TOKYO -- Japan is to sign a memorandum of understanding with Israel on technological cooperation as part of its efforts to step up cybersecurity ahead of the 2020 Tokyo Olympics.
The signing could take place this year.
While Japan wants to boost its defenses against cyberattacks in the runup to the 2020 games, Israel is seeking to strengthen its presence in Asia's cybersecurity market.
Until several years ago, nomads could be seen herding sheep in Beer Sheva, in southern Israel, a city whose name appears in the Old Testament. But Beer Sheva has been changing dramatically.
The Israeli government two years ago set up CyberSpark, a special information-technology zone, on the campus of Ben-Gurion University of the Negev in Beer Sheva. The school is known for its science and technology prowess.
CyberSpark is meant to bring together people from the government, the military and international companies. Together, it is hoped these specialists forge a strategic hub for cyber-related technological development.
The modern complex houses the offices of Germany's Deutsche Telekom and other companies. Military engineers have also been moving to CyberSpark from Greater Tel Aviv.
CyberSpark has become a place where competent people with military, industrial and academic backgrounds fuse their ideas together, said Shelly Gotman, a former brigadier general of the Israeli air force who currently serves as a top executive of Leidos Holdings' Israeli subsidiary.
Deceiving hackers
In August, Leidos, a U.S. defense-related company, acquired Lockheed Martin's information systems unit, which has a research and study facility in Israel.
Israel has long been in conflict with Palestinians, its neighbors and terrorists. To cope with security threats, it has focused on developing military technologies.
But in recent years the main battlefield has shifted to cyberspace, where Israel purportedly comes under attack tens of thousands of times a day.
Under these circumstances, Israel is scrambling to beef up its technological capabilities, with Unit 8200, the military's elite intelligence organization, playing a central role.
Israel now leads the world in cyber-related technologies.
Go back to 2010 for an example. A cyberattack that year paralyzed Iran's nuclear facilities. It began with a computer virus that is said to have been created by Unit 8200 and the U.S. National Security Agency.
In Israel, many people, like Gotman, join the business world by utilizing the experiences and personal connections they accumulate while serving in the military. This has helped the country's cybersecurity industry blossom.
Illusive Networks was founded by three former Unit 8200 officials. It has developed unique software that protects client companies from online attacks by deceiving hackers.
Still rising
Hackers who break into the computer systems of companies using the software think they are stealing real data. The hackers' movements are then detected and recorded. Countermeasures are quickly taken.
Other Israeli cybersecurity companies are in the global spotlight. Last year, CyActive was acquired by PayPal, the U.S.-based online payments giant.
CyActive's anti-malware packages now form a command center that directs PayPal's war against hackers.
Investment in Israel's high-tech sector totaled $4.5 billion in 2015, increasing for a seventh year in a row and doubling from two years earlier. Cyber-related investment also grew in 2014 and 2015.
Foreign investors accounted for 80% to 90% of overall investment in Israel's high-tech sector in those two years. Foreign investors are mainly from the U.S. and Europe, but Asian investors are also gradually increasing in number.
The Israeli government has set its sights on Asia as a future destination for its cyber defense and technology exports and as a source of investment partners, said Ohad Cohen, a senior government official. One reason for this is that Israel is sending a smaller percentage of its overall exports to Europe, whose investment role is also diminishing.
Cohen, who heads the Foreign Trade Administration at the Israeli Ministry of Economy, also said Israel is now addressing the challenge of diversifying its trade partners by reducing its heavy reliance on the U.S. and Europe.
According to Cohen, 15% of Israel's exports went to Asia 15 years ago. The number has since nearly doubled and is still rising.
CyberSpark's headquarters
Golden opportunity
Israel has stationed more commercial officers in Asian countries such as China and India, Cohen said. It has also set up new trade offices in Vietnam, the Philippines and elsewhere in the region.
CyberSpark CEO Roni Zehavi on Sept. 5 began a visit to Japan, which he sees as an attractive market for Israel's anti-hacker technologies ahead of the 2020 Olympics.
"Israeli companies were involved in the cyber defense project of Rio de Janeiro [during this summer's Olympics)," Zehavi said. Citing the threat of cyberattacks in 2020, Zehavi said, "I am very happy to collaborate with Japan."
Japan's Financial Services Agency next month will carry out a large-scale joint exercise to prepare for possible cyberattacks; 80 financial institutions will participate.
Some banks are gearing up for the exercise by adopting countermeasures offered by Israeli cybersecurity companies.
CyberArk Software has already set up a Japanese subsidiary. Other Israeli cybersecurity companies are expected to consider doing the same.
Cyber defense cooperation between Japan and Israel started after a 2014 summit between their prime ministers, Shinzo Abe and Benjamin Netanyahu.
The Tokyo Olympics will likely provide a golden opportunity for Israel to enhance its presence in Asia's cyber defense market.
