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 from which growth in upstream as organisations located in Queensland or growth will require increased activities can occur. Queensland also as organisations with a strong Queensland representation of Queensland’s has large potential end-user industries presence. It provides the platform for capabilities and competitive advantages that can benefit from growth in space the development of a space ecosystem on an international platform to remain enabled services and applications. which can accelerate the development of relevant in the commercially driven New •• Accordingly, there exists substantial Queensland’s space industry. Space environment. areas of Queensland’s existing Queensland’s The capability review has provided several • competitive advantages industry that can support supply to which key insights into Queensland’s space lie in its geographic location upstream space related organisations provides unique opportunities for space industry and ecosystem: and drive demand for data and analytics systems, launch activities, ground systems supported by downstream space enabled •• Where there exists momentum across and space enabled services. This has services. the space supply chain, organisations fostered pockets of niche capability whose core business is space related across the space supply chain created by Figure i introduces the sub-sectors of are drawing on transferrable skills a small, yet highly specialised community. the space economy and the number of and expertise from other areas of the Evidence of this is particularly poignant in organisations operating in each. Queensland industry/economy to achieve the Research and Development sub- their growth aspirations. sector in Queensland that has grown •• Organisations that do not consider space from sustained long-term investment by their core business are operating in Queensland universities. However, industries with transferrable skills and Queensland's geographic location is not expertise such as Defence (aerospace/ currently being exploited to its full aviation), Mining, Manufacturing and potential; a lack of the respective physical Research and Development. infrastructure in the launch activities and ground systems sub-sectors may hinder growth upstream.

Figure i. Number of businesses in space economy sub-sectors

16 6 5 6 8 4 2 12

Space Launch Ground Space Ancillary Research & Education & Other systems activities systems enabled services development training services

Space systems Designing, building, manufacturing and operating components and systems based in space

Designing, building, manufacturing and operating equipment and services related Launch activities to the launch of space systems

Ground systems Designing, building, manufacturing and operating ground systems

Designing, building, manufacturing and operating equipment, services or applications Space enabled services that require data or other services from space-based systems or components

Ancillary services Professional services to support space-based actvities

Research & development Space related research & development

Education & training Space education and training

4 Building Queensland's space economy

Looking forward, the combination of Moreover, the adoption of space enabled Over the next two decades, under a current competitive advantages and services by other Queensland industries medium growth scenario the industry global growth opportunities presents was revealed as an area for – potentially could contribute $1.3 billion in value a number of areas for future growth in large – growth, with economic dividends added to Queensland’s economy and Queensland’s space economy. While across the economy. This potential is employ around 5,000 FTEs – this is the intention was not to identify specific explored in the future growth scenarios equivalent to about one quarter of the sub-sector opportunities – this is for modelling (overleaf). value added by today’s information, media the industry to decide – there are many and telecommunications industry in commercial opportunities for Queensland Economic profile of Queensland’s Queensland. organisations with the right capabilities and space economy networks. The broad areas for growth (as Where the Queensland Space Economy Given uncertainty about future conditions depicted in Figure ii) centre on: Capability Directory provides a bottom up in the global space industry – and global economy more generally – two additional •• Connecting Queensland’s organisations profile of the Queensland space economy, scenarios have also been developed. The to the global space economy, which is set a top down profile has been developed conservative growth scenario puts the for sustained growth in order to estimate the economic contribution of the space industry in Queensland space industry at around $1.1 existing capability to •• Strengthening Queensland today and over the next billion in value added and 4,000 FTEs, while ensure that our current areas of niche two decades. This approach ‘carves out’ the high growth scenario projects value expertise are world class and positioned the space industry from the broader added of $1.7 billion in value added and for growth Queensland economy.1 6,000 FTEs. •• Experimenting through a continued The conservative, medium and high focus on our deep – albeit niche – Today, the Queensland space industry growth scenarios have been developed expertise in research and development directly employs around 2,000 full time equivalent jobs (FTEs) and contributes to establish potential growth paths for current strengths in •• Leveraging half a billion dollars in value added Queensland’s space industry. The medium the space economy, and broader to Queensland’s economy (2018-19). growth scenario represents the base strengths such as advanced This is equivalent to about 4.4% of case for the modelling. manufacturing; to move into new areas Queensland’s agriculture industry or 2.4% of the space economy. of Queensland’s manufacturing industry (in value added terms).

Figure ii. Areas for future growth in Queensland’s space economy

Connecting Experimenting Fostering international networks Continuing to invest in R&D 01 to seize growth opportunities 03

Strenghthening Leveraging Building on our existing space capability Drawing on our broader economic 02 04 strengths to grow space related capability

Adopting Realising the application of space technology across the Queensland economy

5 2019

In the production of space related goods and services, the industry directly:

Employs approximately 2,000 FTEs

Generates $760 million in revenue

Generates $500 million in value added (the direct economic contribution).

In the production of space related goods and services, the industry directly:

Conservative growth Medium growth (base case) High growth

Employs approximately Employs approximately Employs approximately 4,000 FTEs 5,000 FTEs 6,000 FTEs

Generates $1.7 billion Generates $2.0 billion Generates $2.7 billion in revenue in revenue in revenue

Generates $1.1 billion Generates $1.3 billion Generates $1.7 billion in value added in value added in value added

2036

Potential future scenarios for Introducing the scenarios •• Scenario 1 is triggered by a step-change Queensland’s space economy Where the base economic contribution increase in the adoption of space enabled In addition to the baseline economic focuses on the ‘core’ of the space industry, services by industries in Queensland that profile of Queensland’s space industry, two of the three scenarios take a can significantly benefit from the earth three scenarios have been developed to broader perspective on the potential observation and positioning capabilities paint a picture about what’s possible for economic dividends to Queensland from of the space industry; growth in the wider space economy – space in Queensland. Analysis of these •• Scenario 2, like scenario 1, is triggered by scenarios has been conducted using the namely through the adoption of space a step-change increase in the adoption previously established medium growth enabled services by Queensland’s of space enabled services, albeit under (i.e. agriculture, scenario as the base case (or business as powerhouse industries more conservative assumptions. The mining, transport, construction, usual). Therefore, subsequent economic purpose of this scenario is to provide telecommunications and utilities). All three scenario modelling is measured relative a sensitivity analysis for scenario 1 scenarios are measured incrementally to to the medium growth scenario, or to provide an ‘order of magnitude’ what would already have happened in the base case. assessment of the potential benefits of base case, or the medium growth scenario. the adoption of space enabled services (and explore the impact of assumptions on the end results).

6 Building Queensland's space economy

The third scenario centres on the For the first two scenarios to come to The modelling indicates that the establishment of space infrastructure in fruition, major changes are required in Queensland economy could increase the launch activities and ground systems the understanding of the value of space (above the base case) by between sub-sectors of Queensland’s space enabled services in industries outside of $3.5 billion and $6 billion (in present economy; such as a rocket launch facility, the ‘core’ space industry, and for the third value terms) over the period 2019 to or a major satellite communications park. scenario to come to fruition, development 2036. By 2036, Queensland’s gross state These capabilities will support of space infrastructure would be required. product (GSP) could grow in the order Queensland's space industry to actively of between $650 million to $1.15 billion participate in the global supply chain. Scenario results above the base case. Launch and ground system capabilities The scenarios are modelled using Deloitte were identified by the industry as potential Access Economics’ Computational General The potential employment generated enablers for future growth – noting the Equilibrium (CGE) model. Each of the three by the activity is estimated to range establishment of a launch facility in scenarios is constructed around from 1,800 to 2,700 full time equivalent Australia would require coordination by the ‘shocks’ – with scenarios 1 and 2 reflecting (FTE) employment (in average annual terms) Australian Space Agency. productivity shocks, while scenario 3 reflects over the period 2019 to 2036. By 2036, a capital shock in Queensland’s space FTE employment could increase in • Scenario 3 is triggered by the industry. The productivity benefits to cumulative terms by between 3,300 and development of space infrastructure. downstream industries (e.g. agriculture, 4,900 FTEs above the base case. mining) are assumed to be additional to By their very nature, scenarios are those that would have implicitly occurred in These results highlight that even under generalised and do not precisely capture all the base case. moderate productivity assumptions, the adoption of space enabled services by aspects of the hypothesised future The two adoption scenarios are reported other industries will deliver economic economic state. None of the scenarios jointly to demonstrate the range of potential dividends for Queensland. presented in this analysis are inevitable, but economic benefits derived from increasing at the same time they are not unrealistic the adoption of space enabled services by and provide us with a meaningful place to key industries in Queensland. start discussions about supporting growth in Queensland’s space economy.

Table ii Summary of economy-wide Table iii Summary of economy-wide impacts for Scenario 3 impacts for Scenarios 1 and 2 (incremental to the base case) (incremental to the base case)

Scenario 1: Scenario 2: Total project Construction phase Operations phase High Moderate (2019-36) (2019-23) (2024-36) productivity productivity

$82 million $9 million $7 million Gross state Gross state $6 billion $3.5 billion (in NPV terms over the (annually on (annually on product product total project) average over the average over the construction phase) operations phase)

24 FTEs 57 FTEs 12 F TEs FTE FTE 4,900 FTEs 3,300 FTEs (annually on average (annually on (annually on employment employment over the total project) average over the average over the construction phase) operations phase)

Source: Deloitte Access Economics Source: Deloitte Access Economics

7 Sky is not the limit

The modelling estimates show that the Technical note: Scenarios 1 and 2 are based In saying that, the global nature of the establishment of space infrastructure on productivity ‘shocks’ to downstream space economy means that it does not in the launch activities and ground industries with the potential to make make sense for Queensland to be actively systems sub-sectors of the industry has greater use of space enabled services pursuing all growth opportunities; rather, the potential to grow Queensland’s GSP (e.g. agriculture and mining). Scenario 3 Queensland is, and will likely always be, by around $82 million over the period is an isolated capital ‘shock’ to the space a small, niche, player in the global space 2019 to 2036, adding 24 FTE jobs. industry and upstream construction economy and this means we need to decide industry due to development of space where we fit in the national and global However, while not directly modelled here, infrastructure (i.e. there are no downstream supply chains. the broader economic value of launch or impacts captured in this scenario). ground system capabilities, whether built The resultant growth will take time. This is in Queensland or elsewhere in Australia, Where to next? not an industry that can be built through is not derived from the construction and short term investments. The space operation of space infrastructure alone. The Queensland space economy is poised economy is built from decades of Value is derived from the ability of existing for, and actively seeking, growth – growth in investment in research, equipment and, organisations to capitalise on the activity, growth in value, growth in people. most importantly, people. The competitive opportunities associated with significant However, the pace of growth is not unique advantages of Queensland’s space space-related infrastructure investments. to Queensland; rather, the sheer volume of economy in 2030, 2050 and beyond, global demand for the commercial activities will be the result of decisions made today. When combined with Queensland’s associated with space is going to benefit Government plays an important role in existing competitive advantages, any region with a competitively positioned shaping the future growth path of this the broader economic value of both space industry. The question for industry. launch and ground system capability Queensland is how fast the local space is the potential for Queensland to industry can expand to meet this demand. What the analysis in this report develop world class launch supply demonstrates is that investments in the chains – i.e. the dynamic effects Today, Queensland has a highly specialised, space economy do have wider benefits generated by deepening scale and but highly competitive, space economy. for Queensland. From space education broadening the scope of the The organisations, research institutions and in schools, to the realisation of economic sub-sectors. This would enhance the individuals that comprise the ‘core’ space value from the commercialisation of development of an advanced industries have world leading expertise and space activities, there are economic manufacturing supply chain, with are already experiencing rapid growth. dividends to be had across the spectrum productivity spill over effects into the However, the small scale of the Queensland of space sub- sectors. state’s other major industries industry means that there is not currently Deloitte Access Economics (e.g. agriculture, mining). sufficient critical mass in many upstream The potential benefits of developing space and downstream industries in the local infrastructure in Queensland or another supply chain to ensure that the space location in Australia, should be weighed economy in Queensland works as a co- against the costs and risks, including ordinated local market. For the Queensland customer and market demand, which are space economy to rapidly scale up to meet beyond the scope of this report. Who global demand, greater depth and key leads and pays for the infrastructure is anchor points are required in the supply also beyond this report’s scope. chain. Queensland needs to support growth in existing capabilities, build out capacity in adjacent areas to current strengths, improve connections within the existing supply chain, leverage untapped local demand from other industries (e.g. agriculture) and continue to invest in the early stages of research and develop- ment. These could be enhanced by space infrastructure which could reduce business and anchor the supply chain by generating demand for products and services.

8 Building Queensland's space economy

1 Introduction

9 1.1 Overview To begin to answer this question, an As part of this review, Deloitte Access Space has always ignited human curiosity understanding of Queensland’s existing Economics has also undertaken economic – from the Ancient Mayan’s astronomy; space industry capability is required. modelling to estimate the current to Galileo; NASA landing on the moon; size of the sector, as well as build an 1.2 This project and now the likes of SpaceX and a new understanding of higher growth scenarios. The Queensland Government released the wave of private sector investment in Queensland Aerospace 10-Year Roadmap 1.2.1 Approach space capability. The continuous growth and Action Plan in June 2018, setting out The approach to undertaking the in knowledge and technical capability has a vision for the future of Queensland’s capability review and economic modelling propelled our collective understanding of aerospace industry. The development of was developed to reflect the unique space, and what it can be used for. space technologies and a broader space and developing nature of Queensland’s With the restriction of space discovery industry is a key part of this plan. space industry and its relatively small and exploration no longer limited to size compared to other established The Department of State Development, government, globally space is becoming Queensland sectors. Manufacturing, Infrastructure and Planning a competitive and high-growth private (DSDMIP) is the Queensland Government’s To both complement and supplement sector. This sector is part of a global lead agency on matters related to the literature and existing research on the space economy which is much more space industry. Australian and global space industry, than just launching rockets. The global several primary research methods were space economy involves all resources Deloitte Access Economics has been employed to document the Queensland and undertakings that provide value to engaged by DSDMIP to perform a capability space industry. human beings in the course of discovering, review of Queensland’s current space understanding and utilising space. industry, and develop an understanding of Table 1.1 describes the primary research the potential for growth in this sector. and analytical approach adopted. Daily, the global space economy provides essential data and information for each and every one of us. From the internet and personal banking, to the navigation system we use in our cars or on our phones. Table 1.1 Primary analysis conducted during this project Space is also responsible for the necessary information that enables weather monitoring, emergency planning and Analysis Description Sample size management; and serves as the foundation for generations of researchers, scientists and mathematicians that have innovated The survey was designed to economies and societies to higher living create an industry capability standards and technological progress. directory and develop a snapshot 59 Industry directory of Queensland’s current space The potential for spillovers from space and snapshot sector. The questions asked for Noting that multiple responses technology and research endeavours survey (survey 1) key information about business from the same organisation were are broadening in scope, and becoming and services, and the scope of merged. richer in their application. For Queensland, activities currently contributing to the state’s natural, competitive and Queensland’s space ecosystem. comparative economic advantages have the potential to position the economy The survey was designed to capitalise on the growth potential in to understand in detail the space. But the question remains – Industry Queensland space ecosystem how can Queensland compete not only capability survey 18 and supply chain – as well as the nationally, but globally? (survey 2) capability of the ecosystem and aspirations for growth.

