Building Queensland's Space Economy February 2019 Sky Is Not the Limit
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Sky is not the limit Building Queensland's space economy February 2019 Sky is not the limit Contents Glossary 1 Executive summary 2 1 Introduction 9 2 Defining the space economy 12 3 Global and national context 16 PART ONE | BOTTOM UP ANALYSIS 25 4 Queensland’s space economy 26 5 Queensland’s competitive advantages 35 6 Areas for future growth in Queensland’s space economy 45 PART TWO | TOP DOWN ANALYSIS 50 7 Baseline profile of Queensland’s space economy 51 8 Future scenarios for Queensland’s space economy 59 PART THREE | REFLECTIONS 69 9 Reflections 70 Appendices 74 ii Building Queensland's space economy Appendix A – Capability directory 75 Appendix B – Capability assessment matrix – detail 80 Appendix C – CGE modelling assumptions 88 Appendix D – Short form data capture and capability survey 101 References 112 End notes 115 Contact us 117 Limitation of our work 118 Sky is not the limit Acknowledgement Deloitte Access Economics would like to acknowledge the valuable input provided by businesses, universities and research organisations in Queensland’s space economy through the data capture process and industry forum. Queensland Space Industry Reference Group • Air Vice-Marshal (Ret) Neil Hart AM, Queensland Strategic Defence Advisor - Aerospace (Chair) • Dr Shane Arnott, Director Boeing Phantom Works International • Stu Blackwell, Manager Advanced Communications and Simulation, Northrop Grumman • Dr Kimberley Clayfield, Executive Manager, Space Sciences and Technology, CSIRO • Adam and James Gilmour, Founders, Gilmour Space Technologies • Nick Green, General Manager, Defence and Aerospace, PFi (Products for Industry) • Tammy Halter, Director, Absolute Data Group • Peter Kinne, Regional Director APAC/Australasia, DigitalGlobe • Derek Lockett, Director of Sales Asia Pacific, Honeywell • Peggy MacTavish, Vice President, Civil & Defence Services, Elbit Systems of Australia • Prof Peter Schubel, Executive Director, Institute for Advanced Engineering and Space Sciences, University of Southern Queensland • Prof Michael Smart, Chair of Hypersonic Propulsion, University of Queensland iv Building Queensland's space economy Glossary Acronym Full name ABARES Australian Bureau of Agricultural and Resource Economics and Sciences ABS Australian Bureau of Statistics ADF Australian Defence Force ANZSIC Australian and New Zealand Standard Industrial Classification ATMS Automated Train Management Systems BOM Bureau of Meteorology C- D Cobb-Douglas CDE Constant Differences of Elasticities CES Constant Elasticity of Substitution CGE Computable general equilibrium C-ITS Cooperative intelligent transport systems CNSA China National Space Administration COSSA CSIRO Office of Space Science and Applications CRESH Constant Ratios of Elasticities Substitution, Homothetic CSIRO Commonwealth Scientific and Industrial Research Organisation DAE-RGEM Deloitte Access Economics Regional General Equilibrium Model DoD Department of Defence DSDMIP Department of State Development, Mining, Infrastructure and Planning ELDO European Launcher Development Organisation EO (S) Earth Observation (from Space) ERG Expert Reference Group ESA European Space Agency FTE Full time equivalent GIS Geographic Information System GNSS Global Navigation Satellite Systems GPS Global Positioning System GSP Gross State Product JAXA Japan Aerospace Exploration Agency NASA National Aeronautics and Space Administration NPV Net Present Value OECD Organisation of Economic Co-operation and Development PNT Position, Navigation and Timing PV Present Value SME Small-medium enterprise VR Variable Rate WRE Weapons Research Establishment 1 Sky is not the limit Executive summary Building Queensland's space economy Sky is not the limit This is changing, and changing fast. The The small size of the industry today is Space has always ignited human curiosity recent trend towards decentralisation of actually a strength – organisations across – from the Ancient Mayan’s astronomy; activity out of government and into the Queensland’s space economy are actively to Galileo; NASA landing on the moon; private sector has spurred growth in the collaborating with each other, building and now the likes of SpaceX and a new commercial components of the supply specialised research capability to support wave of private sector investment in chain; the global space economy today is commercial organisations and building space capability. The continuous growth characterised by an increasing number commercial organisations out of specialised in knowledge and technical capability has of private organisations and investors, research capability. This presents a unique propelled our collective understanding of working alongside space agencies to opportunity