With a promised $80 million cash injection every year for the next five years, its lucrative defense and communications industries as a solid base, and a new satellite research accord with NASA, Israel is looking to space as its newest high-tech business frontier.

Capitalizing on its defense, communications and IT industry, Israel plans on kick starting a potential $10-billion-a-year business in a $250 billion global civilian space industry. The country already boasts a $5 billion defense industry.

The 25 Israeli firms in the defense business, which include industry leaders such as Israel Aerospace Industries (IAI), Elbit and Rafael, are very interested in the country's new national space program, supported by the Netanyahu government and President Shimon Peres.

Israel is one of the world's few countries to build and launch satellites. In 1988, it became the seventh nation to launch an indigenous satellite into space and Israelis are experts in satellite technology, products for satellites and ground stations.

A world leader in satellite technology
Not only do its satellites weigh much less than conventional satellites, but Israel has developed expertise in the optical and radar photography of the Earth that the satellites supply. And this expertise has encouraged joint research and development with the US and other countries in the fields of solar and planetary research, black holes, and the universe.

Over the years, Israel has signed cooperation agreements with its allies' space programs including NASA in the US - most recently in August this year, the CSA in Canada, France's CNES, and Russia's RKA.

For Israel, the development of space technologies - the country currently exports a mere $800 million in sales each year - is intertwined with its well-developed defense, communications and IT industries, and may be the only channel for its long-term financial sustainability, say some of its proponents. Also, 'space' isn't just about spy satellites and astronauts.

"An Israeli defense satellite can be sent over Iran in a reconnaissance mission, but you can take the same satellite and use it over your own territory to detect pollution, and what's happening in the sea, or to study global warming," says retired Maj. Gen. Itzhik Ben-Israel, chairman of the Israel Space Industry (ISA), previously the head of R and D at Israel's Ministry of Defense.

Israel's established defense companies can produce satellites for military and defense uses, but also for civilian and scientific purposes, he says. Satellites are already being used to provide early warning of natural disasters from storms to locust swarms, as well as being employed for communications, defense and a host of other purposes.

According to Ora Coren, writing in Israel's Hebrew daily Ha'aretz, the Futron research company reports that Israel ranked the eighth biggest source of space-related sales, in a survey of the competitiveness of space companies around the world.

Referring to the new space program, she notes that however it's achieved "it will cost taxpayers hundreds of millions of shekels a year, but the Finance Ministry expects to gain more than just national pride from the investment. If the areas of the local aerospace industry that show potential are developed, the economic rewards could be huge, and along the way Israeli education, technology and society in general could receive a tremendous boost."

Israel and NASA
Israel's space story began back in 1982, when the ISA was established for reconnaissance missions against enemy states Iran, Iraq and Syria. IAI won the contract, and designed Israel's own Shavit (Hebrew for 'comet') space rocket, and its first artificial moon, the Ofeq (Hebrew for 'horizon') satellite.

In 2005, Israel signed an agreement with France's Space Agency, CNES to research an earth-observation technology onboard a satellite, with environmental and agricultural applications. And later this year, the Israeli agency will conduct an emerging technologies experiment with Italy's ASI. Israeli payload advances, the specialty of its first and only astronaut Ilan Ramon, are also being developed for space missions with distinguished scientists around the world.

A payload specialist, Ilan Ramon died tragically onboard America's ill-fated Space Shuttle Columbia in 2003. The country hopes to send more astronauts to space in the future, with scientific missions in mind.

Seven months ago, Israel officially joined the NASA initiative to research the moon and planets, through Ben-Gurion University of the Negev and the Technion-Israel Institute of Technology. Israeli scientists will participate in projects involving inter-satellite communications using laser systems and the monitoring of space satellites.

Following the signing of a joint statement of cooperation between the Israel Network for Lunar Science and Exploration (as an affiliate partner) and the NASA Lunar Science Institute, NASA's Administrator Charles Bolden was happy to comment: "NASA looks forward to working with this distinguished Israeli organization to benefit from our shared expertise and advance our understanding of lunar science."

Another astronaut in space?
The heads of NASA invited Science and Technology Minister Daniel Hershkowitz to Washington in August. In his meetings with Bolden, Hershkowitz says he discussed the possibility of sending a second Israeli astronaut into space.

"We talked about it, but the timing isn't clear because of the suspension of manned missions in NASA. It may happen in a Russian spaceship," Hershkowitz told Israel's Ynet website.

According to Hershkowitz, the US agency showed interest in Israel's satellites, which weigh a fifth of American and European satellites, yet have the same capabilities. An additional advantage of these satellites is that they can be launched from aircraft and not only from ballistic missiles.

Another Israeli specialty that caught NASA's attention is hyper spectral cameras which can detect land, air and sea pollution from space and classify types of soils and minerals, and the two also discussed Israeli developments in the field of satellite antennas aimed at analyzing photos using radars.

