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International Institute for Space Commerce: Responding to the Need for Strategic Thinking in the Commercial Space Sector

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International Institute for Space Commerce: Responding to the Need for Strategic Thinking in the Commercial Space Sector PERSPECTIVE International Institute for Space Commerce: Responding to the Need for Strategic Thinking in the Commercial Space Sector Walter Peeters1,2 and Michael Simpson1,3 (George Washington University, George Mason University, Baker, Eisenhower) and in Europe (e.g., the European Space Policy Institute) 1International Institute for Space Commerce, Douglas, Isle of Man. with a focus on the strategic importance of the space sector mainly from 2International Space University, Illkirch, France. a dual-useperspective.Unfortunately, less emphasis has been placed on 3Secure World Foundation, Broomfield, Colorado. strategic thinking in the context of commercial space activities. More and more activities that were once the province of govern- mental activity are now being taken over gradually by private ini- ABSTRACT tiatives. If we consider exploration, for example, with initiatives such With the growth of the new space economy, the need for a think tank as the Google Lunar X-Prize, we immediately realize that rules dedicated to the study of space commerce facilitators has been iden- and regulations originally developed for a context dominated by tified. Bringing together experts from academia, government, the media, government activity may need a paradigm shift. business, and international and nongovernmental organizations, Inter- The importance of this issue has been particularly evident in the national Space University has employed its extended network of people United States, where the Federal Aviation Administration (FAA) has and resources to help meet this need. As illustrations of just some of the taken a leading role in developing regulations for the burgeoning issues arising in this new space economy, three different challenges are space tourism industry. Working with a mandate to provide protec- illustrated: the rising average age of the space workforce, particularly in tion for uninvolved people in the vicinity of launch sites, and to the traditional spacefaring countries, the macroeconomic changes re- guarantee that consent of space flight passengers is truly ‘‘informed,’’ sulting from the present economic crisis, and the interrelationship of the FAA has also been tasked to facilitate the development of the new entrepreneurial ventures and the regulatory environment. The role of the industry. Its actions thus deserve to be closely studied for insights to International Institute for Space Commerce in studying these and other practices to be continued or avoided as launch operations in other challenges will be outlined, as well as a number of forecasts of potential locations such as Sweden, Singapore, or the UAE come online. trends. Recognizing the need for serious study of the business issues that will impact the private commercial space flight industry, the Isle of INTRODUCTION Man, an autonomous dependency of the British Crown and an im- ith traditional roots in the public sector, space activi- portant player in the new space economy through financing, insur- ties have developed over the last few years into a vi- ance, and leasing operations, invited the International Space able commercial activity supporting the investment of University (ISU) to cooperate in launching a think tank designed W private capital. In its yearly report the satellite in- to explore the emerging commercial character of space activity. dustry (based upon research of the Tauri Group) estimates the com- This think tank has been created and is known as the International mercial space turnover in 2012 at over 189 billion dollars, an increase Institute of Space Commerce (IISC). of 7% compared with 2011,1 still excellent in view of the present economic context. IDENTIFYING THE CHALLENGES This figure is in line with The Space Report figures, estimating A number of challenges are known and can therefore be studied in commercial space sales worldwide in the order of 48% in 2012,2 with advance. Foremost among these is the influence of geopolitical forces the total space market estimated well over 300 billion dollars. It on the evolution of private commercial space ventures. Although the clearly shows the growth of the commercial space sector, presently trend toward private commercial activity is dramatic, it remains that nearly equivalent to the public space market. the space sector is still largely driven by public activities. Figure 1 This rapid growth, which is remarkable in a time that many sectors shows the effect of major public policy initiatives on aggregate space have been suffering strongly from the crash of 2008, shows the solidity expenditure in the United States since 1963. of the sector but also raises a number of questions. In view of the space Given the impact of these factors external to the private market, we sector’s public-oriented roots, strategic studies and thinking on space have sought to take them into account in our attempts to analyze the activities have been mainly focused on this public utility function. international prospects for commercial space ventures over the near Excellent work is done in many institutes both in the United States and medium term. Of immediate importance in this effort will be the 68 NEW SPACE 2014 DOI: 10.1089/space.2013.0033 THINK TANK FOR COMMERCIAL SPACE THE SPACE WORKFORCE Whereas the aging factor of the space workforce is a considerable concern, in particular in the United States, replacement of the workforce by adequate staff is a problem worldwide. In particular, in Wes- tern countries we note for years a declining interest in science and engineering and a resulting reducing number of graduates in these disciplines. This has even led to concerns from a strategic perspective, as expressed inter alia at the 2005 Dwight D. Eisenhower National Security Symposium,4 but is also a concern for future commercial space activities. In a survey done by ISU5 on the European space workforce, it turned out that some 50% of the va- cancies were hard to fill in the space sector because of a lack of candidates with the appropriate skill set. As far as hard skills are concerned, whereas the space sector still searches in the first place for good engi- neering skills, we can also note from Figure 2 that there is an increasing request for a combination of Fig. 1. Public space expenditure in the United States. (Source: PROSPACE: The skills and hence for applicants with more than one American Space Program, 2007.) degree in the sector. In particular, a combination of solid engineering and physics backgrounds with an geopolitical context in which the new ventures evolve. Here we look additional business degree (such as an MBA) is in high demand. to the work done by the OECD working group forecasting the evo- Obviously, an even bigger obstacle seems to be formed by soft lution of world condition over the next two decades, where three skills, also because these are in general not taught in traditional scenarios were developed based upon political and energy-driven (science and engineering) curricula. In particular, communication assumptions3: skills, after analytical thinking (see Fig. 3), are highly in demand and considered as one of the major obstacles in recruitment. ‘‘Smooth sailing’’—based upon the assumption that a global Whereas analytical thinking is an evident prerequisite to succeed world order will be implemented under the benevolent guidance in technical or scientific studies, the other soft skills are less essential of international organizations and where free markets and de- contributors toward earning a degree. Group dynamics and presen- mocracy become gradually the acceptable universal model for tation skills, as an example, can be strongly improved by work- national institutions. shops and feedback sessions, but this is rarely organized in classical . ‘‘Back to the future’’—under this scenario three major economic curricula, even if the needs are recognized. powers will strive to dominate the world (United States, Europe, It is also worth noting that, on the basis of a range-based and China). question, the demographic distribution in the sector in Europe is . ‘‘Stormy weather’’—where strong disagreements between major reasonable (Fig. 4), with some 54% of the employees younger than powers lead to a gradual erosion of international institutions 45 years. and increasing conflicts. The OECD working group ultimately selected the first scenario as INTERNATIONAL SHIFT OF SPACE ACTIVITIES There are many indications that the present financial crisis may their baseline, and in terms of consistency we will do the same in our accelerate the growth of emerging space nations. From a strategic discussion here. perspective, such growth factors may become reality in the next few In a smooth development scenario, we can make reasonable forecasts decennia that analysts are considering not only the next generation based upon incremental continuity of economic factors. The planned of economically powerful countries (BRIC = Brazil, Russia, India, and studies of the aforementioned IISC are projected in coherence with these China) but also already the next emerging group. parameters and therefore assume increasingly global stability. A research team6 identified a new series of countries as the As an illustration, we will describe here three elements under next group of emerging countries, namely (in alphabetic order), consideration for further studies: Bangladesh, Egypt, Indonesia, Iran, Korea, Mexico, Nigeria, Pakistan, . The space workforce Philippines, Turkey, and Vietnam. The selection was done on the . International
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