• Queensland Government Industry consultation occurred • reference group across several channels to Industry capture a diversity of views and •• Industry focus group consultation capabilities. This consultation was •• Site visits to select research facilitated by DSDMIP. institutions and businesses

Source: Deloitte Access Economics

10 Building Queensland's space economy

1.3 Structure of this report OPENING •• Chapter 2 provides the definition of the space economy and presents an economic perspective of the space supply chain. •• Chapter 3 provides an overview of the global and national context, discussing trends in the space economy and the current state of play.

PART ONE | BOTTOM UP ANALYSIS •• Chapter 4 provides a detailed look at the current composition of Queensland’s space economy and is based on the findings of the Queensland Space Economy Capability Directory. It includes an overview of space economy sub-sectors, turnover ranges, employee ranges, exporting activities and composition of organisations where space is the primary industry versus not. •• Chapter 5 provides an overview of the comparative advantages of Queensland’s space economy, drawing on insights gained from industry consultation and the industry capability survey. The assessment of comparative advantages is based on a capability matrix. •• Chapter 6 provides a summary of the key areas for growth in Queensland’s space economy – connecting, strengthening, experimenting, leveraging and adopting.

PART TWO | TOP DOWN ANALYSIS • Chapter 7 provides the estimate of the baseline profile of Queensland’s space economy over the next 20 years, including employment and industry value added. • Chapter 8 provides three potential future scenarios to explore how Queensland’s space economy could look if 1) space enabled services are adopted across Queensland’s economy and 2) space infrastructure in the launch activities and ground systems sub-sectors of the industry where established in Queensland.

PART THREE | REFLECTIONS •• Chapter 9 provides the key reflections on the capability of the Queensland space economy and the future path of the industry, including the role for government.

11 Sky is not the limit

2 Defining the space economy

12 Building Queensland's space economy

2.1 Overview For example, while Uber relies heavily on "The full range of activities and the use From the aspirational goal of landing a data provided by Global Navigation Satellite of resources that create and provide man on the moon, to the exploration of Systems, it would not be appropriate to value and benefits to human beings in our solar system with satellite technology, consider the firm as having space capability. the course of exploring, understanding, the search for habitable planets and asteroid managing and utilising space. Hence, As such, this chapter commences by mining; the space industry has developed it includes all public and private actors defining the space economy – where are rapidly over the last 60 years. Countries involved in developing, providing and the boundaries of the space economy and the world over have exhibited an enduring using space-related products and what are the sub-sectors that comprise the commitment to space exploration, which has services, ranging from research and space economy? pushed related fields of expertise beyond development, the manufacture and use of space infrastructure (ground their limits. Adequately acknowledging the Importantly for this report, an economic stations, launch vehicles and satellites) vast array of upstream and downstream perspective of the space economy is also to space-enabled applications activities related to space is necessary presented. This framework presents the (navigation equipment, satellite phones, to understand the way the research, space economy in terms of its supply chain, meteorological services, etc.) and the technology and skills of the space industry introducing two components of the space scientific knowledge generated by such drive improvements across the economy. economy as those that ‘send into space’ activities. It follows that the Space and those that ‘receive from space’. After decades of centralised control Economy goes well beyond the space of economic activity in space, the scope 2.2 Defining the space economy sector itself, since it also comprises the of activities considered ‘space related’, The Organisation of Economic Co-operation increasingly pervasive and continually has gradually broadened as improvements and Development (OECD) definition of the changing impacts (both quantitative and in technology driven by the traditional ‘space economy’ reflects the traditional qualitative of space-derived products, space sector, have extended to the activities of the space industry, and extends services and knowledge on economy 2 wider economy. However, it is recognised this concept to the broader uses of space and society.” that in order to usefully evaluate the derived technologies and applications. capability of the Queensland space The sub-sectors of the space economy For the purposes of this review, reference are further defined in Figure 2.1. economy, not all organisations should be made to the ‘space economy’ will refer to the considered as having capabilities in space. following OECD definition:

Figure 2.1 Defining sub-sectors in the space economy (count of businesses)

16 6 5 6 8 4 2 12

Space Launch Ground Space Ancillary Research & Education & Other systems activities systems enabled services development training services

Space systems Designing, building, manufacturing and operating components and systems based in space

Designing, building, manufacturing and operating equipment and services related Launch activities to the launch of space systems

Ground systems Designing, building, manufacturing and operating ground systems

Designing, building, manufacturing and operating equipment, services or applications Space enabled services that require data or other services from space-based systems or components

Ancillary services Professional services to support space-based actvities

Research & development Space related research & development

Education & training Space education and training

Source: Deloitte Access Economics 13 The concept of the space economy is a The figure overleaf depicts the two •• Second, there is the part of the space reflection of the industry’s transition to distinct, but interlinked, components economy that receives from space. In ‘New Space’; a model of the space industry of the space economy: the Queensland context, this particularly that has a new structure (increased private •• First, there is the part of the space refers to Global Navigation Satellite actors) and different goals including agility, economy that sends objects into Systems (GNSS), Earth Observation responsiveness, acceptance of risk and space. In the Queensland context, this (EO) and Position, Navigation and 3 (significantly) lower costs. particularly refers to rocket launch, but Timing (PNT). may also include satellites. ––This core is also highly niche, with The evolution of ‘New Space’ also reflects specialist skills in data, imagery and the use and application of technologies ––This core is extremely niche and signals analysis. The outputs of this which were originally designed and used requires highly skilled workers and, core can be supplied from anywhere in for space exploration but have since been typically, sizeable capital investments. the world with a data cable. repurposed for alternative uses. The use of Due to the nature of the goods and ––The supply chain impacts for this part the term ‘space industry’ will therefore refer services produced, this component is of the space economy in Queensland to the core of traditional space activities relatively location-specific, meaning are in the downstream industries that such as the research, design, manufacture that once this core is established in purchase the outputs of the core, such and construction of infrastructure and Queensland (through capital, know- as agriculture and mining. technology that is destined for space, or to how and technological investments), it ––The research in this part of the supply monitor activities in space. is more likely to be fixed in location over the short to medium term. chain focuses on areas such as 2.3 An economic perspective of ––The supply chain impacts for this part astrophysics and astronomy. the space economy of the space economy in Queensland For the purposes of this analysis, an are currently focused on the upstream economic perspective of the space industries – that is, the suppliers of economy has been developed. Based inputs into the core, such as advanced on the supply chain interactions across manufacturing. the space economy, this perspective ––The research in this part of the shows how the ‘core’ components of the space economy focuses on areas space economy interact with the broader such as materials and composites, upstream and downstream supply mathematics, and aeronautical chains. This analytical framework proves engineering. particularly useful when considering the •• The upstream supply chain for the part future growth scenarios of Queensland’s of the economy that sends objects into space economy in Chapter 8. space is the part of the space economy that receives from space, where launch capability and ground systems are the link between the two.

14 Building Queensland's space economy

Figure 2.2 Economic perspective of the space economy

Send into space Receive into space

Supplier relationships Purchaser relationships

Construction Telecommunications

Defence and Advanced aerospace manufacturing Defence Agriculture

CORE CORE

Niche Niche Highly skilled Highly skilled Typically a large human Focus on data/imagery/ capital and/or infrastructure/ signals received from space technology investment Typically location-specific Typically location-agnostic Engineering Transport Government Transport Includes: and Includes: and logistics logistics manufacturing of GNSS, earth observation, rockets, ground systems PNT

Business Nutrition Aerospace Mining and services resources Other Launch Natural resource ancillary capability management services

Ground capability

Research relationships Research relationships

E.g. Materials, composites, other engineering, mathematics, E.g. Astronomy, astrophysics, data science, industry, health, design earth science, agronomy

Source: Deloitte Access Economics

15 Sky is not the limit

3 Global and national context

16 Building Queensland's space economy

3.1 Overview 3.2 Global space economy “[It] may mark the final This chapter commences with an overview Historically, space has typically been an flight of the Space Shuttle, of the global space economy, including industry led, financed and managed by trends in both public and private sector government. International space agencies but it propels us into the investment, as well as trends in the sector have dominated the agenda and driven next era of our never- more broadly. The global space economy strategy and goal setting internally. The today is characterised by an increasing high entry costs and risks associated with ending adventure to number of private organisations and the space industry of old necessitated push the very frontiers of investors, but this hasn’t always been the government involvement. Accordingly, the case – the decentralisation of financing space industry’s market structure usually exploration and discovery and delivering of space programs has involved government purchases from a in space.” evolved from being almost entirely public small number of prominent aerospace in nature, to today’s substantially more firms such as Boeing, Northrup Grumman President Barack Obama, 2010 commercial focus (albeit still dominated or Lockheed Martin.4 by national governments). In addition to the government’s role This evolution in government involvement as leader in space exploration and has, ironically, increased the interest development, symmetries between space of many national governments in the technology and the defence/aerospace space economy, including Australia. With industries led to the government being the significant increase in commercial a customer of space innovations. The opportunities has come a wave of interest space industry; as Figure 3.1 demonstrates, in how existing space capabilities can driven by a combination of reduced public be supported in order to capitalise on sector involvement, high-tech innovation the growth in the global space economy. and substantial private investment, In the Australian context, this has been has evolved from this historical market spearheaded by the establishment of the structure to the ‘New Space’ that we Australian Space Agency in South Australia observe today. and the development of robust growth targets for the domestic space economy. The largest disruption of the last 60 years in the global space economy has The speed of change in the global and been the decentralisation of activity national context is critical to understanding from government into the private sector. why it is time for Queensland to consider Sparked by the end of America’s Space its current and future role in the space Shuttle program by President Obama in economy. Where does Queensland fit in 2010, decentralisation meant that for many the global space supply chain? private organisations, which had long supported international space agencies, the potential for significant commercial revenues became a reality.

The global space economy today is characterised by an increasing number of private organisations and investors, working alongside space agencies to achieve aspirational goals. Rapid improvements in science and technology, coupled with increased investment, has led to a global space economy that was valued at US$345 billion in 2016.5 Furthermore, OECD estimates put the global space economy’s employment at more than 900,000 persons in 2013.6

17 Figure 3.1 Evolution of government in space exploration

Decentralisation

Humans looking out to Humans looking back to space and the unknown earth from space

Cold-war era Post cold-war New space

Post WWII, space exploration featured as A period of exploration and international Improvements in technology have another dramatic arena of competition cooperation. Missions are driven by led to profit making opportunities. between the United States and Soviet a research agenda. The international Governments as a customer, rather Russia. Space Station, is the pinnacle of than sole provider and investor. international collaboration. Space activities are used to solve international problems.

Drivers: Drivers: Drivers:

•• Vision is clear, direct and necessary •• Increase scientific knowledge through •• Diffusion of technology exploration activities •• Sole purpose is to demonstrate •• International security concerns superiority in advancing space •• Develop useful civil applications of •• Decreased costs technologies space technology •• Increased private investment •• Government is the strategist, financier •• International cooperation and sharing and operator of cost and risk •• Commercial organisations are driven by the opportunity to make a profit •• High investment costs still requires Government's with deep pockets

Source: Deloitte Access Economics

3.2.1 Increased public and private International interest in the global space Despite the growing importance of sector investment economy is substantial, as demonstrated the commercial space sector, defence Despite the decentralisation of by Figure 3.2, with nearly 50 countries and aerospace continue to drive the organisations such as the National maintaining space budgets. One quarter use of space related technology and Aeronautics and Space Administration of the global space economy is made up of infrastructure. (NASA), public actors have not disappeared government budgets. – quite the opposite in fact. The space sector has distinguishing features that However, the dissemination of knowledge typically require public actors including and technology from traditional areas of the development and application of the space industry to the global market has cutting edge technologies and longer introduced the opportunity for significant lead times for both project development private sector returns. The global space and return on investments.7 More and economy has experienced rapid growth more countries are investing in sovereign in private investment. Today, space is space economies, driven by the need for a characterised by a vibrant commercial presence in space that can be associated sector, as demonstrated by Figure 3.3, with with security interests as well as social, growing numbers of entrepreneurs and economic and environmental factors. investors. More than 60% of space-related economic activity comes from commercial goods and services.8

18 Building Queensland's space economy

Figure 3.2 International Space Agency Budgets Canada Europe China Russia $400M $7B $11B $3.6B

USA India Australia Japan $48B $4.3B $28.2M $3.5B

France Germany Italy UK South Korea UAE $2.4B $1.6B $1.2B $500M $318M $150M

Indonesia Norway Malaysia Turkey Israel Singapore $140M $134M $120M $100M $90M $26M

Source: OECD, 2014

Figure 3.3 Investment in the space industry 2009 to present

Governmental Enterprenerial space age space age

1969 2009 2010 2012 2014 2015 2017 Apollo landed SpaceX first SpaceX SpaceX NanoRocks SpaceX SpaceX on the moon successful publishes Dragon launches lands orbital Falcon Heavy launch of launch prices; becomes first commercial booster, unlocks commercial introduces commercial deployment ushers in commercial payload market space vehicle via ISS resuability deep space transparency to berth with operations ISS $18B 412 SATELLITES MEDIA & EDUCATION INDUSTRIES PLANETARY 250 Companies 35 Companies 11 Companies MARKETS Cumulative Number of $8.3 B $15 M $154 M 8 Companies non-government companies $244 M investment in receiving LAUNCH BIOSPHERE INFORMATION LOGISTICS Space since 1983 investment 77 Companies 23 Companies & RESEARCH 10 Companies $8.6 B $515 M 8 Companies $147 M $77 M