In August, the two organizations signed a memorandum of understanding to promote cooperation. NASA is planning to map out Venus, and Israeli technology will be used to help it see through the star's layer of clouds.

The two agencies will work together in new fields connected to earth and space sciences, life sciences and additional fields in which there is joint interest. The main intention is to expand the exchange of information and provide inspiration for the next generation of researchers, scientists and engineers.

"We're going for grandiose collaborations in areas NASA needs us. There are talks about collaboration in at least three areas where Israel is a leading force in the world of space," says Hershkowitz.

It started with defense needs
"In Israel we started developing towards the space industry because of our defense requirements," says Ben-Israel. But once you have it, the same infrastructure can be used for other applications, civilian or scientific. Satellites, for example, are dual technologies that can be produced on the same assembly lines that Israeli companies such as IAI are already using to build satellites for defense.

Following the peace treaty with Egypt, when Israel could no longer send aircraft over Egyptian territory to monitor activities in the Sinai desert, "We decided to develop space satellites, but it took time," Ben-Israel recounts. And since Israel's strong ally, America, does not sell its reconnaissance satellites to anyone, the country had to build its own. "We developed our own indigenous capabilities, and once we did this, the next natural step was other applications in the industry," he adds.

Still, launching satellites from Israel is not an easy task. With the country's limited size and borders, and range restrictions, space launches have to fly to retrograde orbits, meaning that any of Israel's space rockets must blast off across the Mediterranean Sea. They can't fly eastward over the neighboring Arab countries.

Starting with defense applications, Israeli companies created low-earth orbiting satellites, and moved naturally to the next stage - communications satellites. The next natural step would be to commercialize the communications satellites used by Israeli troops in the field to serve civilian applications such as TV, telephone and phone communication. According to Ben-Israel, it's a $150 billion a year market. "We want to sell more than the current $800m.," he says. "We have half a foot in the civilian space applications market. We want a full foot."

Seeking a sound strategic plan
Following his advice, the strategy is not just to encourage the development of Israeli "wow" technologies, but also a network of space industry companies to service satellites. Experience may be culled from Israel's advanced communications and IT businesses. "We can build on these components and be a major player in the global space market - worth $250 billion," he estimates.

Israel's defense industry will build on space, and it's more than a good reputation that Israel is banking on, he suggests. Companies in Israel's defense industry will contribute their share to co-developing the space market in line with the government' objectives. From this, Ben-Israel hopes to create a critical mass of interest that will encourage private funding from venture capitalists, and then public offerings.

As part of the country's new five-year plan, the Israel Space Agency has tasked local companies with targeting the civilian industry. One task on the agenda will be switching the photo capabilities of the EROS satellite from black and white to color. EROS - for Earth Resources Observation Satellite - is a series of Israeli commercial Earth observation satellites, designed and manufactured by IAI with an optical payload supplied by Israeli company El-Op.

Making plans not just for five years, but 10, 20 and even 50 years down the road is the task of Zvi Kaplan, director general of Israel's Space Agency. The physicist with a long career at Israel's Soreq nuclear research facility states that any plans for space must be developed with a long-range vision in mind. His is academic.

He'll be retiring next year to make way for a younger generation of management, he says, but meanwhile is working hard to ensure that the Israeli space industry will be linked to the academic world. At present only one engineering school in the country teaches about space, and he hopes to change that.

Kaplan explains: "First of all one must think about what kind of country we want to build. We want to build a country that our young people will not leave. Space is not the only idea, but it's a very good agenda. Nowadays there are more civilian applications, and space plays an important role in science. Most of the new discoveries in science will come from space - gravitational theory, field theory."

Space counters Israel's existential threats
Like his colleague Ben-Israel, Kaplan recognizes the importance of space research for understanding global weather patterns and ecological issues. "Space, whether it's looking at space from earth, or at earth from space, plays a huge role in the planetary environment; global warming, the threats - are they real, to what extent? How can we mitigate risks? Space is part of this information we are going to need," he explains.

"Space is also a part of the cutting edge of the world's technologies. If we want survivability, then Israel needs space to give its youngsters possibilities everywhere," asserts Kaplan, pointing out that Israel has learned the hard way about its need for space capabilities - "due to the amount of threats this country is subject to from North Korea to Algeria. It's big question of course, also, how the modern battlefield will look.

"How will we survive multiple threats - from small rockets from Gaza to ballistic missiles to the atom bomb? You name it; we have to do something in this area of using space for defense. Can we push [innovation] to civilian applications? Yes, because we must do it," Kaplan insists.

Israel has so far produced satellites, missiles, cameras, propulsion technologies, communications devices, and atomic clocks from space. But these applications come from the present and old era of Israel. Space offers so much more, says Kaplan: It allows a nation' young people to dream. And dreams are what Israel's 'start up nation' mentality is based on.

Young people need to imagine. It's more difficult for them when they are young to think about science in terms of biology or stem cells. Space is tangible and it addresses the imagination," Kaplan concludes.