2016 Could Be a Big Year for Space: Is Ottawa Paying Attention?

          By Glen Strom

Is the space business really growing? A group called Space Angels Network says it is.

A December 3rd, 2013 BBC News panel discussion on investing profitably in NewSpace start-ups with Virgin Galactic founder and chairman Richard Branson (on the left, connecting "via satellite") and Space Angels Network managing director Chad Anderson (right). Not shown in the photo was Satellite Applications Catapult CEO Stuart Martin, who also participated in the discussion. To see the entire interview, please click on this link. It's also worth noting that, as outlined in the December 14th, 2015 post, "UK Space Policy Follows US Down the "NewSpace" Path," both the UK and the US have implemented public policy designed to encourage large increases in private sector space activities. These new policies are creating a business environment in which Canadian companies cannot currently compete. Screenshot c/o Space Angels Network.

The organization describes itself this way:

Space Angels Network is a global network for angel investors, offering insider access to the emerging private space industry and sophisticated investment opportunities across diverse market segments, with the expertise and network connections to cultivate stellar returns on investment. We are the largest community of space investors and entrepreneurs in the world.

A January 21, 2016 article at their website, “2015 An Epic Year for the Space Industry,” makes the case that 2015 was a big year for space activities and 2016 will be even better.

The first half of the article is a summary of the events that took place in space in 2015. It’s the second half of the article, starting with the heading, “Record Levels of Investment,” that’s of real interest.

According to the Space Angels website, the network has funded 29 companies during its eight years of existence. These include Astrobotics (presently contracting for private sector Moon missions), Nanoracks (which places small science experiments on board the International Space Station), Planetary Resources (focused on outer space resource gathering) Ursa Space Systems (geospatial imagery) and XCOR Aerospace (currently building the Lynx rocket plane). Co-funders and sponsors include venture capital firms Draper Fisher Jurvetson, Founders Fund, Data Collective (focused around funding data scientists) and First Round Capital. Graphic c/o Space Angels Network.

Here’s a summary of what that part of the article says:

• The compound annual growth rate (CAGR) for commercial space activities between 2012-2015 was 180%.

• In the last 10 years over $20Bln USD of non-governmental money has been invested in commercial space companies.

• In 2015 the level of non-governmental investing in commercial space was $3.3Bln USD, with most of it coming from corporations. A majority of this money went to launch systems and satellites.

• Venture capital and angel investment to space start-ups in 2015 was over $800Mln USD. Companies like Virgin, Qualcomm and Coca Cola invested in space. Venture capital came from Sequoia, Bloomberg Beta, Google Ventures, Bessemer Venture Partners and Lux Capital.

• Acquisitions of space assets in 2015 totaled nearly $4Bln USD.

A July 24, 2015 post, “Space Economy Now $330Bln US Annually, Says Report,” examines the numbers in a report from the Space Foundation, a US based non-profit organization that advocates for the global space industry. They agree that a breakthrough year is likely. The data in the report on European space activities comes from Eurospace, the trade association of the European space industry, which also thinks that way.

The 2015 State of the Satellite Industry Report, a 32-page PDF document produced by the Satellite Industry Association (SIA), shows that the satellite communications area has the most potential in the near term. That’s an area where Canada does well.

Canada’s federal government has made a big deal about promoting technology. When it comes to space, though, so far the only announcement was about Neptec Design Group getting $1.7Mln CDN to design a damage detection system for the International Space Station. This contract had already been announced in November 2015, as outlined in the January 10th, 2016 post “Innovation Minister's Latest Announcement a Rehash of November 2015 Announcement.”

As outlined in the February 5th, 2016 Business Insider post, "A tiny European country just made an unprecedented move in the space mining business," crazy American based entrepreneurs aren't the only ones making large bets on the future of the space industry. As outlined in the article, the tiny country with a well deserved reputation as a tax haven, has followed down the same path as the US  by securing property rights for commercial companies intending to utilize rare and precious resources from asteroids. For some background on the US initiative and why Canada should also follow down this legislative path, it's worth checking out the November 26th, 2015 post, "Say Hello to the New US Commercial Space Launch Competitiveness Act." Screenshot c/o Business Insider.

Commercial space is picking up speed. What should the Canadian government be doing to get us a piece of that action?

If you’re about to say create more projects for space companies, forget it. Canada’s economy is slow, the dollar is down and the government will likely run deficits for a few years. It’s unlikely that they’ll put a lot more money into government space projects.

Here’s what they can do:

• Implement the rest of the 2012 Emerson Aerospace Review as outlined in Volume 2: Reaching Higher: Canada's Interests and Future in Space. It’s a good framework for building the space industry.

• Stabilize the Canadian Space Agency (CSA). As recommended by Emerson, give it a clear mandate and the funding it needs to carry out that mandate.

• Create an environment that helps space companies grow through initiatives like tax breaks and access to financing. 

• Promote the Canadian space industry internationally. The government has been promoting Canadian technology, as Prime Minister Justin Trudeau did at the recent 2016 World Economic Forum (WEF), but more focus on space is needed.

• Create an environment where more young Canadians can get their space dreams off the ground while they’re still in university. Some schools, the University of Waterloo in Ontario (most recently profiled in the September 4th, 2015 post "What Waterloo Engineering Dean Pearl Sullivan Really, Really Wants!") being one example, are doing well at this on their own, but promoting entrepreneurship needs to be done at a national level.

Glen Strom.

If the growth trend in 2015 continues, 2016 will be a strong year for commercial space. Let’s hope the Canadian government is paying attention and puts some effort into promoting our space industry.

Commercial space is the future and we need to carve out our place in it.
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Glen Strom is a freelance writer and editor with a background in business and technical writing. Follow him on Twitter @stromspace for the latest on Canadian space stories.