In an exclusive interview with Cyber Intelligence, Irina Tsukerman outlines the ongoing impact that the ongoing Israel/Hamas conflict is having not only on cybersecurity in the region, but on the global sector as a whole.
Irina Tsukerman is a US national security lawyer with a background in cybersecurity policy, a member of the American Bar Association’s Science and Technology Section, a geopolitical analyst, and President of Scarab Rising, Inc., and a security and geopolitical risk strategic advisor.
Cyber Intelligence: What has been the impact of the current Israel/Hamas conflict on Tel Aviv’s cybersecurity sector, which is said to attract over half the entire world’s cybersecurity spend?
Irina Tsukerman: Israel’s cyber start-ups have actually attracted a great deal of interest since the start of the war. Although major companies are moving their headquarters to locations unaffected by the conflict, investment in Israel’s own cybersecurity sector is increasing.
Cyber Intelligence: Has this been the case since the beginning of the conflict, and what kind of problem has the sector been facing?
Irina Tsukerman: In the early stages of the war, some companies canceled their funding announcements due to the impact of reserve duty and external pressures.
Cyber Intelligence: Are any of these difficulties still ongoing?
Irina Tsukerman: Although the funding has stabilized and the industry internal to Israel is resilient, local companies are facing challenges, including reserve duty for many of the members, high travel costs, which make it difficult for meetings to take place, and the issues of forced relocation which is particularly difficult for smaller companies. Macroeconomic conditions and political strife had prompted drop-offs in venture capital funding to Israeli companies and led roughly 70% of Israeli startups to relocate parts of their businesses.
Cyber Intelligence: How has the conflict affected the Middle East cybersecurity sector in general?
Irina Tsukerman: China’s role in the region as a cybersecurity rival to Israel is rising and benefiting from the exit of the international cybersecurity headquarters from the country as well as from the challenges to the Israeli cyber sector. China is a growing purveyor of cyber-surveillance software to other Middle Eastern states, including both Iran and Saudi Arabia, and is increasingly cooperating with countries like the UAE, which is currently sounding alarm bells in the US.
Cyber Intelligence: Why is that?
Irina Tsukerman: Where the US has offset some of this competition through major investments into the artificial intelligence (AI) sector, more direct cybersecurity issues in the region continue to benefit from China’s role. However, Israel is still managing to maintain strong cybersecurity ties with European states and European companies. However, it is facing stiff competition from the US, together with reputational damage resulting from the scandalous campaigns against Israel’s cybersecurity sector even before the war. The additional reputational risk related to the ongoing war in Gaza is compounding this negative impact.
Cyber Intelligence: So is it going to be a battle for the lion’s share of the Middle East cyber market between Israel, China and the US?
Irina Tsukerman: Emerging actors in the region, such as Saudi Arabia are also looking to develop their own independent cybersecurity sector. And countries like India, which maintains strong cooperation with Israel in that regard, are also keen to challenge China’s dominance in that area.
Cyber Intelligence: Is this an indication that the cybersecurity sector is becoming increasingly global in nature?
Irina Tsukerman: Israeli companies have likewise partially followed the trend of relocating to outside Israel; In many cases, cybersecurity companies in Israel maintain their marketing teams outside Israel in general, so their activity has remained unaffected.
Cyber Intelligence: How is Israel’s cybersecurity sector coping in general now that we are almost a year into the conflict?
Irina Tsukerman: Despite these conditions, Israel’s cybersecurity industry remains vibrant. It is facing additional challenges from the role in helping identify the location of the hostages and other forms of war-related cooperation with the government and also from the rising number of cyber-attacks by Iran and its proxies. On the other hand, Israel is also finding opportunity in the new challenges presented by the regional cyber-war escalation, leaving it in pole position to provide unique expertise to the US, which is seeing a rising number of election interference incidents by Iranian hackers.
Cyber Intelligence: Thank you.
