Research reveals the importance of IDI for Israel as it enables equipping own Armed Forces with advanced weapons, allows armament exports and facilitates developments in other sectors. Throughout the time Israel defense industry transformed as inner and outer circumstances forced that change. Israel Ministry of Defense acts as a main IDI facilitator in different fields. Well established links between Government, defense institutions, academia, investors and arms manufacturers contribute to arms quality, innovations and availability of export markets. US support remains a powerful instrument to boost IDI. Most authors claim that investment in education, Governmental efforts to encourage innovation and business expenditures on R&D, international cooperation within academia and industry, defense companies adaptability remains crucial factors for successful development of indigenous defense industries.