Source: Space Angels, 2019 19 3.2.2 Growth and trends in the global The use of space systems and data “If one can figure out how space economy derived from space or space enabled Growth in the space economy is unlikely to services generates 70% of economic to effectively reuse rockets slow down; Morgan Stanley estimates that activities worldwide (based on 2015 just like aeroplanes, the the US$345 billion Global Space Industry estimates).12 The dual use of space will grow into a US$1.1 trillion Global Space technologies will also drive growth, as cost of access to space will Economy by 2040. organisations specialising in the application be reduced by as much as of EO, PNT and GNSS technologies reach The use of space enabled services, industries such as agriculture, mining and a factor of a hundred…that reduction in costs, and the insatiable transport. A further summary of these really is the fundamental human fascination with space and the trends is provided in Figure 3.5. unknown, is expected to foster strong breakthrough needed to growth in the space economy. This growth Evidence of these ‘New Space’ will result in the increased output and value organisations is emerging; in 2016, 114 revolutionise access to add of the sector. Specifically, innovations investors (the majority of which are based space.” 9 such as reusable rockets by SpaceX have in the United States of America [USA]) drastically changed the space economy. invested $2.8 billion into 43 start-up space Elon Musk, 2015 ventures across 49 deals worldwide.13 Reusable rockets have contributed to the Analysis reveals that the size of these reduction in satellite launch costs from investments (across all types) continues to US$200 million to US$60 million, with the grow; the average size of the deal increased 10 potential to drop as low as US$5 million. from $38 million to about $57 million on Moreover, the move away from large the previous year.14 satellites (characterised by long life and high reliability) towards smaller, very low cost cubesat technology, is changing the structure of the satellite industry. Satellite mass production could decrease that cost from $500 million per satellite to $500,000.11

Figure 3.4 Growth in the value of the global space economy

US $1.1 Global space trillion economy

2040

US $345 5% CAGR billion

2016

Source: Morgan Stanley

20 Building Queensland's space economy

Figure 3.5 Five trends in the global space economy

1 3 5

Technological advances A global economy Military/strategic creating expectations that is increasingly developments around of more cost-effective data dependent space as a crowded and (and therefore lucrative) valuable high ground space activities 2 4

Increased private Increasingly widely- investment by investors shared vision of who are new to space space as transformative for humanity

Source: Bryce Space and Technology, 2017

Remote Asset Management Remote asset management uses information, continuously collected via mobile, wired or wireless monitoring instruments, to create a two-way communication channel between assets and central monitoring applications. The ‘real-time’ data captured by this process allows for more effective maintenance scheduling and preventative maintenance strategy development. As a result, asset management processes are increasingly cost-effective, efficient and convenient when compared to traditional management practices such as on-site evaluations.

The practice has application across a variety of industries including transportation, food and beverage, oil and gas, metals and mining, healthcare and waste management. One particular example is within the manufacturing sector where remote monitoring procedures are used to capture critical asset parameters and track abnormality to avoid failures.

Source: Shoker, 2018; Infosys, 2018; Prescient & Strategic Intelligence, n.d.

21 3.3 Australian space economy However, what the Australian space industry Establishing the Agency has responded to Historically, Australia has had a passionate, lacks in size, it makes up for in substance. the need – as identified by stakeholders yet inconsistent, approach to national space The Australian space economy today as part of the Expert Reference Group’s activities. Australian involvement in space boasts several industry leaders across Inquiry – for a single point of contact for activities commenced with participation all sub-sectors in the space economy, domestic and international partnerships, in the International Geophysical Year, a with most individuals and organisations greater national coordination and global scientific research program focused engaging in a wide variety of collaborations strategic direction, government support on understanding the Earth’s relationship with international space agencies and to participate in global supply chains, and to its surrounding space environment.15 organisations. a whole-of-government approach to the 20 The establishment of the Woomera Rocket space sector. 3.3.1 Australian Space Agency Range in 1947 was originally used to develop The Australian Space Agency aims to Based in South Australia, the Agency long-range missiles during WWII and the “transform and grow a globally respected has been given the responsibility for cold war in Europe; this capability led to Australian space industry that lifts the civil strategic policy direction setting, Woomera being used a testing facility for the broader economy, inspires and improves the international representation, coordination Blue Streak rocket, which became the first lives of Australians – underpinned by strong of national civilian activities, and strategies stage of the Europa rocket under ELDO.16 international and national engagement.”18 to facilitate the growth of the Australian Despite participating in research, space industry sector as set out under The establishment of the Australian development and testing related to the Agency Charter. The 2018-19 Budget Space Agency (the Agency) in 2018 space, Australia has not managed to allocated the Agency a budget of $41 by the Australian Government, as a sustain a scaled or vibrant space ecosystem million ($26 million over four years - $5.7 dedicated, ongoing and whole-of- to make it a recognised world leader in million in 2018/19, $9.8 million in 2019/20, government statutory agency,19 signalled the space economy. For those who wish $11.8 million in 2020/21 and $13.7 million in the intent of the Australian Government to to pursue a career in space, aspiring 2021/22), of which $15 million is to support grow the Australian space economy and 21 enthusiasts typically seek to further their international space engagement. set the tone for the Australian space sector space related education overseas.17 moving forward.

Figure 3.6 Australia’s space timeline 2013 1964 1984 Australia's First ELDO launch CSIRO Office of satellite at Woomera (ELDO Space Science 1975 utilisation is the European and Applications Australian policy released Launcher Development (COSSA) sounding 2002 - policy Organisation) established - rocket FedSat specifically Australia develops program Launched excluded 1970 expertise in ends - Australian launch remote sensing Launch of scientific services, instrumentation 1957 Australia- research human and data analysis Australian OSCAR 5 satellite spaceflight space (an Australian launched and planetary activities amateur radio from Japan exploration commence satellite)

1970 1981 2009 2018 1998 Last ELDO Local space Australian Australian launch industry Space activities Act Space Research Space Agency at Woomera interest enacted - world's Program Established starts - Aussat first legislation Proposed 1967 domestic covering commercial established WRESAT Launch - satellite space operations - $40m to WRESAT satellite system (it was intended to support niche launch from approved support commercial space capability Woomera by Britain spaceport proposals development and Australia's and space Weapons Research education Establishment (WRE) programs

Source: Bryce Space and Technology, 2017

22 Building Queensland's space economy

3.3.2 Value, growth and capability Figure 3.7 Market size of the Australian space economy, 2015-16 The Australian Government’s review of Australia’s space industry capability to enable Australia to capitalise on the increasing opportunities within the global space industry sector (the Review) estimated the market size of the Australian space Commercial $3.6B economy in the 2015-16 financial year to be $3.94 billion, as seen in Figure 3.7.22 Non-Defence Government Agenci es $126M

The Expert Reference Group set an $3.94B University $44M ambitious and exciting goal for the Australian space community to triple the Defence-related $175M size of the Australian space economy from the 2015-16 estimate of $3.94 billion, to $10-$12 billion by 2030; representing a compound annual growth of approximately 8%.23 This will create an industry that is roughly one-third the size of Australia’s Source: Australian Government Department of Industry, Innovation and Science, 2018 current agricultural output of AU$36.7 billion for the 2015–2016 financial year.24 Further studies into the future of the Australian space economy have revealed several developing markets for which Australian industries have existing capability. As seen in Figure 3.8, Bryce Space and Technology highlighted where Australian businesses would be able to leverage existing strengths to compete in the global space economy.

Figure 3.8 Markets for Australia’s space economy to consider

Satellite radio

Consumer Commercial broadband space situational awareness Possible benefits from launch facility Earth Managed observation- services driven data Smallsat analytics manufacturing Navigation devices and applications

Space mining

Source: Bryce Space and Technology, 2017

23 Previous reviews of Australian space Along other areas of the supply chain such capability have determined that Australia as space systems, ground systems and has capabilities along most of the launch activities, previous evaluations space industry supply chain. However, have revealed Australia as having limited the strongest areas identified were or emerging capability – with only a where Australia has experience in few organisations operating. However, integrating space sourced data into Australia’s location and access to satellites, communications, Earth Observations strong education system, technical from Space (EOS) and GNSS.25 This is expertise, and international partnerships likely due to a combination of Australia’s and agreements means there exists geographic advantage, which has led to potential for increased participation in the a natural cluster of capabilities in areas international space industry supply chain.27 such as satellite communications, as well An overview of the competitive advantages as the two way flow between technical and across the Australian space economy are commercial capabilities between space summarised in Figure 3.9. related applications and other industries.26

Figure 3.9 Overview of space capability – rest of Australia

Space capability across other Australian jurisdictions

•• Proactive government •• Geographic location

•• Established energy & resource sectors •• Astronomy & ground stations •• Skilled labour •• Investment in technology •• Investment in R&D Northern Territory

Western Australia South Australia •• Proactive government New South Wales •• Defence capability • Proximity to Federal •• Historical participation • in space Government ACT •• Historical participation Victoria in space

•• Forestry sector •• Education & Defence sectors •• Ground station infrastructure and Tasmania •• Skilled labour expertise •• State Government investment in R&D

Source: Deloitte Access Economics

24 Building Queensland's space economy

PART ONE | BOTTOM UP ANALYSIS

The following chapters present a bottom up view of Queensland’s space economy 25 Sky is not the limit

4 Queensland’s space economy

26 Building Queensland's space economy

4.1 Overview 4.2 Overview of the space A data validation exercise was undertaken What gets measured gets managed, or economy directory to ensure that organisations who so the saying goes. In order to develop The Queensland Space Economy Capability responded to the survey were appropriate a plan for the future of Queensland’s Directory is the first time information on for analysis; from which 51 unique space economy, it is important to first Queensland’s space economy has been organisations have been included. Of the understand its current size and scope. captured and, as it is in its infancy, the 51, 41 are headquartered in Queensland, However, the niche capabilities of players results should be interpreted with caution. predominantly in the wider Brisbane area. in Queensland’s space economy, coupled The results are limited by completion of Reflecting the early stages of development with the blurred boundaries between other the capability survey and the summary in Queensland’s space economy, 32 of the sectors such as aerospace, defence and presented here provides a point-in-time 41 organisations do not consider space advanced manufacturing, have meant that, snapshot of Queensland’s space economy. to be their primary industry of operation. to date, measurement of Queensland’s As demonstrated by Figure 4.1, the space economy has been limited. The capability directory depicts the cross- majority of organisations in Queensland’s section of organisation type and primary space economy are based in South East As explained in Chapter 1, Deloitte Access area of capability; the organisations Queensland. Economics fielded an industry directory represented self-identified their primary and snapshot survey to create an industry area of capability in the space economy. capability directory and develop a snapshot of Queensland’s current space sector. The questions asked for key information about businesses and services, and the scope of activities currently contributing to Queensland’s space ecosystem. The resultant Queensland Space Economy Capability Directory is the basis of all results presented in this chapter.

Figure 4.1 Location of Queensland’s space economy

33 5

Sunshine Coast South East Queensland

13 9

Other Gold Coast

Source: Deloitte Access Economics

27 A summary of the directory, by the space economy sub-sectors (rows) and the type of organisations (columns), is presented below in Table 4.1. A full directory can be found in Appendix A.

Table 4.1 Summary of the Queensland space economy directory

Private University/ Government Industrial company Research Organisation Organisation Component and Material Supply 13

Satellite Owner/Operator

Space Qualified Testing and Facilities Space systems Space Subsystem Supply 1

Specialisation on nano and micro satellites (<50kg)

System Engineering and Technical Support 2

Component and Subsystem Management 1

Launch Launch Services 4 activities Launch Support Services

Launch Vehicle Manufacturing and Assembly 1

Antenna/Ground Station Component 1 or Material Supplier

Ground Segment Prime/System Integration

Ground Ground Segment Subsystem & Equipment Supplier systems Prime/System Integration 1

System Engineering and Technical Support Services 2

Tracking, Telemetry & Command Operations 1

Earth Observation Services & Applications 3

Satellite Communications Service Providers

Space enabled Satellite Navigation Service & Applications services Technical Support Services

User Equipment Manufacturer 3

User Equipment Suppliers

Consultancy Services 5 (e.g. IT, analytics, professional services)

Support Financial Services services Legal Services

Ancillary Services 3 Research and R&D 4 development Education and Education and Training 2 Training Other 1 1

Other Transport, logistics and construction 1 General component, material, engineering supply 9

Source: Deloitte Access Economics

28 Building Queensland's space economy

4.3 Key findings At present, the maturity of the space The Queensland space economy economy means that there is insufficient is dominated by small-medium demand to wholly support most enterprises (SMEs) and large organisations operating in the space multinational organisations. economy. This is reflected in thehigh Queensland has a developing space proportion of organisations that ecosystem that has fostered a operate primarily in other sectors. large number of highly specialised The following pages provide a more organisations, participating in areas of detailed breakdown of a selection of key the space economy which do not require components of the Queensland Space critical mass to operate. At the same time, Economy Capability Directory: these SMEs are supporting the operations •• Exporting activities of large multinational organisations participating in areas of the supply chain •• Turnover ranges that are characterised by high capital •• Employee ranges and investment costs, and experienced personnel with specific capability to plan, •• Space as the primary industry versus operate and deliver large-scale projects. space not as the primary industry •• Sub-sectors of the space economy. Organisations with the highest turnover ranges in Queensland are typically large multinationals with extensive capability across the space supply chain. The size and turnover range of these organisations is frequently driven by their strengths in other sectors, such as Defence and Aerospace, which have symmetries with the requirements of the space economy.

Organisations in Queensland’s space economy operate in both the upstream and downstream components of the supply chain, despite concentration in select sub-sector specialities. There are a large number of organisations clustered in the Space Systems and Other sub- sectors. This likely reflects the size and depth of the Queensland space economy.

