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New Space

Europe should shape the future of space

Space is one of today’s major growth industries. To name just one example: The telecommunications sector generates revenue of over 100 billion Euros every year – thanks to advances in satellite technology including global coverage. The bottom line: Europe should become a driving force in the industry or risk missing out. For this to happen, support from European policymakers remains crucial despite the involvement of private actors in the space sector.

Graphic New Space

New Space. What is it? “New space” refers to the recent commercialisation of the space sector. While the state used to have a monopoly over the sector, private actors now play an increasingly important role, most notably companies like SpaceX and the so-called “GAFAs” (Google, Apple, Facebook and Amazon). Furthermore, digital applications are dominated by ever fewer companies, most of which are based in the United States. This does not mean the U.S. is reducing its support to the sector: Since 2010 NASA has increased its expenditures to private firms in an effort to save money on systems and services, such as maintenance of ISS. SpaceX alone received about $2.6 billion in 2014 from NASA. These expenditures and major contracts had a decisive impact on the company’s bottom line.

 

These changes have unleashed new opportunities – but only if we choose to embrace them. Airbus has reacted to these developments and is now one of the key players. Take the European launcher Ariane 6: Costs per launch are being cut nearly in half compared to the predecessor, thanks to a new private organisational structure and the use of cutting-edge innovations such as 3D printing and laser surface treatments. And OneWeb, a project for global high-speed internet access: Airbus is building 900 communication satellites – more than all satellites built to date. Mass production and innovations like these can have a direct positive impact on Europe’s economy and society.

EU needs to play a role

Despite the active involvement of private firms in New Space, the EU should continue to play a key role; indeed, it should define its needs while leaving implementation to industry. This is because private and public actors pursue different goals: Industry bases investments mainly on market potential and return on investment. The EU, however, has its own strategic interests, such as prosperity, connectivity, sustainability and security. New Space opens up opportunities for the EU to benefit from innovative products, services and processes that create added-value in these areas.

 

Furthermore, public intervention can distort markets: for example, private companies in the United States have been awarded contracts from NASA and DARPA totalling billions of dollars. These contracts are often restricted to US firms, however, which reduces competition and leads to higher revenue than companies would likely have generated in the private sector. That is why Europe must focus on its own interests and carefully monitor conditions to ensure a level playing field for European companies.

European policymakers need to support space initiatives

In its Space Strategy for Europe, the European Union acknowledges that innovative industrial processes are revolutionizing the sector and can attract new companies and entrepreneurs. In order for Europe to keep up with this trend, its institutions must open up new sources of financing, create new business models and foster conditions that allow an entrepreneurial ecosystem to emerge. At the same time, however, it is vital that policymakers ensure independent, guaranteed European access to space and continue their support of traditional European space programmes, such as those for navigation (Galileo and EGNOS), Earth observation (Copernicus), secure satellite communications (GovSatcom), and space surveillance and tracking (SST).

 

New Space is full of opportunities. But only with continuous support from the EU – both in terms of policy and budget – can Europe pursue its strategic interests and preserve its autonomy in the sector.

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