Antiterror, Inc. Israel: Already Experienced in Security and Crisis Management, Tech Firms Have Services to Export

By Benedek, Emily | Newsweek, November 12, 2001 | Go to article overview

Antiterror, Inc. Israel: Already Experienced in Security and Crisis Management, Tech Firms Have Services to Export


Benedek, Emily, Newsweek


From his Jerusalem office, Fitz Haney looks out on a city that used to teem with foreign business people. American investment in Israel's once booming technology sector is down by half over the past year. Fallout from the intifada? Not really, says Haney, a senior associate at Israel Seed Partners, the largest seed-stage venture-capital fund in the country. The trouble was dot-bombs, not real bombs. "We have a saying around here," he says. " 'Nasdaq has been more detrimental to Israeli investment than Nablus has'."

In fact, since Sept. 11, things have been looking up in one segment of the technology sector. Israel's grasp of terrorism's grim realities gives it expertise the rest of the world could use. Airline safety? The Israelis know it cold. Secure facilities? They wrote the book. The country has firms that do everything from airport protection to crisis management. And they have these services to export.

When Nasdaq reopened the week after the attacks, there was widespread financial carnage. But Magal Security Systems, an Israeli company, saw its share price double that day. Best known for its "smart" fences, the company was created in the 1960s in response to an Israel Defense Forces request for a method of securing the country's borders. Founded as a unit of Israel Aircraft Industries, it was spun off and now has a market cap of $70 million and 2001 revenues estimated at $40 million.

Israel's borders with its Arab neighbors are secured with Magal fencing--though not the West Bank, because of uncertainty about where to draw the borders. The company installed security systems at Buckingham Palace, is just completing work at Chica-go's O'Hare airport and has installed equipment at more than 400 U.S. correctional facilities. Magal systems don't necessarily prevent entry (or exit). They determine whether an intruder is human or not--false alarms are dangerous. They can track an interloper's movements, using such sensing systems as motion detectors, vibration detectors and microphonic cable disturbance. Magal also builds night-vision systems and offers fences that can secure waterways and sewer pipes. Its sensors can even identify the nature of a breach--was the fence cut, pushed or climbed over?--and communicate it to a command center. Since Sept. 11, says CEO Jacob Even-Ezra, a former counterterror expert in the Israeli Army Reserves, "we have been flooded with inquiries" from U.S. airports, reservoirs and oil refineries.

Airborne terror has been a top Israeli concern ever since the epidemic of Middle East hijackings that began in 1968. International Consultants on Targeted Security (ICTS), a 19-year-old company that employs 11,000 people worldwide in 90 locations and has $200 million in revenues, provides airport and airline security. The company offers an array of customized services for analyzing risk, training security personnel and creating security systems--in some cases, to the level of hand-inspecting every food tray that is placed onboard an aircraft by its catering service. It handles preboarding screening with computers that cross-check the validity of passports and visas. It has developed software to examine cargo manifests for suspicious shipments and employs special machines to graphically "slice" carry-on baggage for more detailed inspection than conventional X-ray equipment. With systems like these, claims ICTS president and CEO Lior Zouker, a former air marshal for El Al airlines, there is no need to "reinvent the wheel" in airport security.

Now a company called Ganden Security Services Solutions (GS-3) has started up to help fight the newly escalated war. It boasts an all-star team of Israeli aviation. The CEO is Gen. Joel Feldschuh, a former head of Israeli Air Force intelligence during the gulf war who later served as CEO of El Al.

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