by Brian Orlotti
Private sector space activity is seeing unprecedented growth while government space is on the downswing, says a comprehensive new report.
On April 2nd, the Space Foundation, a U.S.-based advocacy and research group, released its 3rd annual Space Report, as part of the lead up to the 29th National Space Symposium, being held in Colorado Springs, CO from April 8th - 11th.
The report was created in conjunction with aerospace consulting firm Futron Corporation to research and analyze government and industry trends in global space activity and includes a stock market analysis from ISDR Consulting LLC, a firm specializing in the space and technology sectors.
The report’s key findings include:
- The global space economy grew to $304.31 billion in commercial revenue and government budgets in 2012, reflecting growth of 6.7 percent from the 2011 total of $285.33 billion. Commercial activity, space products and services and commercial infrastructure, drove much of this increase. From 2007 through 2012, the total has grown by 37 percent.
- Commercial space products and services revenue increased 6.5 percent since 2011, and commercial infrastructure and support industries increased by 11 percent.
- Government spending increased by 1.3 percent in 2012, although changes varied significantly from country to country, with India, Russia and Brazil increasing budgets by more than 20 percent, while other nations, including several in Europe, experienced declines of 25 percent or more.
- The global space economy grew by nearly 7% in 2012, reaching a new record of $304.31 billion. As in previous years, the vast majority of this growth was in the commercial sector, which now constitutes nearly three-quarters of the space economy, with government spending making up the rest.
- Commercial space products and services such as broadcasting, communications, and Earth observation made up the largest portion of the space economy, growing by 6.5% in 2012.
The commercial space industry has sustained a healthy growth rate, far surpassing increases in government spending. Wealthy individuals and private equity firms have stepped up to show their interest in the space sector by investing in existing firms and starting new ones. If government austerity measures continue to reduce funding for national and international space programs, commercial interests will likely play an even larger role in the coming years. In addition to the known benefits of space activity, this wave of commercial activity could potentially generate unexpected benefits that reward early-stage participants.
Overall government investment in space saw negligible growth in 2012, increasing by slightly more than 1% from 2011 levels. This growth was not evenly distributed—some countries decreased their budgets as projects ended and others increased their budgets and announced new initiatives for the years ahead. The U.S. space budget remains the largest single segment of global government spending, although it grew by only 1.4% in 2012. By contrast, several smaller programs received sizable increases—budgets grew by 27% in Brazil, 30% in Russia, and 51% in India. Other countries, such as Canada and Italy, decreased their levels of investment in space during the year. Within the space sector, mergers and acquisitions remain a useful tool for companies to position themselves for anticipated changes in government spending.
In the United States, the size of the space workforce decreased by 4% from 2010 to 2011 (the most recent data available from the U.S. Bureau of Labor Statistics). This was the largest single-year decline in the previous decade and it continued a five-year downward trend that began in 2006. The end of the Space Shuttle Program in 2011 was a major factor, causing the loss of more than 7,000 jobs in Florida alone. For those remaining in the space workforce, the news is somewhat better: U.S. space industry salaries have continued to grow, with the average space salary remaining more than double the average salary for the private sector as a whole.
Elsewhere in the world, the space workforce is increasing, in some cases recovering from previous downturns. The European workforce has grown by 20% since 2006, returning to levels seen at the beginning of the decade. Japan’s space industry reached its highest level in the past 10 years, growing by more than 7% in 2011 alone.
Economic conditions in some countries with developed space programs have led to budget restrictions, making it more difficult to develop and maintain space infrastructure. Space industry leaders are using different methods to overcome this challenge, such as improving cost management, pursuing more international partnerships, examining alternative hardware and flight formations, and harnessing commercial markets and practices.
The data outlined in the 2013 Space Report points toward a fundamental shift in both culture and economics for the space sector. With the tide of government programs ebbing and that of the private sector growing stronger, greater incentives for innovation and collaboration exist than ever before. In the coming age, the risks of space will remain, but the rewards could prove even greater.
For a copy of The 2013 Space Report, please visit: http://www.spacefoundation.org/programs/research-and-analysis/space-report.