Israel has enjoyed dominance in the military unmanned aerial system market since the 1980s. Now internal and external competition and other factors are eroding the lead that this small Middle Eastern state has held since 1985.

Between 2010 and 2014, Israel topped the world in UAS exports, delivering 165 abroad, according to the Stockholm International Peace Research Institute. But as the number of UASes transferred between countries reaches an all-time peak, can Israel maintain its position as one of the top UAS exporters?

Every month, Israel’s primacy in the sector is complicated by geopolitical concerns, domestic industrial base concerns and increasing global competition.

Last year, the Israeli foreign ministry blocked the sale of UASes to Ukraine to avoid damaging relations with Russia.

Since the armed conflict between Russia and Ukraine started in 2014, Ukraine expressed an urgent need for small tactical Israeli UASes. The country began negotiations with IAI and Elbit Systems. At least one reached a very advanced stage. Ultimately, the foreign ministry backed off, not wanting to provoke Moscow, according to government sources. 
In Poland, an aggressive attempt by IAI and Elbit Systems to make UASes for the Polish Army prompted international manufacturers to team with local Polish companies and bid for UAS contracts.

Clearly, Israel’s UAS exports to foreign countries do not depend solely on their quality and price.

Plus, while competing countries receive government assistance to market their products, Israeli politicians refrain from doing so. Israel as a state has failed to fortify the status of the local UAS industry. Plus, in many cases, systems made by Israeli companies are not cleared for export.

This lack of big-picture thinking could set the industry back in the future.

And it comes at a time when leadership has become more difficult. U.S. companies are now competing on tenders that had been considered “marginal” money-wise. “Now we find American companies in almost every competition,” says a source in the ministry of defense.

China and other countries are wading into the UAS export market, too.

And all the while, Israeli companies continue fighting against each other. Not only could these factors affect the financial annual reports of the Israeli companies, but they could hamper the funds available to keep Israel where it has been – developing cutting-edge technology for new generations of UASes.