Canadian Space Industry Shrinks While International Markets Grow!

          by Chuck Black

A report released Tuesday through the Canadian Space Agency (CSA), strongly suggests that Canada can no longer "punch above its weight" in the fast growing, international commercial space marketplace.

According to the 2012 State of the Canadian Space Sector Report, the 140 companies and organizations listed in the Canadian Space Directory generated $3.327Bln CDN in revenue in 2012, down from $3.483Bln in 2011.

Overall, Canadian domestic revenues decreased by 4.1% and Canadian space industry exports decreased by 4.9% during the period covered by the report.

But another report, released eight months earlier by a US based advocacy group called the Space Foundation, concluded that there was an overall 6.5% increase in international space focused products and services revenue for 2012, and a larger 11% increase in revenues generated from commercial infrastructure and support industries during the same period.

In essence, while the overall international markets for space focused products were growing in 2012, the Canadian share of those revenues was shrinking, both as a percentage of the overall market and in absolute terms.

As outlined in the April 9th, 2013 post "Global Space Economy Now $304B Annually: 2013 Space Report," the 2013 Space Report, an annual publication from the Space Foundation, a US based advocacy and research group, reported that, "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."

It's well known that Canadian companies, focused on robotics, imaging, science experiments and telecommunications technologies, typically possess no spaceports or "commercial" infrastructure of their own. Perhaps that could account for the differences between the domestic Canadian market in 2012 and the demonstrated international opportunities. Maybe we're just poorly positioned to take advantage of these new areas of growth.

Or maybe not. After all, this isn't the first time that Canadian capabilities in this area have been questioned.

As outlined in the September 11th, 2011 post "Canadian Space Competitiveness Falls Behind India Reports International Study," the 2011 Futron Space Competitiveness Index, a yearly ranking of the underlying government, human capital and industry drivers of aerospace competitiveness, dropped its estimate of Canadian competitiveness from sixth to seventh behind India. The index cited government delays with the development of policy related to what was then called a "long-term space plan" (it's now called a "10 year plan," but still hasn't been released), plus an erosion of Canadian robotics expertise as the drivers for its decision. 

The index further stated that Canada was also losing ground to other big space and aerospace players and was being challenged hard by Brazil, China, Israel, Japan and South Korea.

But on the upside, the new CSA report did include a forward from CSA president Walt Natynczyk and at least one positive component. The space industry has recovered almost 500 full time jobs since 2011, for a total of 7993, after losing 792 positions in the 2010 report.

What would Chris Hadfield say about that!

A "Gulliver's Travel's" Overview of Current US Space Policy Advocates

It's worth noting that the beginnings of a substantive debate on US space policy is starting to percolate up through to the "mass media" and into official "publications of record."

Robert Zubrin. Defining the US debate?

Recent examples include the Wall Street Journal (where Mars Society advocate and author Robert Zubrin wrote the May 14th, 2011 editorial "How We Can Fly to Mars in This Decade—And on the Cheap") and the Washington Times (where Zubrin followed up with the May 24th, 2011 editorial "Zubrin: Treating Space Like the American West").

Of course, the best debate is presently coming out of Fortune Magazine where Lexington Institute chief operating officer and Lockheed Martin consultant Loren Thompson is trading barbs and insults with Robert Block, the VP of corporate communications for Lockheed Martin competitor SpaceX in articles like the May 31st, 2011 "The Case Against Space-X, Part II" and the follow-on June 3rd, 2011 reply "SpaceX: Loren Thompson’s Deceit."

The passion of the debate in Fortune is very reminiscent (and just as funny) as the passion exhibited by comedians Jane Curtain and Dan Ackroyd when discussing atomic power in this classic Weekend Update segment from Saturday Night Live.



These debates seem to have resulted from confusion at the US National Aeronautics and Space Administration (NASA) as to it's proper role now that the shuttle program is winding down.

But the real policy discussions aren't coming from NASA (which is simply a government agency focused on implementing decisions made by others), the Obama administration, space scientists, the US Congress or even from space focused business experts.

The real debate is coming from a series of space advocacy groups and online space focused news services where people who've already "drank the kool-aid" and "bought the t-shirt" are getting together to complain, disagree, debate, advocate, exchange information and eventually combine the evolving consensus into a useful, well though out series of talking points which is only then picked up by the traditional mass media.

NASA deputy administrator Lori Garver. Until 1998, she was the Executive Director of the National Space Society, a nonprofit 501(c)(3) organization specializing in space advocacy.

