David Fulghum Tel Aviv

There are ominous converging trends in the defense world. New technologies, in particular cyberdevelopments and advanced electronics, are growing exponentially in cost. At the same time, military budgets are falling rapidly and will continue to do so. The survivors of the coming turmoil will be those who embrace the formula of faster, smaller, better and cheaper.

Molded in that model is Israel Aerospace Industries' (IAI) new chief, who has plans to boost spending on advanced cyber, stealth, radar, communications, air defense, unmanned aircraft and gallium nitride microchip technologies.

On the commercial side, the emphasis will be on exploring opportunities for producing longer-range executive jets.

Military officials in both Israel and the U.S. say there is an operational need for lower-cost, stealthy, unmanned aircraft designs—perhaps like Lockheed Martin's RQ-170—that can serve as a persistent, network node that uses easily interchangeable intelligence, surveillance and reconnaissance (ISR) payloads. These platforms are seen as filling a different role from the more expensive and stealthier X-47-like aircraft that would conduct the unmanned strike mission. However, the lower-cost, stealth designs will eventually carry weapons as well, these officials say.

Moreover, defense planners in both countries have accepted the fact that stealth is a perishable product with today's designs good for 5-10 years, while the airframes themselves will operate for 30-40 years; this will drive them to adopt advanced cyber and electronic warfare options to protect their aircraft as they mature.

“Those are delicate things, I cannot discuss them, but IAI through the years has done everything it can to keep the technological and operational edge,” says new IAI President and CEO Joseph Weiss. A mechanical engineer with an MBA degree, Weiss led a program to develop Dolphin submarines for the defense ministry and became general manager of all space-related activities for IAI's MBT space division in 2003.

“We will have to deal deeply with cyber-issues and with all aspects and types of low signatures,” says the 61-year-old Weiss. “I think IAI has to enlarge the percentage invested in its own R&D to keep its technological edge over competitors and to support the state of Israel. We have to improve the affordability of state-of-the-art technology to compete in international markets. And we have to increase our hold on the space domain.”