29 Exporting activities

Respondents were asked to select whether they had exported goods or services overseas in the past 12 months. (n=59)

Chart 4.1 Exporting activities in Queensland’s space economy

40 36 35

30

25 20 20

15

10 Number of organisations 5 3

0 No Not applicable Yes (research institution etc.)

Summary of key findings

•• The majority of organisations (36) exported goods in the previous 12 months •• This trend was the same across all turnover ranges, with the exception of organisations less than $200,000 •• The majority of organisations that do not consider space their primary industry of operation (44) exported their products/ services (27). •• Of the organisations that do consider space their primary industry of operation (15), the majority exported their products/ services (9) •• The sub-sector with the most exporters was Space Systems (10) followed by Ground Systems (5)

30 Building Queensland's space economy

Turnover ranges

Respondents were asked to select which ANZSIC turnover range was most appropriate for FY18. (n=59)

Chart 4.24.1 ExportingTurnover ranges activities in Queensland’sin Queensland’s space space economy economy

19 20 14 15 10 10 6 5 33 4

0

Number of organisations Zero to $50,000 to $200,000 to $2 million to $5 million to $10 million or $10 million or less than less than less than less than less than more more $50,000 $200,000 $2 million $5 million $10 million

Summary of key findings

•• Almost half of the organisations in Queensland had turnover range in FY18 that was greater than $2 million •• One third of organisations reported turnover in excess of $10 million; of these, organisations are typically located in the Space Systems, Ground Systems and Space Enabled Services •• The highest turnover ranges were typically reported by the Ground Systems segment (most are large multinational organisations with capability across the supply chain) •• Most of the SMEs reported turnover in the ranges $200,000 – less than $2 million (13) and $2 – 5 million (8) •• Of the 13 organisations in the range up to $2 million, most are based in Ancillary Services, whilst SMEs earning $2 - $5 million are typically located in the Space Systems sub-sector

31 Employee ranges

Respondents were asked to select the most appropriate employee range for FY18. (n=59)

Chart 4.34.1 ExportingEmployee activitiesranges in in Queensland’s Queensland’s space space economy economy

30 24 25

20 18

15 10 10 4 5 3 Number of organisations 0 1-19 200+ 20-199 Non Employing Not applicable Employees Employees Employees (i.e. having no (research employees) institution etc.)

Summary of key findings

•• The Queensland space economy is dominated by SMEs ––SMEs typically sit in the Space Systems (9) sector and the Ancillary Services (5) •• Organisations employing between 20-199 (18) are primarily located in the Space Systems (6) and Ground Systems (6) sub-sectors ––10 organisations in Queensland selected the 200+ range •• This reflects both the universities that are engaged in space related activities as well as the large multinationals that have operations in Queensland •• The majority of organisations that consider space their primary area of operations are SMEs

32 Building Queensland's space economy

Space as the primary industry?

Respondents were asked to select whether they consider the space industry as their primary industry of operation. (N=15 for primary industry and n=44 for not the primary industry) Chart 4.1 Exporting activities in Queensland’s space economy Figure 4.2 Comparison between organisations with space as the primary industry of operation and not as the primary industry

Number of organisations Number of organisations, by age of organisations e is prim ac ar 3 Ancillary Services p y S 1 Others 4 Space Enabled Services 15 6 223 2

3 Ground systems s s

4 Launch activities 0-4 years >40 years 5-10 years 11-20 year 21-40 year Space is primary industry

is not prim Number of organisations, by primary industry ce a a ry p 12 11 S 10 10 9 8 6 6 4 44 3 3 2 1 1 0 Construction DefenceEducation ManufacturingMiningOther Professional, Transport and scientific and training technical services

Space is primary Space is not primary

•• 15 organisations consider space their primary industry •• The majority of organisations (16), are engaged in the Space of operation Systems sub-sector, followed by General, component, material, engineering supply (9) and Ancillary Services (5) •• Respondents were spread across Launch Activities (4), Ground Systems (3), Space Enabled Services (3), •• Space Systems Ancillary Services (3), R&D (1) and Other (1) ––Organisations are primary engaged in the Defence and Manufacturing and Transport sectors more broadly •• The majority (10) of organisations had turnover up to $2 million; of the organisations that earned more than •• General component, material, engineering supply $10 million (3), their primary capabilities lay in the Ground ––Organisations in this sub-sector typically operate in the Systems and Space Enabled Services sub-sectors Manufacturing and Defence sectors •• The Launch Activities sub-sector (4) was typically low •• Organisations with transferrable skills that have been employing and had turnover less than $2 million in FY18 engaged by the space sector include Mining, Professional, Scientific and Technical Services, Construction and Education •• The majority (9) of organisations exported their products/ and Training services in FY18; the majority were in the Ground Systems sub-sector

33 Sub-sectors

Respondents were asked to classify their business according to their primary area of capability. These have been aggregated across sub- sectors of the space economy. (n=59)

Chart 4.4 Sub-sectors in Queensland’s space economy

18 16 16 14 12

10 9 8 8 6 6 6 5 4 4

Number of organisations 22 2 1 0 Space Launch Ground Space Ancillary R&DEducation Other Transport, General Systems Activities Systems Enabled Services and logistics component, Services Training and material, construction engineering supply

Summary of key findings

•• Space Systems ––The majority of organisations in the sub-sector have been in ––The majority of organisations in the sub-sector report operation in excess of 10 years turnover in excess of $2 million •• Space Enabled Services ––The sub-sector is dominated by small-medium enterprises ––The SMEs in the sub-sector reported turnover of up to $5 (SMEs), with several (6) organisations with employees in the million, whilst the large organisations earned in excess of $10 20-199 range million in FY18 ––The majority of organisations exported their products in FY18 ––The sub-sector has a broad spectrum of duration of ––The majority of organisations in the sub-sector have been in operation length, with organisations in the less than 5 years operation in excess of 10 years category as well as several organisations in the excess of 10 years category •• Launch Activities •• R&D ––The sub-sector is evenly split in the export of products/ ––1 research organisation exported their products/services in services in FY18 FY18 ––Of the organisations in launch, 2 are SMEs whilst the rest ––As most organisations in this sub-sector are universities, they employ upwards of 20-199 personnel have longer duration of operations ––Organisations reported turnover in each of the ranges in •• Other FY18 ––Other includes the following categories: 1) transport, logistics ––Launch Activities is a very young sub-sector, with the majority and construction, 2) general component, material and of organisations in operation for less than 5 years engineering supply and 3) other. These organisations typically •• Ground Systems provide general inputs to the identified sub-sectors and ––The majority (4) of organisations in the sub-sector reported as such, are engaged in the space economy (and thereby turnover in excess of $10 million benefit from its growth) whilst not being directly involved in ––The sub-sector is characterised by high-earning, high- space related activity. Often, these organisations will facilitate employing organisations the activity of space organisations.

34 Building Queensland's space economy

5 Queensland’s competitive advantages

35 5.1 Overview The capability matrix has been developed The criteria for the capability matrix are The previous chapter presented an and assessed using supporting evidence assessed as strong, moderate or limited overview of the current size and scope of and analysis from a variety of sources and include: Queensland’s space economy, highlighting including: the industry capability directory •• Natural/Geography – Queensland’s the niche areas in which Queensland survey (survey 1) and industry capability geographic location provides a unique or currently chooses to operate. Where survey (survey 2), focus groups, discussions competitive advantage for the sub-sector. with the Queensland Space Industry we currently specialise, and where the •• Physical infrastructure – availability Reference Group, site visits, desktop opportunities for growth lie, are a function of necessary physical infrastructure in research and sources from the Queensland of our competitive advantages. We do not Queensland for the sub-sector to operate Parliamentary Inquiry. have the scale to compete in all areas of e.g. satellites. the global space economy, so where do 5.2.1 Development of criteria for •• Human capital – availability/ we have the natural, physical and human assessment appropriateness of Queensland advantages that ensure that when we do The extent of capability across the knowledge and expertise that is critical to choose to invest, we will be competitive? Queensland supply chain largely reflects development. both the size of the Queensland sector, and This chapter introduces the capability •• Demand – state of the current demand the developing national space economy. matrix used to identify these areas for the sub-sectors products and/ of competitive advantage. The matrix Despite some expert capability areas or services in both the national and assesses natural/geographical, physical and in the Queensland space economy, international market. human capital characteristics of each of the there does not exist the same history of •• Supply – readiness of supply for the space economy sub-sectors, as well as the operations that develops critical mass products and/or services required by the presence of deep markets. The evidence and which would permit a meaningful sub-sector. base underlying the assessment has been assessment of Queensland’s capabilities derived from industry consultations and Table 5.1 details the assessment criteria for relative to other space economies. For the industry capability survey. the capability matrix and the definition of instance, the decades of investment in, and the differing scales of maturity – between development of, the space sector in the 5.2 Capability matrix strong, moderate and limited capability. United States and the capability of NASA is An extensive assessment of the not comparable to the level of investment Queensland space economy and its 5.3 Assessment of Queensland’s and development in Australia’s national capabilities across the supply chain has space industry capability sector, or Queensland’s. not previously been undertaken. As such, A summary of the application of the development of a capability matrix To appropriately gauge capability across the capability matrix across each of and corresponding criteria was required to the supply chain, sub-sectors in the Queensland’s space industry sub-sectors assess the Queensland space economy as Queensland space industry have been is provided in Table 5.2. it stands today. assessed relative to the level of maturity The summary provides an overview of of the Queensland and national space where capability exists in the Queensland Organisations across the space supply economy. The criteria and assessment space industry, and highlights areas chain in Queensland, notwithstanding approach also accounts for the recognised with strong capability in the Queensland a few exceptions, are typically small in market criteria that are necessary ecosystem. Overall, the Queensland space number and size. However, they exhibit conditions to the operation and growth of industry is characterised by scattered, but industry-leading expertise in the often the space economy. moderate capability in highly specialised niche areas in which they operate. areas. This approach reflects the performance Across all sub-sectors in the space of each sub-sector and takes into Further detail concerning each element economy, organisations are engaged consideration the fact that Queensland’s of the capability matrix, and the in commercial and/or collaborative space economy has significant growth corresponding assessment across the sub- relationships with large international potential which, for the most part, has sectors of the industry, is provided in the companies or space agencies. This reflects not yet been realised. The approach also following sections of this chapter as well as a vibrant ecosystem of well-connected reflects the inputs and outputs of the in Appendix B. organisations participating in highly space economy, and highlights where specialised areas that often demand high Queensland may have a competitive entry and investment costs, and have long advantage, or an existing capability that has investment cycles. symmetries with the global space economy.

36 Building Queensland's space economy

Table 5.1 Assessment criteria for capability matrix

Natural/Geography Physical Human Capital Demand Supply

Queensland’s natural Queensland’s Queensland’s There is a mature There is a mature environment/ space economy workforce is able to domestic and domestic and geography provides has the physical sustain the majority international international market a unique competitive infrastructure of the human capital market demand for supply for products/ Strong advantage, which required for the requirements of products/services services required by sub-sector, is well the sub-sector, with the sub-sector the sub-sector. the sub-sector can established and/ only a small number produces. leverage off. or can operate of specialist skills independently. imported.

Queensland’s natural Queensland’s The human capital There is a mature There is a mature environment/ space economy required by the international international geography is has some physical sub-sector is not market demand and market supply and advantageous but infrastructure adequate to sustain developing national developing national not critical to the required by the sub- development and/ market demand for market supply for Moderate or growth without products/services products/services development of the sector but relies on skills being imported. the sub-sector required by the sub-sector. other jurisdictions to The sub-sector produces. sub-sector. operate. frequently relies on other jurisdictions for expertise.

Queensland’s natural Queensland’s There is no available There is demand The international environment/ space economy expertise for the sub- in the international market (either geography does does not have the sector. All human market (either mature or not provide any relevant physical capital is imported. mature or developing) is the Limited additional benefit to infrastructure to developing) on which primary supplier the sub-sector. the sub-sector relies as there are no develop the sub- entirely as there is suppliers in the sector. no national market national market. demand.

Source: Criteria developed by Deloitte Access Economics

Table 5.2 Queensland Capability Matrix

Space industry Natural/ Physical Human Capital Demand Supply sub-sector Geography

Space Systems N/A

Launch Activities

Ground Systems

Space Enabled N/A Services

Ancillary Services N/A N/A

R&D

Education N/A

37 5.3.2 Space Systems

Space industry Natural/ Physical Human Capital Demand Supply sub-sector Geography

Space Systems N/A Moderate Limited Moderate Limited

The space systems sub-sector contributes The majority of organisations have to the supply, manufacture and operation exported their products/services in Milspec Solutions of infrastructure and technology used in the previous financial year, reflecting space. Organisations in the sub-sector are international demand for the products In operation for over 40 years, spread across three key capability areas and/or services offered by the sub-sector. Milspec designs and manufactures – Component and Material Supply, Space However, as most organisations do not brushless alternators and portable Subsystem Supply, and System Engineering consider space their primary industry of power systems for defence and Technical Support. activity, these exports are unlikely to be forces across the world. Milspec entirely space related. This suggests that is an Australian organisation that In Queensland, the majority of while there is capability in the sub-sector, provides subsystems for defence organisations in the sub-sector do not which is likely to support the existing and other industry applications. identify space as their primary activity of demand of the emerging industry in operations. There is some, but specific, Queensland and Australia, there is scarce “With the new worldwide rule physical infrastructure available to the sub- domestic demand for the products/ change of what goes into space sector. This rating further reflects the size services of the sub-sector. This may limit must come back on its own power, of the sub-sector, rather than the individual the ability of the sub-sector to develop we have the equipment to assist capability of organisations; while physical domestically. with this. There is also equipment infrastructure exists, there is not critical that no one else manufacturers for mass in the industry. It was identified that growth in the sub- the space program.” sector would be well supported by existing strengths across industries such as Defence, Aerospace, Manufacturing and Mining in the Queensland economy.