The process is perilously close to peer review and the end result has been far sturdier than anything any government agency, endowed university or private sector think-tank operating in a traditional manner has been able to generate.

The best part is that most of these sites are open to the pubic and welcome input. They would include (but are certainly not limited to) the following sites:

• 21st Century Waves - Argues strongly for a "new Apollo style space age in less than five years based on macroeconomic data and global trends." This site provides much of the essential philosophical underpinning for the other sites and their discussions.

• Centauri Dreams - It's publisher is the Tau Zero Foundation, a private nonprofit (501c3) corporation, supported mainly through philanthropic donations to seek out and support astronomy and breakthrough space propulsion technologies. Anyone looking to build the USS Enterprise (the shuttle or the starship), needs to start here for the science (and then check out Atomic Rockets for the engineering).

Ken Davidian.

• The Commercial Space Wiki - This site is published, edited and administered by Ken Davidian, the Director of Research at the Federal Aviation Administration (FAA) Office of Commercial Space Transportation to serve as an “open and public forum” focused on topics of interest to the NASA based ESMD Commercial Development Team, participants at the 2nd Next Generation Exploration Conference, interested university students and those belonging to the various American Institute of Aeronautics and Astronautics (AIAA) student chapters, participants in the AIAA Commercial Space Group, NASA class alumni and other interested groups. As such, it's a fascinating public window into the perceptions and capabilities of the current aerospace industry.  

• Hobby Space News - This aggregation website, edited by Dr. Clark S. Lindsey, focuses on reaching out “to members of the general public who are interested in space but don't actively pursue that interest.” The recent plans for the interplanetary Nautilus-X spaceship as described in the February 14th, 2011 Popular Science magazine article "New NASA Designs for a Reusable Manned Deep-Space Craft, Nautilus-X" essentially originated on this site. So if it's a spaceship or something related to space hardware or activities, then it's likely already been described and assessed here.

Rob McEwen (the Chairman of US Gold Corporation) with movie director James Cameron, Peter Diamandis (the CEO of the X-Prize Foundation), Elon Musk (the CEO of Space-X) and Jim Gianopulos (the CEO of Fox Filmed Entertainment) in October 2010.

• The Mars Society - This is an international space advocacy non-profit organization dedicated to promoting the human exploration and settlement of the planet Mars. It was founded by Robert Zubrin and others in 1998 and has attracted the support of notable science fiction writers and filmmakers, including Kim Stanley Robinson and James Cameron. Recent rumors spread through mainstream news articles like the June 6th, 2011 CNBC Cosmic Log post "Avatar director targets spaceflight" suggest that Cameron could be intending a flyby of the Moon within the next few years.

George Whitesides.

• The National Space Society (NSS) - Is another international nonprofit 501(c)(3), educational, and scientific organization specializing in space advocacy. The Society publishes Ad Astra Magazine and maintains an active global network of volunteers and local chapters. The society also hosts an annual International Space Development Conference (ISDC) in major cities and venues throughout the US. NSS Executive Directors have included George T. Whitesides (who was chief of staff to NASA administrator Charles Bolden and is now CEO of Virgin Galactic) and current NASA deputy administrator Lori Garver. NSS supporters include astronauts Buzz Aldrin, Michael Collins, Frank Borman, Jim Lovell, John Glenn, Harrison Schmitt, Gerald Carr, William Pogue and Canadian astronaut Kenneth Money, writers C. J. Cherryh and Ben Bova, actors and entertainers Tom Hanks, Tom Cruise, Lance Bass, Nichelle Nichols and Bruce Boxleitner, scientists Dr. Alan Binder, Dr. K. Eric Drexler, Dr. David Criswell, and even Maria von Braun (the still living widow of rocketry pioneer Wernher von Braun).  

• The NewsSpace News - This is the house organ of the Space Frontier Foundation (SFF), yet another 501(c)(3) organization specializing in space advocacy. The SFF also has strong and active Linked-In groups where people exchange ideas and opinions.

• The Secure World Foundation - A private, endowed foundation dedicated to maintaining the "secure and sustainable" use of space. The foundation also acts as funding organization and publisher for a variety of publications and news services including the Space Report, the Space Show with Dr. David Livingston and the Space Security Index.

Jeff Foust.

• The Space Review - Edited by Jeff Foust, a senior analyst for the Futron Corporation, who uses the site to develop research and as an indicator of expertise for his company. The site focuses on in-depth articles, essays, editorials and reviews on a wide range of space related topics. Foust also publishes smaller articles, breaking news and daily content on Spacetoday.net and space focused political stories on the Space Politics blog.

