Alliances
        • Table Rafael Advanced Defense Systems - Alliances
      • Rafael Advanced Defense Systems: Recent Contract Wins
        • Table Rafael Advanced Defense Systems - Recent Contract Wins
      • Israel Aerospace Industries: Overview
      • Israel Aerospace Industries: Products
        • Table Israel Aerospace Industries - Products
      • Israel Aerospace Industries: Recent Announcements and Strategic Initiatives
      • Israel Aerospace Industries: Alliances
        • Table Israel Aerospace Industries - Alliances
      • Israel Aerospace Industries: Recent Contract Wins
        • Table Israel Aerospace Industries - recent contract wins
      • Elta Systems: Overview
        • Table Elta Systems - Key Products
    • Domestic Private Companies
      • Israel Shipyards: Overview
      • Israel Shipyards: Products
        • Table Israel Shipyards - Products
      • Israel Shipyards: Recent Announcements and Strategic Initiatives
      • Israel Shipyards: Recent Contract Wins
        • Table Israel Shipyards: Recent Contract Wins
      • Elbit Systems: Overview
      • Elbit Systems: Products
        • Table Elbit Systems - Products
      • Elbit Systems: Recent Announcements and Strategic Initiatives
      • Elbit Systems: Alliances
        • Table Elbit Systems - Alliances
      • Elbit Systems: Recent Contract Wins
        • Table Elbit Systems - Recent Contract Wins
      • Elbit Systems: Financial Analysis
        • Table Elbit Systems, Revenue Trend Analysis, 2014-2018
        • Table Elbit Systems, Operating Profit Trend Analysis, 2014-2018
        • Table Elbit Systems, Net Profit Trend Analysis, 2014-2018
      • IMI Systems: Overview
      • IMI Systems: Products and Services
        • Table IMI Systems - Products and Services
      • IMI Systems: Recent Announcements and Strategic Initiatives
      • IMI Systems: Alliances
        • Table IMI Systems - Alliances
      • IMI Systems: Recent Contract Wins
        • Table IMI Systems - Recent Contract Wins
      • Elisra Systems: Overview
      • Elisra Systems: Products
        • Table Elisra Systems - Products
      • Elisra Systems: Recent Announcements and Strategic Initiatives
      • Elisra Systems: Alliances
        • Table Elisra Systems - Alliances
      • Elisra Systems: Recent Contract Wins
        • Table Elisra Systems : Recent Contract Wins
      • TSG IT Advanced Systems Ltd.: Overview
      • TSG IT Advanced Systems Ltd.: Products and Services
        • Table TSG IT Advanced Systems Ltd. - Products and Services
      • TSG IT Advanced Systems Ltd.: Recent Announcements and Strategic Initiatives
      • TSG IT Advanced Systems Ltd.: Alliances
        • Table TSG IT Advanced Systems Ltd. - Alliances
      • TSG IT Advanced Systems Ltd.: Recent Contract Wins
        • Table TSG IT Advanced Systems Ltd. - Recent Contract Wins
      • Plasan: Overview
      • Plasan: Products
        • Table Plasan - Products
      • Plasan: Recent Announcements and Strategic Initiatives
      • Plasan: Alliances
        • Table Plasan - Alliances
      • Plasan: Recent Contract Wins
        • Table Plasan - Recent Contract Wins
      • SimiGon: Overview
      • SimiGon: Products
        • Table SimiGon - Products
      • SimiGon: Recent Announcement and Strategic Initiatives
        • Table SimiGon: Alliances
      • SimiGon: Alliances
        • Table SimiGon - recent contract wins
  • Business Environment and Country Risk
    • Economic Performance
      • GDP Per Capita
        • Table Israeli GDP Per Capita, 2015-2025
      • GDP, Current Prices
        • Table Israeli GDP, Current Prices (US$ Billion), 2015-2025
      • Export of Goods and Services (LCU Billion)
        • Table Israeli Export of Goods and Services (LCU Billion), 2005-2014
      • Import of Goods and Services (LCU Billion)
        • Table Israeli Import of Goods and Services (LCU Billion), 2005-2014
      • Gross National Disposable Income (US$ Billion)
        • Table Israeli Gross National Disposable Income (US$ Billion), 2005-2014
      • Local Currency Unit per US Dollar
        • Table Local Currency per US$, 2015-2024
      • Market Capitalization of Listed Companies
        • Table Israeli Market Capitalization of Listed Companies (US$ Billion), 2005-2012
      • Market Capitalization of Listed Companies (% of GDP)
        • Table Israeli Market Capitalization of Listed Companies (% of GDP), 2005-2012
      • Government Cash Surplus/Deficit as a Percentage of GDP
        • Table Israeli Government Cash Surplus/Deficit as a Percentage of GDP, 2005-2012
      • Goods exports as a Percentage of GDP
        • Table Israeli Goods Exports as a Percentage of GDP, 2005-2014
      • Goods imports as a Percentage of GDP
        • Table Israeli Goods Imports as a Percentage of GDP, 2005-2014
      • Service Imports as a Percentage of GDP
        • Table Israeli Service Imports as a Percentage of GDP, 2005-2014
      • Service Exports as a Percentage of GDP
        • Table Israeli Service Exports as a Percentage of GDP, 2005-2014
      • Foreign Direct Investment
        • Table Israeli Foreign Direct Investment (US$ Billion), 2005-2014
      • Net Foreign Direct Investment as a Percentage of GDP
        • Table Israeli Net Foreign Direct Investment as a Percentage of GDP, 2005-2014
      • Mining, Manufacturing, Utilities Output (LCU Bn)
        • Table Israeli Mining, Manufacturing, Utilities Output (LCU Bn), 2005-2014
  • Appendix
    • Disclaimer

Download our eBook: How to Succeed Using Market Research

Learn how to effectively navigate the market research process to help guide your organization on the journey to success.

Download eBook