Two Reports on the Changing Shape of the Space Sector

          by Brian Orlotti

Two space market analysis firms have just released reports describing the continuing transformation in the global space sector; shrinking government space programs contrasting with growing private space initiatives.

On Feb 13th, Paris-based Euroconsult released their report titled, "Profiles of Government Space Programs" stating that budgets for government space programs worldwide have dropped to $72.1Bln USD in 2013 after reaching a peak of $72.9Bln USD in 2012. According to the report, 2013 is the first year since 1995 in which government space programs have entered a global downward trend, a result attributed to both the cyclical nature of program funding as well as government austerity measures due to the global recession.

Despite this, the report’s editor (and Euroconsult COO) Steve Bochinger stated in a press release that there are positive signs, such as the emergence of new leading space nations in addition to a growing number of nations building up their space capabilities. Bochinger went on to say that Euroconsult anticipates government space spending to recover in many nations in the latter part of this decade.

Steve Bochinger.

The Euroconsult report goes on to state that the current global fiscal austerity has forced many nations to be more innovative with their space programs, most notably welcoming wider private sector involvement in areas until recently restricted to government entities. This current transitional period will have far-reaching effects on how governments view their space programs and how private contractors structure their dealings with government.

Some of the Euroconsult reports key points include:

• In 2013, 58 countries invested $10Mln USD or more in space applications and technologies, compared to 53 in 2011 and 37 in 2003. 22 more countries have been identified with plans for space investment.

• The US invested $38.7 Bln USD in its space program (civil and defense) in 2013 confirming the downward trend initiated since the start of the decade. This is an $8.8Bln reduction compared to the peak spending of $47.5Bln in 2009.

• Russia recorded a massive increase of its public investment in space and is the only country after the US to pass the $10Bln USD cap. In the last five years, Russia's investments have accelerated at an impressive average growth of 32% in local currency.

• Another six countries invested over $1 billion: Japan, China, France, Germany, Italy and India, as well as the European Union. China's 8th place ranking for space spending as a ratio of its GDP indicates there is room for investment growth in the future.

• 19 countries recorded over $100Mln in spending: the UK, Canada, Brazil, Spain, South Korea, Belgium, Kazakhstan, the UAE, Argentina, Mexico, Australia, the Netherlands, Switzerland, Turkey, Sweden, Israel, Nigeria, Iran, and Norway.

But Atlanta-based analyst firm SpaceWorks Enterprises, Inc. has also just released a report, titled "2014 Nano / Microsatellite Market Assessment."

The document, focused on the fast growing nano/micro-satellite markets instead of government space agencies, provided a far more optimistic snapshot of space activities. According to the report:

• There are an estimated 410 to 543 nano/micro-satellites (defined as being in the 1-50 kg mass range) globally that will need launches in 2020 (compared to 92 in 2013).

• In the 2014-16 time frame, there are 650 nano/micro-satellites in various stages of planning & development.

• Nano/micro-satellite launches have grown by an average of 37.2% per year since 2009, with an expected 23.8% growth per year over the next 6 years (2014-2020).

• The continued growth of the nano/micro-satellite market shows no signs of abating, which will likely boost the efforts of current players and spur the entry of new ones.     

Brian Orlotti.

Some decry the decline of government space programs as the end of space exploration itself, while others welcome the greater participation of the private sector as a way of making space more efficient and effective.

The the space sector’s transformation isn’t a question of the glass being half-full or half-empty; it is simply changing shape.    
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Brian Orlotti is a Toronto-based IT professional and the treasurer of the Canadian Space Commerce Association (CSCA).