The Challenge of Future Space Systems and Services in Europe: Industrial Competitiveness Without a Level Playing Field

Abstract

This article reviews the challenges and opportunities of market growth for space applications. Up to now, the development of space systems has been mainly driven by global or regional needs or sovereignty missions. The global dimension of satellites fits perfectly with the needs of customers requiring a global coverage. Meteorology, operational oceanography, TV broadcast, and global navigation systems are typical examples. In those domains, either the needs are global or the communities of users are well structured. Main customers (space agencies and governments) were able until now to invest in a proprietary capacity or to fund a significant part of the infrastructure. New elements shape today's landscape: the budgetary constraints affecting many countries weaken this model and rekindle the competition between the “usual suspects.” New players from new countries are emerging. At the same time, the new operational needs are more and more challenging (e.g., real-time and persistent surveillance of wide areas) and require dedicated capacities, while the users' demand is fragmented and spread over the world. Meeting the performance requirements will justify more and more a collective approach with capacity sharing. So far, collective solutions have been hampered by the reluctance of governments to share exclusive and sovereign responsibilities. The market of space applications is thus facing a general challenge regarding future growth: cost-effective solutions can be developed and operated only if the user base is consolidated. The comparison between the European and the U.S. “ecosystems” is very instructive: U.S. institutional and defense markets have provided until now key competitive advantages in the worldwide competition. Recent institutional initiatives at the European level (Copernicus, Galileo) balance this situation and improve the competitiveness of the European space industry. This evolution confirms the paramount importance of a strong institutional support, even for activities that are considered as “purely commercial” markets (e.g., satcoms). Nevertheless, a level playing field is still missing. Beyond technical issues, this article summarizes the findings of recent studies on the business cases and governance of space systems. Assessing examples in Europe and worldwide, the article analyzes the success factors, relying on a smart combination between institutional and commercial assets, dedicated systems and general purpose systems, and national versus European or international capacities, with a clear governance and mandate for the coordinating entities. Addressing fragmented markets will likely be the main growth opportunity in the coming years, while usual domains are becoming renewal markets. There is an opportunity for the services activity. Nevertheless, the main focus of this analysis is space infrastructure and more specifically the satellites needed for Earth observation, telecommunications, and navigation applications. The service dimension is addressed through its potential impact on the long-term sustainability of space systems. As already demonstrated for meteorology (with the cooperation between Eumetsat and NOAA on the Joint Polar System) and oceanography (with the Topex-Poseidon and Jason family), international cooperation plays definitely a major role. The successful implementation of large capacities will depend on the cooperation between two, three, or more stakeholders and is always a lengthy process. In conclusion, the article emphasizes the importance of raising awareness and promoting best practices.