38 Building Queensland's space economy

5.3.3 Launch Activities

Space industry Natural/ Physical Human Capital Demand Supply sub-sector Geography

Launch Activities Strong Limited Limited Moderate Limited

Capability in the launch sub-sector is The size, turnover and lack of export spread across Component and Subsystem capability of organisations in the launch Black Sky Aerospace Management and Launch Services. sector further suggests there may be a demand/supply issue. Despite this, it is The Queensland company behind The Queensland launch activities sub- important to note organisations have been the sub-orbital launch, Black sector has a strong competitive advantage able to rely on Queensland industry for Sky Aerospace (BSA) is one of due to the Queensland’s geography and materials and manufacturing capability for Australia’s leading space launch proximity to the equator. This enables many of the necessary inputs; there do proponents. BSA was responsible launch into both polar and equatorial however remain some inputs which the for Australia’s first commercial orbits, as well as access to large areas of sub-sector cannot source in Queensland. rocket launch west of Goondiwindi unused land and airspace. For example, propulsion activities require in outback Queensland in 2018. hydrogen peroxide that organisations must Three commercial payloads were Queensland is home to two of the import from international suppliers. tested on the sub-orbital flight: most active rocket launch proponents in Australia. Both highly specialised Accordingly, the limited rating given to the 1. Space rated sensors for the organisations have access to interim launch supply criteria in this sub-sector reflects 1) Australian Centre for Space facilities but not a fully operational launch the size of the sub-sector in Queensland and Engineering Research (ACSER). site capable of supporting commercial 2) key limitations which make it necessary launches. Changes in market structure for organisations to purchase inputs outside 2. A carbon ceramic panel of the global space economy have led to of Queensland and which prohibit the sub- for hypersonic flight, with global growth in launch activity that exists sector from growing domestically. embedded sensors, onboard for to support the launch of commercial the University of Queensland’s payloads into space. These payloads Composites and launch start-up are driven by growth in the satellite Gilmour Space Technologies Hypersonix. industry; which is driven by demand for the formation of mega-constellations. In Founded in 2012, the Queensland 3. A wrist device for skydivers Queensland, the launch activities sub- based hybrid propulsion company which provides data on altitude, sector does not have available to it the plans to launch its first commercial speed and GPS tracking, physical infrastructure that is required in to hybrid rocket to space in 2020. manufactured by Dekunu compete in the global launch market. The company plans to launch Technologies. The launch also Eris-100 in 2020, a three-stage paved the way for more BSA While some organisations in launch commercial vehicle capable of rocket flights in Queensland, experienced differing degrees of success launch 100 kilograms to Low-Earth including this re-usable rocket locating individuals with the necessary Orbit; followed by Eris-400 in 2021, which landed 1.8 kilometres knowledge and skills, the sub-sector has to a clustered-engine vehicle for away from the launch site frequently rely on skills and expertise outside payloads of up to 400 kilograms. of Queensland to conduct their operations. The sub-sector expressed concerns about “The small satellite revolution is the availability of human capital with the gaining momentum globally, with appropriate skills required to sustain growth thousands of small satellites slated and development in the sub-sector. to launch into low-Earth orbits (LEO) over the next five years” Analysis of the launch activities sub-sector suggests there is developing demand "Our end goal is to provide low-cost for launch services in Australia which is access to space, and to enable currently unmet. This unmet demand is in human spaceflight and exploration." part explained by the sub-sector presently – Adam Gilmour, CEO & Founder, being limited by regulation and lack of Gilmour Space Technologies commercial launch facilities. 39 5.3.4 Ground Systems

Space industry Natural/ Physical Human Capital Demand Supply sub-sector Geography

Space Systems Strong Limited Limited Moderate Limited

Organisations have identified capability in Ground systems organisations are Antenna/Ground Station Component or primarily suppliers, technical support, or EM Solutions Material Supplier, Prime/System Integration operational assistance, limiting the growth and Ground Segment/System Integration. potential in downstream applications Based in Yeronga, EM Solutions associated with the sub-sector. Australia’s is a broadband satellite Similar to the launch sub-sector, ground long historical involvement in this sector communications equipment systems benefit from a competitive means there is significant human capital manufacturer, with extensive R&D advantage in geographic location. Ground capability across the nation. However, and engineering capabilities related systems have geographic requirements in Queensland-based organisations identified to microwave and RF subsystems, order to achieve operational (e.g. areas of the lack of individuals participating in the electromagnetics, antenna low interference) and strategic (e.g. limited sub-sector to support further long term design, mechanical pedestals, and ground station capability in southern growth. In Queensland, several of the stabilised platforms. hemisphere) objectives. Queensland is well ground segment organisations are large positioned to leverage these objectives and multinationals, which enables them to draw EM Solutions design and support satellite launch services with large from their international networks to fill manufacture differentiated open spaces, significant uninhabited land skills gaps. microwave and RF products mass close to the equator and flight paths and systems for satellite and over the ocean. All organisations in the ground systems broadband communications. segment export their products/services, Exporting globally, EM Solutions The sub-sector has limited capability with which likely reflects a combination supply next generation high respect to the physical infrastructure of factors at play in the sub-sector. speed communications products required to facilitate activities. While Several of the organisations are large that assist in the delivery of real- capability exists in operating and facilitating multinationals with significant capability time voice, data and multimedia the use of ground systems infrastructure across not only the space supply chain, anywhere in the world. and technology, a limitation of the sub- but other industries such as Defence and sector is the lack of large infrastructure, Aerospace (which have similar product/ ownership of which would drive expansion service requirements). Significant demand and growth. An absence of ground for these products and services exists station infrastructure limits not only the in international markets. Consequently, growth of the sub-sector itself, but also growth in the sub-sector at present is that of other sub-sectors including Space not driven by developing national Enabled Services that could benefit from demand but rather the demand of infrastructure flow on effects. international markets.

40 Building Queensland's space economy

5.3.5 Space Enabled Services

Space industry Natural/ Physical Human Capital Demand Supply sub-sector Geography Space Enabled N/A Moderate Moderate Moderate Moderate Services

The sub-sector has access to the necessary The sub-sector has moderate supply operating infrastructure including satellites, capability which reflects organisations’ Ozius ground stations and telescopes. However, import requirements and strong capability growth in Queensland is limited capability at the national, but not state, In a country as dry as Australia, by the lack of ownership of key physical level. Inputs for the sector which are not the ability to find water under the infrastructure assets that support the sub- able to be sourced from Queensland earth’s surface using data from sector. include satellite imagery, software and space is a game changer. And that advanced cloud computing. This does not is precisely what Queensland Earth Constraints to growth in the sub-sector however restrict the operational ability Observation analytics company are also driven by the highly specialised of organisations in the sector. Space Ozius did; finding springs in the nature of the fields in which organisations enabled services rely heavily on inputs Great Artesian Basin no-one knew operate. These require human capital with sourced from the Information, Media and existed. By combining EO data with specific qualifications and experience. All Telecommunications sector for which the time-series historical information organisations in the sub-sector identified broader Australian economy has and real-time ground observation, the difficulty in hiring a workforce with skills significant capability. However, the Ozius is changing the space-based in the requisite fields. majority of expertise in the sector is data analytics game. not based in Queensland. Growth potential exists in the sub-sector Ozius relies on this unique and is driven by EO, PNT and GNSS combination of existing and technology, and their application across emergent technologies; their non-traditional areas in the economy. bespoke combination of EO data This growth will support the development analytics, machine learning, of the sector. historical data and planning, environmental science and remote Developing demand in Australia for sensing expertise have lead the products/services of the sub-sector is company to work with blue- chip a constraint to growth. Organisations energy and resource companies. expressed difficulty gaining access to international markets due, in some “Ozius is a commercial, remote cases, to trade relations. Despite this, the sensing analytics company, which majority of organisations export their utilises space-based data from products/services. While predominantly satellites” Ben Starkey, business location agnostic, exposure to industries manager of Ozius. with potential to use the sub-sector’s products/services is a key advantage for organisations based in Queensland. This advantage is somewhat limited however by a lack of ground system infrastructure that would provide significant flow on effects to organisations in the sub-sector.

41 5.3.6 Ancillary Services

Space industry Natural/ Physical Human Capital Demand Supply sub-sector Geography

Ancillary Services N/A N/A Limited Limited Limited

Limited capability exists in the sub-sector Despite this, some unique capabilities do at present. The breadth of skills required exist in Queensland’s space economy. International Aerospace to provide services to the sub-sector is Organisations with skills and experience in Law & Policy Group limited by the existing size and demand industries such as Defence and Aerospace for services of organisations operating have been able to provide services to some Bringing together expertise in primarily in the space economy. organisations in the space economy in the international aviation, space, drone absence of specialised products/services. and defence law is how IALPG Demand for products/services provided works - we have diverse expertise by the sub-sector is dependent on the size to bring about constructive and of Queensland’s space economy. Without commercial solutions to time- broader growth in the space economy sensitive legal problems even domestically, there will be limited capability where they are politically-sensitive in the sub-sector. or part of regionally important aviation projects.

IALPG’s Space Law & Strategy expert, Duncan Blake “is keen to facilitate a stronger Australian space industry, as well as finding ways for all sectors of the global space industry to collaborate in the development of global space governance for a more stable and better connected world.”

42 Building Queensland's space economy

5.3.7 Research and Development

Space industry Natural/ Physical Human Capital Demand Supply sub-sector Geography

R&D Moderate Moderate Moderate Moderate Limited

Organisations in this sub-sector are typically university or Government University of Southern Queensland (USQ) affiliations with industry leading expertise in niche areas of the space economy. USQ is an R&D institution with focus and capability across a number of space sub-sectors, exemplified by its different research centres/groups. R&D in Queensland has formed some natural clusters of expertise, partially The Centre for Future Materials (CFM), home to USQ’s Advanced Composites due to geographic advantages. Proximity Manufacturing research programme team, provides “novel design, manufacture to the equator, clear night skies and and testing for aerospace, space and defence advanced composite structures.” alternative time-zones have encouraged Through partnerships with public and private, domestic and international capability in areas such as observation, entities, the centre is developing one-of-a-kind R&D capabilities. tracking and testing. USQ’s Centre for Astrophysics (CA) specialises in R&D capabilities relevant to The sub-sector requires high-cost optical tracking, scientific imaging, spectroscopy, spectropolarimetry, photonics, infrastructure to support operations; in celestial mechanics, space resources and space weather. The centre extensively some areas, Queensland organisations collaborates with international institutions including the NASA Exoplanet have world-leading capability in small Science Institute (Caltech) and the Harvard-Smithsonian Centre for Astrophysics pockets of expertise. This has encouraged on a range of R&D projects, some of which are facilitated by USQ’s Mount Kent the growth of clusters, attraction of Observatory. investment and furthering of knowledge. The limited physical infrastructure is a The Hypersonics Group (HG) delivers aerospace research outcomes in reflection of the high investment costs conjunction with national and international partners including the ESA and associated with specific technologies. NASA. It has undertaken, and continues to be involved in, various R&D projects. An example is the ‘Spacecraft re-entry break-up’ initiative, an Australian-German Most of Queensland’s major universities exchange program with the Institute of Space Systems, at the University of have capability in unique areas of space. Stuttgart, to develop dispersion models used to manage end-of-life deorbit of Widespread expertise across organisations spacecraft. is not observed as the Queensland space economy is not sufficient to sustain large amounts of human capital. Organisations experience varying degrees of difficulty in hiring due to the extremely specialised areas of interest. The moderate rating reflects that where there exists human capital R&D capability in Queensland, individuals are industry leaders. However, a large scale workforce does not exist.

The sub-sector collaborates widely across the global space economy in the absence of local and national demand for expertise. However, this has also contributed to the depth of specialisation which has occurred in the sub-sector as individuals/organisations are typically well connected and at the forefront of innovations in their chosen fields. Limited supply of inputs required for the sub-sectors products/services is often met by the international market. 43 5.3.8 Education and Training

Space industry Natural/ Physical Human Capital Demand Supply sub-sector Geography

Education N/A Moderate Moderate Limited Limited

Capability in the sub-sector is limited in its provision of space specific courses Educating the next generation and opportunities. However, there exists industry-leading educational opportunities Australian Space Design Competitions provide industry-simulation events for and capabilities in several areas with high-school students in Australia. Competitions provide interactive, high-tempo, symmetries to the space economy. and dynamic environments for students to further their Science, Technology, Engineering, and Mathematics (STEM) skills. Since 2002, ASDC have partnered Queensland educational institutions with a number of organisations and schools across Australia to nourish and are well placed to leverage off existing prepare the next generation of innovative young minds. capability should growth in the space economy drive activity in the education The champion team from the ASDC Finals represents Australia at the sector. Several of the education International Space Settlement Design Competition (ISSDC), held annually the institutions have specialised research following July (due to Northern Hemisphere school years) at the Kennedy Space units dedicated to space activities as well Centre (Florida, USA). Held at the University of Queensland, this year, the winning as industry-leading expertise. However, team comprised of representatives from two Queensland high schools; who will they do not presently provide educational now go on to represent Australia. opportunities specifically designed for the space sector. The Aerospace Gateway to Industry Schools program was established to support the growth and development of an effective workforce for the aviation industry Limited demand for, and supply of, sector. This program provides opportunities for young people to undertake education and training specific to space structured workplace learning, school-based apprenticeships and traineeships, related activities is a reflection of the size full-time employment, and further study through industry-school partnerships. of the current local market. There has not It has proven essential in meeting the Queensland Government’s aim of previously been sufficient demand for transitioning young people from school to work while completing school and education specific to the space sector; gaining formal qualifications. individuals seeking to further pursue space education and gain industry experience will The program currently involves a total of 18* Queensland secondary schools often do so overseas. This is often referred (government and non-government), with 300 students throughout Queensland to by space organisations as ‘brain drain’ studying Aerospace studies. There are over 30 industry partners and and is sighted as a primary constraint supporters engaged including local aerospace entities, training institutions and to growth. This phenomena further universities. These partners all contribute to creating pathways for students into exacerbates the problem as the existing Queensland’s aerospace industry. industry is required to import expertise, reducing demand for space-related education over the long-term.

44 Building Queensland's space economy

6 Areas for future growth in Queensland’s space economy

45 6.1 Overview Moreover, the adoption of space enabled The establishment of the Australian Space Growth opportunities for Queensland’s services by other Queensland industries Agency signalled to the international space space economy lie at the nexus of was also revealed as an area for – community Australia’s intention to invest competitive advantages, existing potentially large – growth. and grow its capability. As international capabilities and global trends. However, the space markets become increasingly Each of these are described in more detail space economy is not something that can decentralised, space agencies and throughout the chapter, with evidence be grown overnight; rather, deep expertise, organisations are forced to fill capability provided by the industry consultation fostered by decades of public and private gaps with the expertise of commercial process and capability survey. investment, is necessary to compete in the actors. The pivot towards industry has highly competitive global supply chain. 6.2 Connecting created unprecedented commercial opportunities and significant Space is the art of making the impossible This chapter presents the key areas for investment, with the opportunity possible. It requires significant coordination growth in Queensland’s space economy. for Queensland organisations and and allows for the sharing of challenges, researchers to capitalise. Advances Consultations with the industry revealed risks and opportunities. It takes a village in space technology, led by commercial four recurring themes about areas for to dream, design, manufacture, test and organisations with ambitious goals, have future growth in Queensland’s core space execute all things space. Pushing the reduced costs and barriers to entry economy (Figure 6.1): boundaries of almost every industry, for niche players such as those in the •• Connecting into the global space space is not something agencies and Queensland space economy. economy, which is set for sustained organisations typically do alone. The growth interdependence of space activities presents an opportunity for a •• Strengthening our existing capability developing ecosystem in Queensland. to ensure that our current areas of Deep networks in international markets niche expertise are world class and are create opportunities for organisations to positioned for growth position themselves so as to capitalise •• Experimenting through a continued on trends in global markets. Strong focus on our deep – albeit niche – international demand already exists for expertise in research and development Queensland organisations in areas for which they have niche capability and •• Leveraging current space economy expertise however, growth requires a strengths, and broader strengths such strong international presence and the right as advanced manufacturing, to move into connections into the global supply chain. new areas of the space economy.