for Queensland to develop space, and what it can be used for. achieve the aspirational goals of the a space ecosystem, where upstream and global space agenda. This has opened up downstream players have a co-ordinated Today, space is an economic opportunity, opportunities for countries like Australia approach to competing in the global as well as an intellectual and spiritual to participate in, and benefit from, the supply chain. curiosity. The young minds excited by space economy. rocket launches and people on the moon The future of Queensland’s space industry have become global leaders in science, Our role in the New Space era is strong and there are opportunities to technology, engineering and mathematics; The new national agenda is clear – Australia be had. However, this is an industry where producing high value added, knowledge can, and should, play a role in the growth connections matter, where reputations intensive goods and services traded in a of the global space economy. This value matter and where entrenched competitive global supply chain. is derivative of the inherent importance advantages arise as the result of decades of space as an economic sector, but of investment in specialised capability – Daily, the global space economy provides more importantly, the spillovers of space this is not an industry that can be built essential data and information for each related technology into other key sectors overnight. Queensland is fortunate and every one of us. From the internet and of the economy. With proven expertise that decisions made decades ago have personal banking, to the navigation system in niche areas of the global supply chain, created the conditions for an industry ripe we use in our cars or on our phones. the Australian industry has the capability for growth. The question now is what Space is also responsible for the necessary to capitalise on this growth potential. The decisions do we need to make today information that enables weather Australian Government’s space industry to ensure that these opportunities and monitoring, emergency planning and Expert Reference Group set an ambitious ambitions are realised, for the benefit management; and serves as the foundation and exciting goal for the Australian of Queensland? for generations of researchers, scientists space community to triple the size of the Queensland’s niche, but globally and mathematicians that have innovated Australian space economy from the 2015- competitive space economy economies and societies to higher living 16 estimate of $3.94 billion, to $10-$12 standards and technological progress. billion by 2030. This will create an industry With the global growth prospects strong, that is roughly one-third the size of a renewed national focus, and an ambitious The potential for spillovers from space Australia’s current agricultural output, and local industry, the space economy is an technology and research endeavours are will stimulate investment along the supply area that warrants understanding, yet broadening in scope, and becoming richer chain, from research and development there is not an existing information base in their application. Valued at US$345 through to commercialisation and export. in Queensland. billion (in 2016), the global space economy is sizeable and growing. For much of its The Queensland space economy has grand It is in this context that Deloitte Access history, the space sector has typically been ambitions of its own – ambitions to grow, Economics, with support from the an industry led, financed and managed by and to be globally recognised. But, these Department of State Development, government. International space agencies ambitions are grounded in the reality that Manufacturing, Infrastructure and have dominated the agenda and driven Queensland is a small player in a global Planning, developed a data capture strategy and goal setting internally. The supply chain. The aim is not to compete process to map out the current state of high entry costs and risks associated with with the entrenched agglomerations in the play in Queensland’s space economy. the space industry of old has necessitated US, China and Europe; the aim is to considerable government involvement. continue to develop niche, globally competitive, high value added goods and services that can be exported to the world. 3 While still in its infancy, the resultant • Space activity is highly • Queensland’s existing economic Queensland Space Economy Capability interdependent; meaning strengths, such as Mining, Directory provides insights into the size, relationships are critical to success. Manufacturing and Research and scope and capability of organisations While organisations in Queensland’s Development are a solid industry currently operating in Queensland – either space economy are highly collaborative, base