Encryption in Israel

Interesting essay about how Israel regulates encryption:

...the Israeli encryption control mechanisms operate without directly legislating any form of encryption-key depositories, built-in back or front door access points, or other similar requirements. Instead, Israel's system emphasizes smooth initial licensing processes and cultivates government-private sector collaboration. These processes help ensure that Israeli authorities are apprised of the latest encryption and cyber developments and position the government to engage effectively with the private sector when national security risks are identified.

Basically, it looks like secret agreements made in smoke-filled rooms, very discreet with no oversight or accountability. The fact that pretty much everyone in IT security has served in an offensive cybersecurity capacity for the Israeli army helps. As does the fact that the country is so small, making informal deal-making manageable. It doesn't scale.
Why is this important?

...companies in Israel, a country comprising less than 0.11% of the world's population, are estimated to have sold 10% ($6 billion out of $60 billion) of global encryption and cyber technologies for 2014.