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The intention of this paper is to analyze the impact of a threat environment in the creation of a hi-tech cluster through the development of an independent defense industry. In order to conclude the implications of a military industry in the development of a hi-tech cluster, it was studied the case of the evolution of Israel's defense industry into a diverse hi - tech industry (Silicon Wadi). As it will be presented in this study, the major implication of having an independent defense industry is that it creates a path dependency in the military sector and if it's handled correctly through the cooperation between academia, military forces and business sectors it will be possible to create transitions of this technologies into civilian applications, diversifying the entrance of resources and creating an entrepreneur environment.