Gulliver discovers Laputa (J.J. Grandville).

• The Space Show with Dr. David Livingston - An online radio show focused on space commerce, tourism and other related subjects. According to Livingston, as quoted in the March 18th, 2005 Space.com article titled "The Space Show Prepares to Turn Four" the vision of the show is "for space to be like any other place we choose to visit, work in, or call home. It should be just another destination, like Tahiti, Hawaii, or any other location available to us now. When this vision becomes reality, we will be space-faring in our culture."

All in all, it's a listing of people, organizations and websites worthy of Jonathon Swift and Gulliver's Travels, especially once you get to know them.

And if you'd like to do that, it might be best to take a look at the list of upcoming space focused conferences, events and activities that are helpful in connecting the individuals and communities discussed in this article.

It will certainly be interesting to see the consensus these online publications, associations and individuals build over the next few years and how they continue to influence NASA and international space policy.

COMMENTS:

From: Bruce Cordell (21st Century Waves).

Hi Chuck,

Thanks for mentioning 21stCenturyWaves.com in your post.

Editors Note: I'm still having trouble posting comments but if there is something you'd like to comment on, I'm posting comments manually so don't be shy. Send your questions, queries, concerns and comments to mr.chuck.black@gmail.com.

Satellite Market "Remarkably Unaffected" by Global Economic Crisis

According to the article "Space markets post strong growth, defy economic crisis" which was posted yesterday on the SpaceFlight Now web page, markets for commercial communications satellites, Earth observation spacecraft and their launchers are all "remarkably unaffected by the global economic crisis" and continue to soar ever higher with yearly double digit growth.

The article is based on recent report from a variety of sources, including consulting firms Northern Sky Research, Euroconsult, Futron Corporation and Forecast International and include assessments of commercial satellite supply and demand plus growth in the world market for expendable launch vehicles, both of which are expected to continue along their existing strong growth trajectory for at least next several years.

One exception to the generally positive forecast is the "Space Coast" region around Cape Canaveral and the Kennedy Space Center.

According to the article:

...very little of this new business will be launched from the world's foremost spaceport. Without new Presidential direction on human space goals, KSC is seemingly "moon stuck," facing major layoffs as the shuttle program ends.

And the growth is also detouring around Cape Canaveral's expendable boosters because the United Launch Alliance Atlas 5 and Delta 4 largely priced themselves out of the commercial market, now better satisfied by Europe's Ariane, the Russian Proton and Chinese boosters in emerging markets. 

In Canada, although there are no long term goals being set through the Canadian Space Agency (and with the CSA still patiently waiting for President Steve MacLean to release his update on Canadian space policy) local firms are well positioned to either expand into new areas of expertise (like what satellite component builders MDA and COM DEV are doing as described in my recent post "Canadian Component Builders "Moving Up the Food Chain" to Build Complete Satellites") or partner with larger firms (as Nautel has done with Ad Astra Rocket Company).
 
Recently, four commercial satellite services providers (EchoStar, Intelsat, SES and Telesat) formed the Coalition for Competitive Launches, an organization aimed at officially enhancing worldwide competition in the provision of commercial satellite launches but which unofficially seems to be focusing primarily on American launch providers.

Canadian Component Builders "Moving Up the Food Chain" to Build Complete Satellites

According to the recent Space News article "MDA Eyes Telecom Satellite Prime Contractor" by Peter B. de Selding, Canadian space subcontractor, MacDonald, Dettwiler and Associates Ltd. (MDA) is actively competing for contracts to produce complete commercial telecommunications satellites among central Asian nations that were once part of the ex-Soviet Union.

According to MDA CEO Dan Friedman during an investors conference call on October 28th:

We’ve been winning pieces of communications satellites … on other people’s satellites. As we go forward, we see opportunities to sell complete satellites. We’re putting our own communications payload on it, which increases our value added and our margins.

This MDA initiative follows closely on those of Ontario-based COM DEV International to inaugurate its own line of small satellites. According to ComDev CEO John Keeting, as quoted in the article "Today’s investment climate ‘sad,’ COM DEV chief says" the firm is doing as well as anytime in it's history and is investing heavily in new technology and new products even during the present tough economic times. Most recently, an American based ComDev subsidiary won a $7 million USD contract to supply space equipment to the US government.

As these two traditional pillars of the Canadian space industry grow from niche player into prime contractors, a number of newer players are developing innovative components, creating new, knowledge intensive jobs and winning contracts from government and private business all the while generally turning into profitable, skilled replacements for the roles that MDA and COM DEV are hoping to grow out of.