Figure 6.1. Areas for future growth in Queensland’s space economy

Connecting Experimenting Fostering international networks Continuing to invest in R&D 01 to seize growth opportunities 03

Strenghthening Leveraging Building on our existing space capability Drawing on our broader economic 02 04 strengths to grow space related capability

Adopting Realising the application of space technology across the Queensland economy

46 Building Queensland's space economy

Key to the success of several 6.3 Strengthening Looking downstream, Queensland Queensland organisations, in the The Queensland space economy has also has an advantage in an area which absence of a mature national market, capability in several niche areas across has experienced significant growth in has been their ability to foster the supply chain. However, there exists the global market – the global satellite relationships with international capacity for growth in both the industry (inclusive of PNT, EO and GNSS; space agencies and organisations. upstream and downstream segments as explained by Figure 6.2) recorded Queensland’s space economy is highly of the supply chain where there are $2.4 billion in venture capital investment 29 collaborative, with private organisations exponential growth opportunities to in 2018. Importantly for Queensland, and research institutions regularly working be realised. Evaluation of the global EO benefited from almost 40% of this together to solve problems. Queensland launch industry by Space Angels revealed investment. Characterised by lower capital space companies have worked alongside that 2018 saw the realisation of commercial costs and shorter investment cycles, several international space agencies Small Launch vehicles, with $1.6 billion EO and other Space Enabled Services including NASA, the European Space invested in the Launch industry.28 represent a key global growth area for Agency (ESA), the Japan Aerospace Queensland’s launch capabilities are in which Queensland space economy has Exploration Agency (JAXA), and the China their infancy, insofar as there exist very existing capabilities. National Space Administration (CNSA). The few organisations operating in this area. global space economy is characterised However, where there does exist by a willingness to share experiences and capability, organisations are well learn from others whilst remaining highly recognised and have been able to draw competitive. The value of deep networks on local industry for support. and international connectedness to strengthen capability and expertise is high.

Figure 6.2 Defining Downstream Space Activities

Delivers crucial data that enables national capabilities, such as weather and warning services, disaster mitigation and monitoring our changing climate. Earth Observation EOS also helps protect and manage our natural and built environments for sustainable development.

Enables efficient logistics for mobile transport fleets on our roads, air, and sea. PNT services also provide time-stamping for financial transactions, and Position, Navigation & Timing precision measurements for civil engineering, agriculture, and personal location based services.

Continues to provide a number of specialised functions, including supporting Australia’s defence commitments around the world, and providing broadcast, broadband internet and telephony services. Importantly, Satellite Communication communication satellites will help bridge Australia’s digital divide, providing services to regional and remote areas that previously had poor or non- existent terrestrial based internet services.

Contributes to understanding of the space environment, and includes Space Situational Awareness detecting, tracking and identifying objects in space, and understanding the effects of adverse space weather and space debris.

Source: Australian Government Space Coordination Committee, 2018

47 6.4 Experimenting 6.5 Leveraging 6.6 Adopting One of the greatest areas of expertise Queensland has mature capability Queensland has at its fingertips and capability for the Queensland in several industries where alignment a ready-made downstream space economy is Research and exists to space related activities, market for the application of space Development. Significant investment such as advanced manufacturing and enabled services. The challenge lies in over long periods of time by several of aerospace more broadly. Encouraging improving end-user understanding of Queensland’s universities has fostered organisations within industries to expand the full extent of possibilities that space several pockets of niche capability. their capabilities outside the core of enabled services (such as EO, PNT, GNSS Home-grown expertise and passion their existing operations and to develop and associated analytics) can provide for have driven further investment and space related capabilities will grow supply industry. Engagement of new industrial growth in research and development side competencies in the Queensland end users in the development of in the local space economy, whilst also space economy. Appropriately upskilling decision-ready data and analytics positioning Queensland as a viable individuals and educating organisations could derive productivity gains across location for international researchers about the opportunities and potential the Queensland economy. Connecting to further their expertise. Several of symmetries in markets will encourage potential demand with existing capability the organisations in other areas of the organisations in traditional industries to in supply is a catalyst to growing supply chain are engaged with more consider space as a viable opportunity to advanced capability in Queensland than one research institution to bridge diversify their operations. downstream organisations. knowledge gaps in their operations. Collaborative research and memorandums There also exists the opportunity Industries such as agriculture, mining of understanding between organisations for industries to apply their and manufacturing drive Queensland’s and universities based in Queensland are capability to developing areas of economy. There are more than 30,000 a regular feature of the space economy, the space economy. Growth areas businesses carrying out agricultural 30 and develop the expertise of both parties. such as asteroid mining, space debris activity in Queensland. Like many Growth in Queensland’s Research and tracking and deep space exploration industries across Queensland, the high Development capability contributes to align with industries that Queensland costs of production are rising and financial the building in capability of organisations has expert capability in and present a sustainability is a major concern to many in across all areas of the supply chain. unique competitive advantage should the agribusiness supply chain. The industry Sustained investment and coordination organisations leverage their strengths. also faces a range of increasing resource across Queensland’s diverse set of and environmental constraints that need research and development capability will to be managed, including water scarcity, assist the developing space economy in pests and disease, climate change impacts Queensland to bridge gaps and land degradation. The use of data in capability. analytics derived from space to provide key Queensland industries with solutions to their biggest problems is a significant opportunity. Tailored products that reflect the direct needs of industry could deliver serious economic benefits for Queensland businesses. Necessity breeds innovation and therein lies the potential value of a mutually beneficial relationship between a growing Queensland space economy and industry.

48 Building Queensland's space economy

Figure 6.3 Adopting - Application of Space Enabled Services

Agriculture & Farming Monitoring of damage caused by wild animals; improving the efficiency, profitability & sustainability of daily activities; irrigation scheduling; variable rate fertilization; crop growth monitoring; yield estimation; optimization of grazing management; crop water & nutrient status; long-term weather predictions to assist with planning and crop selection; spatial soil and plant condition data; land valuation

Space Global Earth Navigation Observation Enabled Services Satellite Systems

Disaster/Environmental Management Industry Extreme weather monitoring; mapping Obstacle detection systems; network of disaster damage; spatial and temporal Position, monitoring; route optimization; high monitoring of natural environments precision navigation; identification of Navigation & mineral deposits; site rehabilitation and Timing land-use change; remote monitoring of oil, gas & biofuel pipelines

Source: Deloitte Access Economics

49 Sky is not the limit

PART TWO | TOP DOWN ANALYSIS

The following chapters present a top down view of Queensland’s space economy and are based on economic modelling (CGE) of the industry. 50 Building Queensland's space economy

7 Baseline profile of Queensland’s space economy

51 Sky is not the limit

Current Queensland space economy

33% Space technology manufacturing

22% Satellite communications 23% Direct to home TV $500 million value added

$760 million 10% revenue 12% Other Earth observation and ground station infrastructure

2,000 Sub-industry FTEs breakdown % of revenue

52 Building Queensland's space economy

From here, the current economic 7.1 Overview Due to the nature of the CGE model contribution and future potential economic Where Part One of this report presented a used in this chapter (and the next), the impact – both in terms of employment, bottom up analysis of Queensland’s space space sub-sectors discussed here are revenue and value added is presented economy based on information provided not directly comparable to those used (refer Figure 7.1). Revenue is the sales and by organisations, Part Two provides a top in Part One’s analysis. CGE models services income earned by businesses down analysis based on a well-established have pre-defined databases with a through sales of products and services methodology for ‘carving out’ the space specific sectoral structure, and while to customers. Value added measures the economy from the broader Queensland this analysis has tried to align with the value added by businesses through the economy. This approach provides an sub-sectors of the space economy as use of labour and capital. Importantly, estimate of the economic contribution of the closely as possible, there are some value added is a measure of economic space economy today, and an estimate of differences remaining. the potential future economic impact of the contribution and summed across all space economy over the next two decades. industries aggregates to gross domestic product (national level) or at the state level This chapter begins with a brief overview to gross state product. Value added is also of the methodology used to construct this a net measure as it removes the costs of economic baseline – the interested reader goods of services used up by businesses to is invited to explore the methodology in produce output. more detail in Appendix C.

Figure 7.1 Queensland’s space industry at a glance

2019

In the production of space related goods and services, the industry directly:

Employs approximately 2,000 FTEs

Generates $760 million in revenue

Generates $500 million in value added (the direct economic contribution).

In the production of space related goods and services, the industry directly:

Conservative growth Medium growth (base case) High growth

Employs approximately Employs approximately Employs approximately 4,000 FTEs 5,000 FTEs 6,000 FTEs

Generates $1.7 billion Generates $2.0 billion Generates $2.7 billion in revenue in revenue in revenue

Generates $1.1 billion Generates $1.3 billion Generates $1.7 billion in value added in value added in value added

2036

53 7.2 Estimating the economic The main segments of the production of contribution in 2019 goods, services and technologies in the The baseline estimates of the size of space industry include: Queensland’s space industry has been •• Satellite communications; estimated using primary data sources •• Direct-to-home TV; and integrated into the Deloitte Access •• Earth observation and ground station Economics’ CGE model using assumptions infrastructure operation; on future projected growth of the industry. This model provides a representation of •• Space technology manufacturing; and Queensland’s economy – households and •• Other activities. firms and the trade linkages between them – as well as the wider Australian and global economies. The estimates of the size and scope of the space industry have been constructed by ‘carving out’ this industry from the existing industries within the CGE model – for example, the manufacturing, aerospace, defence sectors.

Figure 7.2 Sub-sectors of the space industry for economic modelling purposes

Satellite Direct-to-home TV Earth observation Space technology Other space-related communications includes the satellite and ground station manufacturing services encompass broadcast of pay TV infrastructure sub-sector includes include space research, mobile satellite and free-to-air TV operation the manufacture space launching communications, comprises base of high-technology facilities and other satellite internet stations, ground materials, ancillary space services systems, satellite data, stations, observatories, nanosatellites, that support activity. satellite imaging and radars as well as other nanosatellite all other non-television infrastructure required components, satellite satellite broadcasting. to uplink, operate and subsystems; and track satellite systems other space-related components and products.

54 Building Queensland's space economy

7.2.1 Economic contribution of global 7.2.2 Approach to estimating the 7.3 Queensland’s space and national space industry economic contribution of Queensland’s economy today To construct the Queensland baseline, space industry Revenue it is first necessary to understand the The size of Queensland’s space industry Based on Deloitte Access Economics’ economic contribution of the global and was estimated based on IBIS World, calculations, the Queensland space national space industries. industry intelligence and Australian industry’s revenue is approximately $760 Bureau of Statistics data using a ‘top million in 2018-19, representing around As discussed in chapter 3, the global space down’ method. This approach cuts down 15% of the national space industry. A industry was estimated to be worth in Queensland revenue based on the revenue detailed analysis of industry revenue is the order of US$340-$US350 billion in generated by each segment of the national 31 shown in Chart 7.1 (overleaf). 2016. Using the CGE modelling space space industry in 2018-19. sub-sectors: Value added •• The largest component of the The activities listed in each segment of Based on Deloitte Access Economics’ space industry based on current the space industry (referred to in Figure 7.2) calculations, the Queensland space global estimates is the satellite are aligned to the Australian New Zealand industry’s value added is approximately communications sub-sector. The global Standard Industry Classification (ANZSIC) $500 million in 2018-19. satellite sub-sector doubled in the 10 2006, where practical to do so. Shares years to 2016.32 to allocate national industry revenue are Employment based on Queensland employment data by Based on Deloitte Access Economics’ •• The direct-to-home TV sub-sector was industry and place of work - 2016 Census calculations, the Queensland space valued at US$100 billion. of Population and Housing. Queensland’s industry employed approximately 2,000 •• The global navigation satellite systems share of national earth observation and in 2018-19. (GNSS) market (within earth observation), ground station infrastructure operations including chipsets and location services, revenue is based on research conducted Analysis of key space sub-sectors was valued at US$85 billion. by IBIS World. The share of revenue from highlights that Queensland ‘other activities’ is an average of other •• The satellite ground equipment market currently has comparative strength industry segments given the products and (within space technology manufacturing), and cluster of activity in space services produced by this segment (e.g. which is mostly consumer equipment, technology manufacturing space related research). was valued at US$60.8 billion. which is driven by Queensland being home to a strong cluster The revenue of the national space These shares are used to estimate of aerospace businesses as industry is estimated to be in the range Queensland revenue for each segment well as defence (including of $4 billion to $5 billion – for example, of the national space industry. Boeing with around one third of IBIS World has a revenue estimate of Value added and employment are derived national employment in aircraft $5.1 billion in 2018-19 while ACIL Allen using Queensland industry revenue and manufacturing and repair services has an estimate of $4 billion in 2015.33 national benchmarks based on IBIS World in Queensland based on the latest Nationally, the composition of the space research (2018). ABS census). industry follows global trends, with the main sub-sectors currently being satellite This is in line with the findings communication and direct-to-home TV – from Queensland Space Economy collectively contributing around 60% of Capability Directory, which found total revenue. that Queensland has strong capability in the space systems sub-sector, which includes activities such as high technology materials, space systems manufacturing and other related goods and services.

