Global air passenger traffic was down 70% in 2020, compared to 2019, causing deleterious effects throughout the civil aviation sector. By contrast, the space sector fared much better during the pandemic.
A record $5.7bn of investment flowed into space start-ups in 2019, and a similar level of new start-up investment occurred in 2020, despite Covid-19. Growth opportunities for young companies is only a fraction of the $366bn global space economy — 74% of which is dedicated to satellite services, and equipment on the ground and in orbit. The balance of annual space spending comes directly through government budgets, especially in the US, Europe, China, Russia and Japan.
The US is by far the world’s largest spender in the space economy, through NASA and other organisations. In the Americas, the Canadian Space Agency is the next largest — spending one-sixth of what the US does on a per-capita basis — followed by Brazil, Argentina and Mexico with recent notable industry firsts.
Late in 2019, the first fully Mexican-made nanosatellite was launched. In February 2021, Brazil’s first independently designed, built and operated satellite went into orbit. And Canada, a satellite pioneer and one of five original partners in the International Space Station, announced in May that it will develop a robotic lunar rover for launch in 2026, in partnership with NASA. Meanwhile, Costa Rica, Peru, Paraguay and others are advancing their satellite and rocketry programmes. Despite strong regional aspirations, the lack of clear sector strategies in some countries may deter investment.
Universal within the space industry are challenges that can also inhibit growth. Few industries have such a complex array of civilian and military funding sources, public and private actors, legacy and emerging investment locations, intricate webs and multilateral engagements, domestic procurement requirements, politically influenced priorities and international governance. Still, there are investment opportunities abound in the space-for-earth sub-sector and the nascent space-for-space economy. Goods and services produced for use in space, now represent only 5% of total space-related spending.
Whether through government-led programmes, education partner initiatives or corporate commercialisation, ‘space tech’ provides countless investment and expansion opportunities across such diverse fields as satellite miniaturisation, advanced manufacturing, communications, smart fuels and propulsion, hyperspectral data and imaging, transportation and mission management, and much more. Innovation is the prevalent theme for companies in the space sector today, and only the countries that facilitate funding, strategic focus and talent development will earn key future investment opportunities.
Gregg Wassmansdorf is a senior managing director, consulting, at Newmark, a global commercial real estate services firm, and also a member of the Site Selectors Guild.
This article first appeared in the June/July print edition of fDi Intelligence. View a digital edition of the magazine here.