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Israelis may be surprised to learn that the recent breaches of Israeli cyberspace by foreign hackers could actually be a positive development for the country.

A team of self-described Saudi hackers managed to expose the details of more than 20,000 Israeli credit cards over the Internet, and threatened to expose more, unleashing panic among card holders and sending credit card companies and financial institutions into a frenzy as they worked to contain the damage. The widespread alarm sparked by the cyberattacks did not lack merit, as Israel relies heavily on technology for its security and defense systems, among other things.

After issuing a warning that it would do so, the same hacker network later paralyzed the websites of the Tel Aviv Stock Exchange, Israel’s national airline El Al, and some Israeli banks. While the websites only suffered “denial of service” attacks (meaning the sites’ servers were flooded by visitors), the attacks demonstrated that hackers from hostile countries are able to penetrate Israeli websites – corporate websites considered to be equipped with advanced cybersecurity resources, no less – from the comfort of their own homes.

According to some reports, the hackers even used computer systems from within Israel to paralyze the websites, providing further proof that parts of Israeli cyberspace are particularly permeable.

Was the Saudi hacker good for Israel?

The Saudi hacker’s perceived success went on to embolden Hamas and others to call for opening a “cyberfront” in the struggle against Israel: “This is a new field of resistance against the occupation and we urge Arab youth to develop their methods in electronic warfare in the face of [Israel’s] crimes.”

While the picture that emerges regarding the future of Israel’s cybersecurity appears quite grim, there is also some good news here.

First, much to the dismay of the Saudi hackers, and other foreign hackers who have targeted Israeli cybersystems, their online stunts have not propelled Israel into cyberdoom, or brought it even close. Even though Israel has been a frequent target of pro-Palestinian hackers, most of the cyber attacks have not been sophisticated enough to penetrate sensitive government websites or harm Israel’s strategic and critical infrastructure.

Second, in a new reality in which Israel’s battles are increasingly being waged in the cybersphere, the Saudi hackers’ attacks have provided Israel with a much-needed wake-up call.

Ram Levi, a cybersecurity adviser for the Science and Technology Ministry’s National Council for Research and Development, told me that the recent cyberbreaches have highlighted the importance of knowing what is happening in Israel’s cyberspace.

“We know what our airspace looks like and what is happening in our seas, but we know very little about what is going on in our cyberspace,” Levi said.

However, this may change following the recent hacker attacks.

Not only have the attacks brought Israel’s cybersecurity to the forefront of public awareness and dialogue, they have also prompted consumers, credit card companies, and other companies or citizens who use electronic databases, to be more cautious and to seek better ways of protecting their information.

“As the general public becomes more aware of potential threats, the demand for greater security in cyberspace will increase and we will have many [more] companies addressing this challenge providing state of the art, genuine and indigenous, cybersecurity solutions,” Levi told me.

To be able to meet demands for improved cybersecurity made more urgent by the recent Saudi hacker attacks, Israeli R&D companies are likely to get a major boost in investment. According to Levi, cooperation between the government, academia, and the private sector is already expected to bring Israeli cybersecurity R&D an estimated NIS 500 million (about $132 million) annually. The money is expected to go toward developing new technologies and infrastructures such as high-performance computing, cyberspace network simulations for developing breakthrough technology, national labs and academic excellence centers. There are also planned initiatives to reduce the brain-drain, encourage Israeli scientists abroad to return to Israel, and promote domestic cyberscience education.

The National Cyber Directorate, established last August by Prime Minister Benjamin Netanyahu to coordinate all the different bodies involved in protecting Israel’s cyberspace, will also work on promoting R&D to confront Israel’s technological shortcomings. This will include developing tools to ensure continuity and a reboot of essential systems harmed in information attacks, and what Levi refers to as a “national cyberdefense envelope” comprising automatic computerized systems and human systems that work together to provide cyberdefense.

Another positive consequence of the recent cyberattacks may be the most important one. As Israeli R&D companies work to fill the technological gaps exposed by foreign hackers, they will consolidate Israel’s position as a global “vanguard of the cyberfield” and of cyber security solutions. Netanyahu has said that his goal is to position Israel among the five leading cyber countries by 2015. The better Israel gets at tackling a variety of cyberattack scenarios, the closer it will come to becoming a cybersecurity powerhouse and the more powerful it will be in the event of a full-fledged cyberwar.

In the end, Israelis have the potential to emerge from the Saudi hacker attacks smarter, stronger, more aware and more technologically-advanced in their command of cyberspace.

Reprinted here with permission from Israel Hayom.