55 Chart 7.1 Space industry revenue by sub-sector

$million $2,000 40%

$1,750 35%

$1,500 30%

$1,250 25%

$1,000 20%

$750 15%

$500 10%

$250 5%

$0 0% Satellite Direct-to-home TV Earth observation Space technology Other communications and ground union manufacturing infrastructure operation

Australia Queensland Queensland share (%)

Source: Deloitte Access Economics estimates

7.4 Queensland’s space economy 7.4.1 Assumptions underpinning the In this study of Queensland's space over the next two decades growth forecasts economy, it has been assumed that This section explores the future economic The global space industry has a strong the space industry will grow at around potential of the Queensland space industry. economic outlook and economic 7% over the next five years to 2023-24. As with the estimate of the current forecasters highlight that the industry is From here, the Morgan Stanley growth economic contribution of the industry, in the growth stage of its life cycle and is profile has been adopted for 2023-24 estimates are provided for revenue, value currently growing faster than the economy to 2035-36. While Queensland currently added and employment. as a whole. has a highly specialised space industry, it has the capability and potential to exploit The projections of future economic Over the next five years, the global and the opportunities on offer and capture its potential are based on a number of national space industry is forecast to share of the national and global industry. data and information sources relating grow at around 7% to 8% per annum (on to forecasts of the future of the space average). The initial economic outlook is expected to industry, both globally and nationally. •• Morgan Stanley projects global growth to be driven by the acceleration of investment Assumptions have then been made about average around 8% between 2018-19 and and activities in the space sector both at the implications of these forecasts for 2023-24.34 the government and business level. Beyond this initial 5 years, growth is projected the Queensland space industry, given its •• IBIS World projects revenue growth of to range from 3.5% to 7% per annum on current capabilities and areas for growth. the Australian space industry to average average over conservative growth, medium 7.1% over the same five year period.35 growth and high growth scenarios. Looking further, Morgan Stanley forecasts the growth of the global space sector to range from 3.5% (conservative growth), 5% (medium growth) and to 7% (high growth) over 2023-24 to 2035-36.36

56 Building Queensland's space economy

7.4.2 Projected growth in Queensland’s space industry Queensland’s space industry is expected to surpass the one billion dollar mark by 2036.

Figure 7.3 Summary of potential growth in value added and employment in the Queensland space industry

Direct value added of $750 million 2024 Employment of 2,800 (or an increase of 800 from today)

2029 Direct value added – ranging from $900 million to $1.1 billion Employment – ranging from 3,300 persons to 3,900 persons (or an increase of between 1,300 and 1,900 from today)

Direct value added – ranging from $1.1 billion to $1.7 billion 2036 Employment – ranging from 4,000 persons to 6,000 persons (or an increase of between 2,000 and 4,000 from today)

Source: Deloitte Access Economics estimates

Revenue Economic analysis of Queensland’s space industry indicates that revenue could increase to $1.7 billion by 2036 under the conservative growth case, and up to $2.7 billion over the same period under the high growth case. This represents a doubling in the size of the revenue of the space sector over the long term (the economic outlook of the study), relative to the estimated revenue of the space sector today of circa $760 million. Under the high growth scenario, the industry is projected to be more than triple the size of its estimated turnover in 2018-19 of $760 million to $2.7 billion.

Chart 7.2 Revenue projections for Queensland’s space industry

$m $3,000

$2,500

$2,000

$1,500

$1,000

$500

$0

2019 2021 2023 2025 2027 2029 2031 2033 2035

Conservative growth Medium growth High growth

Source: Deloitte Access Economics estimates

57 Value added Growth in value added for the Queensland space industry is estimated to increase to $1.1 billion by 2036 under the conservative growth case, and reach up to $1.7 billion over the same period under the high growth case.

Chart 7.3 Value added projections for Queensland’s space industry $m $2,000

$1,500

$1,000

$500

$0 2019 2021 2023 2025 2027 2029 2031 2033 2035

Conservative growth Medium growth High growth

Source: Deloitte Access Economics estimates

Employment Employment is expected to grow in line with the expansion of the industry, reaching 4,000 by 2036 under the conservative growth case, and close to 6,000 under the high growth case.

Chart 7.4 Employment projections for Queensland’s space industry

Persons 7,000

6,000

5,000

4,000

3,000

2,000

1,000

0

2019 2021 2023 2025 2027 2029 2031 2033 2035

Conservative growth Medium growth High growth

Source: Deloitte Access Economics estimates

58 Building Queensland's space economy

8 Future scenarios for Queensland’s space economy

59 Growth Scenarios infographic

Sky is not the limit

Growth scenarios Future size for Queensland's in 2036 space economy

Refer to Table 8.3 and Table 8.4 for full results.

2,700 FTEs

1,800 FTEs

24 FTEs annually on average over project life $6B

$3.5B $82 million in NPV over project life

y it y it iv v t i re c u u uct ct u od od r r r st p p a e t igh a infr H : er 1 od o space i M f r : o a 2 t n c e io a c r S a n imp e ic c INPUTS S onom Ec Capital costs: $235 million : – (over the 5 year construction phase) 3 io ar n Operational costs: $23.5 million annually Current Size ce S (or 10% of total capital costs) $500 million GVA 2,000 FTEs $760 million in revenue

60 Building Queensland's space economy

8.1 Overview 8.2.1 Introducing the scenarios The adoption of space enabled services Chapter 7 provided projections for Scenarios are typically thought of in terms – Scenarios 1 and 2 Queensland’s space economy that were of high, medium and low. What does high The expansion of the Queensland space Future size based on growth assumptions for the growth look like in the industry versus low industry has significant downstream in 2036 ‘core’ components of the space economy growth? However, for the purposes of this impacts to a wide range of industries that – while future growth is expected to be analysis, the scenarios are defined by their can exploit space enabled goods, services strong, this is mostly a continuation of initial ‘triggers’ rather than their growth and technologies to achieve efficiencies. the current growth path. This chapter, path. Key industries include: in contrast, uses hypothetical ‘what • Scenario 1 is triggered by a step-change Agriculture if’ scenarios to demonstrate how, as increase in the adoption of space upstream and downstream components of enabled services by industries in Mining the space economy develop, the industry Queensland that can significantly in Queensland could deliver significant benefit from the earth observation and Telecommunications economic benefits. positioning capabilities of the space industry (e.g. agriculture). These Transport and logistics In essence, these scenarios paint a picture purchasers of space enabled services are about what’s possible for Queensland’s still within the space economy (as Construction space economy. explained in Figure 2.2), but reside outside of the ‘core’ space industry that was These scenarios have been constructed Utilities mapped out in chapter 7. based on assumptions which are realistic in nature and, as such, are not beyond the • Scenario 2, like scenario 1, is triggered by The specific productivity benefits for grasp of Queensland. a step-change increase in the adoption each industry are described in detail in of space enabled services, albeit under Appendix C; these are briefly explained For the first two scenarios to come to more conservative assumptions. The below and summarised in Table 8.1 fruition, major changes are required in purpose of this scenario is to provide (overleaf). the understanding of the value of space a sensitivity analysis for scenario 1 enabled services in industries outside to provide an ‘order of magnitude’ Productivity benefits for broadacre of the ‘core’ space industry, and for the third assessment of the potential benefits of the cropping: The use of GNSS by industry scenario to come to development of space adoption of space enabled services (and benefits both the use of inputs (such as infrastructure would be required. These are explore the impact of assumptions on the fuel, labour and materials) and agriculture described below. end results). yields in broadacre cropping. Using an uptake rate of GNSS technology that • Scenario 3 is triggered by the 8.2 The scenarios increases from 40% in 2024 to 65% in 2036 development of space infrastructure. Scenario analysis provides the mechanism (over and above business as usual) leads for exploring ‘what if’ questions about the to a direct benefit ranging from $80 million 8.2.2 Constructing the scenarios economic future of the space industry. How to $110 million per annum over the period The scenarios are modelled using Deloitte does employment in the industry change 2019 to 2036 (net of adoption costs). Access Economics’ CGE model. Each of when existing capability is leveraged and the three scenarios is constructed around Productivity benefits for mining: The opportunities are capitalised on? How ‘shocks’ – with scenarios 1 and 2 reflecting application of GNSS technology in the sensitive is the industry’s growth path to productivity shocks while scenario 3 reflects mining industry generates benefits in changes in demand from other industries a capital shock through the development of the use of inputs such as labour, fuel in Queensland? How does the infrastructure. (through automation of processes) and development of space infrastructure techniques such as precision mining (which change the industry in Queensland? The resultant impacts on the rest of the targets higher quality product give yield Queensland economy are determined By their very nature, scenarios are improvements). The adoption profile is 25% endogenously within the model. generalised and do not precisely in 2024 and increases up to 60% by 2036 capture all aspects of the hypothesised The productivity benefits to (over and above business as usual). This future economic state. They are simply downstream industries (e.g. agriculture, leads to an annual benefit ranging from possibilities. None of the scenarios mining, etc.) are assumed to be $300 to $425 million per annum over the presented in this chapter are inevitable, but additional to those that would have period 2019 to 2036 (net of adoption costs). at the same time they are not unrealistic and implicitly occurred in the base case. provide us with a meaningful place to start discussions about supporting growth in Queensland’s space economy.

61 Productivity benefits for Productivity benefits for construction: This is based on Queensland capturing an telecommunications: When applied to the The benefits of GNSS technology to the increased share of the estimated $10 billion communications sector, GNSS technologies construction sector are demonstrated research and development expenditure over significantly opens up opportunities in this study through the use of machine the next 20 years (or $500 million annually).37 for new products over time. As well as guidance and construction surveying. The More specifically, it is assumed that improving the quality and efficiency of profile of technological uptake increases Queensland captures around 20% of this services delivered by the sector to end to 25% in 2024 and again increases up to expenditure in line with its population share users. The profile of adoption increases 60% by 2036. The benefits (net of the cost (rather than just its share of the national from 60% in 2024 up to 80% by 2036 (over of adoption from 2020 to 2024) range from space industry, which is estimated at around and above business as usual). The benefit $115 to $180 million per annum over the 15%). This additional 5% is assumed to be (net of the cost of adoption costs) ranges period 2019 to 2036. achieved through Queensland leveraging from $50 to $70 million per annum over the off existing capabilities in its space period 2019 to 2036. Productivity benefits for utilities: The manufacturing and aerospace cluster. This benefits of GNSS technology in utilities expenditure is also assumed to be financed Productivity benefits for transport and has been demonstrated across a range of by the Commonwealth Government. logistics: Sustained improvements in the applications to date and in particular the use and application of GNSS technologies precision mapping of assets. The benefits The uptake rates for each of the industries in the transport and logistics sectors for utilities is up to 2.5% of output. The represent the estimated range of will continue benefit both industries in uptake of the technology is 50% in 2024 incremental or additional uptake for each the future. The uptake rate is assumed and increases up to 80% by 2036. The space growth scenario (i.e. relative to to increase from 25% in 2024 up to 60% benefits (net of the cost of adoption from the business as usual projection of the by 2036. The benefits (net of the cost of 2020 to 2024) range from $35 to $60 million Queensland economy). In the business as adoption from 2020 to 2024) range from per annum over the period 2019 to 2036. usual scenario, it has been estimated that $90 to $185 million per annum over the there will be an annual uptake rate period 2019 to 2036. In addition, the modelling assumes that of around 20% across the industries that there is additional spend on research have the potential to benefit the most and development by the Commonwealth from space enabled services in the Government of $25 million per annum. Queensland economy.

Table 8.1 Summary of productivity benefits by adopting industry, Scenarios 1 and 2

Productivity benefit (per annum average over 2019 to 2036) Uptake rate Industry sector Scenario 1: High productivity Scenario 2: Moderate of technology growth productivity growth

Agriculture (Broadacre cropping) Controlled traffic farming, inter-row sowing $110 million $80 million 65% by 2036 and variable rate fertiliser

Mining Autonomous haul trucks and savings $425 million $300 million 60% by 2036 associated with GNSS technologies

Telecommunications $70 million $50 million 80% by 2036 Asset management and network planning

Transport and logistics $185 million $90 million 60% by 2036 Fleet management and port container management

Construction $180 million $115 million 60% by 2036 Construction surveying and machine guidance

Utilities $60 million $35 million 80% by 2036 Asset mapping

Source: Deloitte Access Economics calculations Notes: Implemented in the modelling as total factor productivity shocks. The productivity benefits and uptake rates of technology are incremental to the business as usual case.

62 Building Queensland's space economy

Development of space infrastructure – Table 8.2 Summary of capital and operational costs, Scenario 3 Scenario 3 Scenario 3 considers the potential economic Industry sector 2019–23 2024–36 impact of the development of space Capital costs infrastructure in the launch activities and $235 million (over the 5 year ground systems sub-sectors of construction phase) Queensland’s space economy. Such as a rocket launch facility or a major satellite communications park (noting the Operational costs $23.5 million annually (or 10% establishment of a launch facility in Australia of total capital costs) or total would require national coordination). of over $300 million increase Launch and ground system capabilities were in space sector output identified by the industry as key catalysts for future growth in Queensland’s space Source: Deloitte Access Economics calculations; Manicaros, 2017 economy. These capabilities will support Queensland's space industry to actively participate in the global supply chain.

As there is not currently a commercial 8.3 Scenarios 1 and 2 | Adoption of launch facility in Australia, there is not a space enabled services readily available benchmark for the capital The two adoption scenarios are reported and operational expenditure required to jointly to demonstrate the range of potential establish such a facility. The best available economic benefits derived from increasing information source is the current proposal the adoption of space enabled services by for the Arnhem Space Station, located in the key industries in Queensland. The larger Northern Territory – the proposal is to impacts are the result of the assumptions construct and operate multiple launch sites underpinning the high productivity scenario providing sub-orbital and orbital access for (Scenario 1), while the more moderate commercial, research and government impacts are the result of the assumptions organisations. The establishment underpinning the moderate productivity of a launch facility in Australia would scenario (Scenario 2). require coordination by the Australian Space Agency. The modelling indicates that the Queensland economy could increase The space infrastructure has (above the base case) by between $3.5 an estimated cost of $235 million. It is billion and $6 billion in present value assumed that the ongoing operational (PV) terms using a 7% real discount rate expenditure will be in the order of 10% of over the period 2019 to 2036. By 2036, costs of development. A summary of the gross state product (GSP) could grow in direct shocks for Scenario 3 is presented the order of between $650 million to $1.15 in Table 8.2. billion above the base case (see Chart 8.1).

These results highlight the critical role space enabled services can play in The Queensland space industry Queensland’s economy. These results has experienced strong growth also highlight that even under moderate and this is expected to continue productivity assumptions, the adoption going forward. In this study, it has of space enabled services by other been assumed that the medium industries will deliver economic growth scenario presented in dividends for Queensland. Chapter 7 represents the base case (or business as usual). The results for each of the three scenarios represent the incremental impacts above and beyond the base case.

63 Gross State Product The path of real gross state product (GSP) shows these benefits do take time to translate into material economic benefits (i.e. there is a lag) as industries gradually begin to adopt these technologies at a higher rate. Furthermore, in the first five years there is a direct cost to adopting industries of implementing space enabled services, and this dampens the GSP impacts. Higher GSP impacts are evidenced beyond this period through the flow-on effects stemming from direct productivity improvements.