For example, according to the recent SpaceRef.ca article "Canadian Technologies Featured on ESA Proba-2 Mission" three smaller Canadian companies are contributing to the upcoming European Space Agency (ESA) PRoject for OnBoard Autonomy (Proba-2) satellite which contains the following Canadian components.

• New models of reaction wheels from Microsat Systems Canada Inc. (MSCI), a privately held company that was formerly the space division of Dynacon Inc.
• A fibre-sensor system for monitoring temperatures and pressures around the spacecraft, developed by MPB Communications Inc.
• New guidance and navigation computer algorithms developed by NGC Aerospace.

All things considered, Canada is a pretty good place be if you're interested on either creating your own or investing in an already existing aerospace or newspace company, at least according to the recent Futron 2009 Space Competitiveness Index which states that:

• Canada jumped nearly 10 percent in SCI points (a Futron developed measurement of the business climate and how investment is made in the space industry) based on government metrics around both civilian and military space policy, along with a commitment to increase overall funding on space programs.
• Canada ranks well in human capital indicators due to its strong academic network and large number of university aerospace programs and civilian research centers.

The only exception to this and other rather positive reviews of Canada is still the recent Near Earth LLC report on Small Aerospace Companies, which indicates that the Canadian Space Agency (CSA) provides "no dedicated programs to small aerospace firms" at least when compared to organizations like the National Aeronautics and Space Administration (NASA), the National Oceanic and Atmospheric Administration (NOAA) and the European Space Agency (ESA).

The Near Earth Report was first mentioned in my post "Canadian Space Agency Provides "No Dedicated Programs" to Support Small Aerospace Firms" which received quite a bit of comment from readers (most of which was posted under the heading "OK, So Maybe the CSA Does Provide Some Support for Small Aerospace Firms...") but no feedback or serious attempt at rebuttal from the CSA, at least so far

A Two Stage Boost for Odyssey Moon



Google Lunar X-Prize contender Odyssey Moon, a newspace company with a strong Canadian connection, seems poised to benefit from two important announcements today.

The first boost is the announcement by Odyssey Moon Founder and CEO Dr. Robert Richards and Chairman Dr. Ramin Khadem that several well respected international firms have joined the Odyssey Moon "corporate team" to assist with the firms quest to "become the first private company to provide payload and delivery services to the Moon" according to this press release posted on the NASA Commercial Space Watch website.

The new partners are as follows:

• Near Earth LLC, an investment bank specializing in satellite, media and telecom properties.
• Ad agency The Brand Union, a member of the WPP group of companies, one of the six largest marketing and communication companies in the world.
• Aon International Risk Brokers, the worlds only insurance broker dedicated exclusively to the space industry.
• International law firm Milbank, Tweed, Hadley & McCloy LLP, which has a strong telecom and space focused practice.

These new business relationships join existing partnerships with NASA (to develop a robotic lunar lander), MANSAT, the Paragon Space Development Corporation, independent merchant bank Quayle Munro plus Canadian based companies Optech and prime contractor MDA as part of the Odyssey Moon team.

The press release also announced the addition of veteran investment banker Carol Goldstein to the Odyssey Moon executive. With 25 years experience on Wall Street financing commercial satellite and telecommunication projects, Ms. Goldstein will focus on fundraising activities.

These items cannot help but be perceived as beneficial to Odyssey Moon and a solid base for consolidation of the business structure preliminary to moving forward with the actual hardware development.

And this is only their first boost of the day.

The second boost is another press release, also available on the NASA Commercial Space Watch website from the X-Prize Foundation. It promotes a recent study by the Futron Corporation, a well respected aerospace consultancy which predicts that companies such as those competing for the Google Lunar X-Prize "will be able to address a market in excess of $1 billion over the course of the next decade."

According to the press release, the study:

"...involved a detailed examination of the 19 teams already registered in the competition, as well as a robust analysis of potential lines of business, identified six key market areas: hardware sales to the worldwide government sector, services provided to the government sector, products provided to the commercial sector, entertainment, sponsorship, and technology sales and licensing.

Taken together, the study projects the value of these markets to be between $1 - $1.56 billion within the next decade. Additionally, some Google Lunar X PRIZE competitors have set their sights on additional market sectors that fell outside of the scope of the Futron report, which could result in an even higher total market size."

Futron has also written well recieved white papers and reports on space tourism, and the satellite industry in the past so this second boost of the day should go a long way to simplifying Ms. Goldsteins new job at Odyssey Moon, which is to raise money for their Google Lunar X-Prize attempt.