The report “Israel’s Medical Industry under Increasing Global Competition: Risks and Opportunities” is devoted to an analysis of Israel’s medical industry in the context of global competition. The development of Israel’s pharmaceutical sector, medical device, biotechnology, and digital health is of interest not only as a case of successful sectoral modernization under the constraints of a limited domestic market, but also as an illustration of how a small state can secure a niche within international value chains by relying on innovation, export specialization, and integration into global scientific and technological processes. Special attention is paid to the industry’s internal structure, the role of its leading companies, as well as the opportunities and constraints inherent in the Israeli development model. The analysis is conducted with due regard to the impact of international regulation, capital flows, and technology transfer.