Over the past year alone, Germany, Finland, Greece, Serbia, and Slovakia have become part of a growing list of European states that have chosen to deepen their strategic ties with Israel by investing directly in its defense capabilities, just as the Jewish state is facing some of the harshest diplomatic headwinds in its history.
At a moment when Israel has become, for many in Europe, a convenient punching bag – accused of genocide in Gaza, blamed for prolonging the war, and pushed into one of the most severe diplomatic crises in its history – something unexpected is happening beneath the surface. A powerful engine of economic, security, and diplomatic resilience is emerging from defense technology, a sector once viewed as niche.
Over the past few years, Israel’s defense-tech industry has evolved into a global powerhouse. Some argue – and I count myself among them – that Israel is shifting from a Start-Up Nation to a Defense-Tech Nation.
The wave of foreign investment and strategic partnerships is impressive. The deeper significance, however, is that Israel’s defense-tech sector has become the country’s most important insurance policy. In a global system driven by interests, advanced defense capabilities are the central interest that motivates nations to remain aligned with us.
This transformation is not only reflected in the growth of local defense companies or in the rising number of government delegations visiting the country. It is also clearly reflected in global capital markets. Stock exchanges are the world’s early-warning system, a real-time indicator of where humanity believes it is heading. And today, the markets are signaling something unmistakable.
For years, companies in certain sectors – renewable energy, for example – soared to astronomical valuations, only to collapse when the hype faded. Today, some of the strongest performers on the US stock market are traditional defense giants, such as Lockheed Martin and Boeing. Alongside them, new-generation defense players, notably Palantir, have surged dramatically over the past two years.
These trends reflect a sobering global intuition: The world is preparing for conflict. The arms race is accelerating, and the defense sector is becoming one of the most strategically important industries on the planet.
This dynamic is clearly visible in Europe’s courtship of Israel’s defense industry.
In recent weeks, this trend reached a new peak with the historic Arrow 3 missile defense deal between Israel and Germany. Even before the system is fully deployed on German soil, Berlin is already discussing deeper cooperation, including additional acquisitions and even the possibility of a formal defense partnership.
It does not stop there.
Slovakia recently signed an agreement to purchase the Barak MX system, an advanced Israeli air defense system, in a deal worth approximately NIS 2 billion.
Finland purchased Rafael’s David’s Sling system in a deal worth hundreds of millions of shekels.
Greece acquired integrated defense systems worth billions of shekels. And more countries are quietly lining up.
All of this is happening before Israel has even begun global marketing of its laser-based defense systems, technologies that are expected to truly revolutionize the field and further intensify global demand for the Jewish State’s defense industry.
The world today is at a historically dangerous moment. Dozens of regions are preparing for war in the Middle East, in Europe (bracing against Russia), and due to escalating tensions between Taiwan and China, Thailand and Cambodia, and India and Pakistan. Nations are positioning themselves at the starting line of an arms race unlike anything seen in decades.
In this environment, Israel’s defense-tech industry is no longer merely a source of economic growth. It effectively becomes a strategic asset of the highest order, strengthening Israel militarily, economically, and diplomatically.
Over the past year, European governments have reached two sobering conclusions: One, that their region could ignite into a large-scale war, even a third world war, at any moment. And two, that given current global conditions, Israel might be the West’s most reliable defense partner.
Israel’s defense-tech sector is not just building systems. It is building alliances, leverage, and long-term strategic security. In a world sliding toward instability, that may be the most valuable asset a nation can possess.
The writer is the CEO of Robel Innovation and the founder of the “30 Under 30” competition for promising young leaders and the “Top 10 Start-ups” competition in the defense sector.