52 The Potential for Israeli Technology A pivotal question arises: Where does Israel fit into this transformation? Israel is home to numerous defence-tech companies, offering solutions like advanced drones, AI-driven systems, and cybersecurity. These technologies, developed in response to real-world challenges, are characterised by rapid development and field-proven effectiveness. Despite this, only a small fraction of Israeli companies have prioritised Europe as a strategic market. Addressing Historical Barriers For years, Europe was perceived as slow-moving, bureaucratic, and, most importantly, uninterested in defence innovation. That perception is now outdated. Challenges remain. European investment in Israeli high-tech has dropped to a six-year low. Factors include geopolitical instability, anti-Israel sentiment, regulatory constraints, and economic stagnation in key markets. These challenges underscore the need for a proactive strategy. Israeli entrepreneurs must recognise that Europe is now an open, well-funded market seeking technological solutions. A Strategic and Financial Necessity This is more than a business opportunity; it is a strategic necessity. The European Commission plans to bolster defence spending with €800 billion, plus €150 billion in loans for sector investments. Israel’s competitive edge lies in delivering real-time innovation, stress-tested in operational environments, with rapid deployment capabilities. This advantage extends over European competitors and global powerhouses like the United States and South Korea. European nations have committed over $1 trillion in additional defence spending. France is nearly doubling its defence budget, and Poland has allocated 4.7% of its GDP to defence. This demand for technology includes cybersecurity, communication systems, air defence, and digital maintenance solutions. A Market Seeking Solutions Europe is not looking for ideas, it seeks precise, ready-to-deploy solutions. It has capital, structured procurement frameworks, and openness to partnerships
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