Chart 8.1 Impacts on Queensland Gross State Product, Scenarios 1 and 2

$m 1,400

1,200 Scenario 1: High productivity 1,000

800

600 Scenario 2: Moderate productivity 400

200

0 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036

Source: Deloitte Access Economics estimates

The percentage deviations in real GSP put the impacts into context compared to the size of the Queensland’s economy (Chart 8.2). The impacts (following higher adoption in 2024) range from around 0.13% to around 0.23% of real GSP in Queensland.

Chart 8.2 Impact on Queensland Gross State Product, % change in real GSP, Scenarios 1 and 2

Employment 0.25

Scenario 1: High productivity 0.20

0.15

0.10

Scenario 2: Moderate productivity 0.05

0 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036

Source: Deloitte Access Economics estimates

64 Building Queensland's space economy

Employment The employment impacts are driven by The percentage deviation in real aggregate The potential employment generated the increased productivity (scale effect) employment highlights that employment by the activity is estimated to range achieved in a number of industries across increases by 0.05 % in 2024, and up to from 1,800 to 2,700 full time equivalent the Queensland economy and a similar 0.16% in 2036 under the high productivity (FTE) jobs (in average annual terms) over profile is observed for employment (as for scenario. The increase in employment the period 2019 to 2036. By 2036, FTE gross state product) where the impacts growth is lower than the increase in real employment could increase in cumulative start to ramp up from 2024 and beyond as GSP growth, which is partially due to the terms by between 3,300 and 4,900 FTE the productivity benefits are realised to a impacts of productivity. jobs above the base case (see Chart 8.3). greater extent.

Chart 8.3 Impact on Queensland Full Time Equivalent (FTE) employment, Scenarios 1 and 2

Employment 6000

5000 Scenario 1: High productivity

4000

3000

Scenario 2: Moderate productivity 2000

1000

0 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036

Source: Deloitte Access Economics estimates

65 Industries While there are some positive spillover In addition, as the key industries become There is an increase in activity across impacts outside the adopting industries, more efficient, they may require fewer a number of industries in the Queensland some other Queensland industries inputs – such as purchases from other economy; particularly those that experience crowding out – including rest industries – which could potentially reduce utilise space enabled services (see of manufacturing, rest of agriculture and the demand for some upstream industries. Chart 8.4). These industries include the non-space component of advanced The negative deviation shown for some broadacre cropping, mining, utilities, manufacturing and aerospace and defence. industries does not necessarily imply construction, transport and logistics that the industry is projected to contract. and communications. In addition to the This result largely reflects the fact Rather, it indicates that, relative to the base industries that benefit directly, there that these industries are not directly case, it is simply not growing as fast. are also positive spillover effects to targeted in the scenario and therefore are other related industries including trade, relatively less efficient compared to the key Though there are decreases in output communications and other services industries exploiting space enabled services. across some industries, the additional (includes finance, professional and activity due to the adoption of space business services). In addition, activity enabled services has positive impact in in the space industry is stimulated, as aggregate for the Queensland economy. downstream users induce further demand for space enabled services.

Chart 8.4 NPV of impact on Queensland industry output, 2019 to 2036, Scenarios 1 and 2

All other services

Communications

Space

Finance, professional & business services

Transport

Trade

Construction

Utilites

Rest of manufacturing

Scenario 1: High productivity Advanced manufacturing (non-space)

Scenario 2: Moderate productivity Aerospace and defence (non-space)

Mining

Rest of agriculture

Broadacre cropping

-2000 -1000 0 1000 2000 3000 4000

$m Source: Deloitte Access Economics estimates

66 Building Queensland's space economy

Summary A summary of the economy-wide impacts of these two scenarios highlight the significant potential economic impacts of future growth and development of the space industry to the Queensland economy (refer Table 8.3).

Table 8.3 Summary of economy-wide impacts for Scenarios 1 and 2 (incremental to the base case)

Scenario 1: High productivity Scenario 2: Moderate productivity

Gross state product $6 billion $3.5 billion

FTE employment 2700 FTE jobs 1800 FTE jobs

Industry output

Space $400 million $270 million

Broadacre cropping $1.2 billion $680 million

Mining $3.6 billion $2.6 billion

Telecommunications $660 million $460 million

Transport and Logistics $1.7 billion $810 million

Construction $1.4 billion $1 billion

Utilities $550 million $340 million

Source: Deloitte Access Economics Notes: Gross state product and industry output are presented in NPV terms using a real discount rate of 7% over the period 2019 to 2036 and FTE employment is presented in average annual terms over the same period.

67 8.4 Scenario 3 | Table 8.4 Summary of economy-wide impacts for Scenario 3 (incremental to the base case) Space infrastructure Total project Construction Operations phase This scenario considers the “order of (2019-36) phase (2019-23) (2024-36) magnitude” economy-wide impact of the development of space infrastructure – $82 million (in NPV $9m (annually $7m (annually on of a similar magnitude to the proposed Gross state terms over the on average over average over the Arnhem Space Centre in the Northern product total project) the construction operations phase) Territory – to the Queensland economy. phase)

The modelling estimates show that 24 FTEs (annually 57 FTEs (annually 12 FTEs (annually such a project has the potential to grow FTE on average over on average over on average over Queensland’s GSP by around $82 million employment the total project) the construction the operations over the period 2019 to 2036 (see Table phase) phase) 8.4. Over the construction phase, GSP Source: Deloitte Access Economics increases by around $9 million in annual Notes: Gross state product and industry output are presented in NPV terms using a real average terms over the 5 years from 2019 discount rate of 7% over the period 2019 to 2036 and FTE employment is presented in to 2023. These impacts would also be average annual terms over the same period. supported over the operations phase by associated operating expenditure in the space industry – $7 million annually, on The Queensland space infrastructure The broader economic value of average, over the period 2024 to 2036. scenario (scenario 3) only captures the launch and ground system capabilities in Queensland The project would also potentially result in direct indicative expenditure and associated an additional 24 FTEs annually on average supply chain impacts (in the form of a capital The broader economic value of launch across the Queensland economy over the shock). It does not capture the dynamic and ground capability in Queensland entire project (Table 8.4. Over the 5 year effects of downstream productivity gains, or elsewhere in Australia, is not derived construction phase, the annual average such as those experienced by agriculture, from the construction and operation of number of FTEs created is 57. As the mining etc.(the indicative impacts of these space-related infrastructure alone. construction phase slows down, ongoing productivity shocks are explored separately When combined with Queensland’s operations would support an annual in scenarios 1 and 2). existing competitive advantages, the average of 12 FTEs. 8.5 Summary of the economic broader economic value of both launch and ground system capability is the The space infrastructure scenario generates modelling potential for Queensland to develop a relatively modest impact compared to the In summary, this economic modelling study: world class launch supply chains – broader productivity benefits from the •• Estimates the current and future direct i.e. the dynamic effects generated by application of space related technologies to size of the space industry in Queensland, deepening scale and broadening the Queensland economy. the scope of the sub-sectors. This would with a focus on key economic metrics enhance the development of an such as industry value added and The key industries stimulated by such advanced manufacturing supply chain, a project in direct terms include the employment and also a breakdown with productivity spill over effects into the construction industry, as well as the space across the key sub sectors that comprise state’s other major industries sector through the accumulated capital stock the space industry in Queensland. (e.g. agriculture, mining). and operational expenditure to support •• Identifies the range of productivity The potential benefits of developing ongoing operations. Direct value added in benefits by industry from increased space infrastructure whether in the construction and space sectors are adoption of space enabled services over Queensland or elsewhere in Australia, estimated to grow by $60 million and $70 the medium to long term in Queensland. should be weighed against the costs million respectively in NPV terms over the •• Highlights the range of economic and risks, including customer and market period 2019-36. There are also some small impacts for medium and high expansion demand, which are beyond the scope of flow on impacts to other related industries, this report. Who leads and pays for the scenarios which are linked to different however, these are minimal given the infrastructure is also beyond this report’s future potential adoption rates of space relatively small direct shocks in this scenario. scope. enabled services across the economy and measured relative to a business as usual The Queensland launch and ground projection for the Queensland economy. systems infrastructure scenario (scenario 3) captures the direct indicative expenditure and associated supply chain impacts (in the form of a capital shock). However, it does not capture the downstream productivity gains, such as those experienced by agriculture, mining 68 etc., as these productivity shocks are explored separately in scenarios 1 and 2. Building Queensland's space economy

PART THREE | REFLECTIONS

The following chapter presents the key reflections on the capability of the Queensland space economy and the future path of the industry. 69 Sky is not the limit

9 Reflections

70 Building Queensland's space economy

9.1 Overview Niche, but globally competitive “The exploration of In reviewing the capability of Queensland’s Development of the Queensland space space economy, it is apparent that the economy has been driven by select space will go ahead, future of Queensland’s space industry is industry leaders whose expertise and strong but also fragile. This is an industry space related activities have led to the whether we join in where connections matter, where clustering of globally competitive space reputations matter and where entrenched capabilities. These organisations have it or not…” competitive advantages arise as the result driven the growth of dispersed capability across the space supply chain: research of decades of investment in specialised – John F. Kennedy capability – this is not an industry that has and development, launch activities, space been, or can be, built overnight. systems and space enabled services.

Queensland is fortunate that decisions A unique opportunity is presented Key takeaways made decades ago have fostered the for Queensland to develop a more •• Queensland’s economy can benefit conditions to develop an industry ripe mature space ecosystem, where upstream from growth in the space economy for growth. and downstream players have a co- ordinated approach to competing in the •• Today, Queensland has a niche but Yet, there are significant competitive global supply chain. Noting that while globally competitive industry, with pressures which can lure a not insignificant organisations in Queensland’s space strong research partners, and this part of the industry away from Queensland. economy are highly collaborative, growth is likely to remain the situation into will require increased representation of the future. The question remains; what is needed Queensland’s capabilities and competitive today to ensure that the opportunities advantages on an international platform •• There are significant opportunities and ambitions for the space economy to remain relevant in the commercially for future growth in the space are realised? driven global space economy. economy given Queensland’s current capabilities. Where to next? It takes time •• Development of the space industry The Queensland space economy has The significant opportunities for growth in takes time, patience and meaningful ambitions – ambitions to grow the space economy, given Queensland’s investments in human and physical and ambitions to be globally recognised. current capabilities, is well documented. capital. These ambitions are credible, but are also It is important to note, however, that the grounded in the reality that Queensland is development of any space industry takes •• The (increased) adoption of space a small player in a large global supply chain. time, patience and meaningful investments enabled services by Queensland’s The opportunities arise, however, not in in human and physical capital. In this traditional strengths can support competing with the entrenched regard, the development of Queensland’s growth in the space economy. agglomerations in the likes of the US, China space economy will also take time and the and Europe; but instead in continuing to right strategic investments. The key to the develop niche, globally competitive, high development of the sector is the need to value added goods and services that can develop the supply chain, anchor businesses be traded with the world. to Queensland and generate demand for the space industry supply chain. In this regard, the small size of the Queensland’s industry today is a strength – organisations across Queensland’s space economy are actively collaborating with each other, building specialised research capability to support commercial organisations and building commercial organisations out of specialised research capability. But more can be done to enhance collaboration and develop the industry strategically.

71 Strong fundamentals Fight for talent Key gaps Strengths present themselves at both The highly specialised nature of the space ends of Queensland’s space supply chain. industry makes it difficult to attract senior • Highly mobile workforce, Queensland’s strong fundamentals of and experienced talent – and difficult to in reference to the availability manufacturing, mining and engineering retain junior talent in Queensland. Given of human capital associated with capabilities are well-positioned to the global scale and scope of the industry, the highly specialised nature of support upstream industries. Yet, with working visas play an important role in the industry. competitive pressures across Australia addressing challenges around finding • Absence of physical infrastructure and globally, space focussed organisations appropriate talent in the industry. to enhance key sub-sectors in Queensland can easily be lured away which anchor the space economy without strong economic and commercial It is clear that the passion for space starts supply chain. reasons to remain in Queensland. young but requires significant skills and experience to flourish and contribute to the Further downstream, Queensland’s space industry in Queensland. There are agriculture, mining and logistics industries, sound education and research platforms to name a few, are the sectors set to in Queensland, which result in the skilling benefit from growth in sub-sectors such as up of Queenslanders – noting junior talent space enabled services. leave to gain overseas experience. A strong space industry in Queensland will see Queensland’s geographic location presents some of these people return and attract a unique competitive advantage that could others from overseas seeking experience be leveraged establish supporting in Australia. This flow of expertise is likely to infrastructure for the launch activity and be a defining feature of the space industry ground systems sub-sectors. in Australia.

Growing the pie, and sharing Building space the benefits While location agnostic industries often The potential spillovers from space find it difficult to create the natural cluster technology and research endeavours are of activity required to grow an industry; the broadening in scope and application across space economy is characterised by high the economy. The economic modelling capital infrastructure investment, highly highlights that this has an important specialised expertise and long lead times. contribution to make to Queensland’s The physical infrastructure required by economy. In particular, the adoption of organisations operating within the space space enabled services by Queensland economy could enhance the growth of a industries sitting outside the core space space ecosystem. industry has shown itself as an area for – potentially large – growth, with the economic dividends shared across Queensland’s economy.

72 Building Queensland's space economy

Role of Government In Queensland, this raises consideration •• Ensuring the optimisation of skills Australia, and its states and territories, of several points: development in Queensland will have not had the same history of long-term Regulatory responsibility provide an important platform for government investment in space as other •• The role of regulation and legislation the space industry and its development international jurisdictions. remains firmly in the purview, and in Queensland. control, of Government. This control • Government facilitation of higher The history of development in the global • may not necessarily sit with a state adoption rates of space related space industry has been financed and government – such as visa requirements technologies in other sectors (via managed by government. International or import restrictions for chemical an alignment of the Queensland space agencies have dominated the components – but understanding Government’s priority industry sectors) agenda and driven strategy – with the regulatory barriers and constraints will enhance the benefits for the high entry costs and risks associated with impacting the Queensland space Queensland. the space industry dictating considerable industry’s development, will be important government involvement. for Queensland. Physical infrastructure • The clustering of physical infrastructure This is known to be changing – and fast. •• The regulation associated with and know-how (people) can enhance the The trend towards decentralisation of approval processes for launch activities development of the space sector. Such activity out of government and into the can be an important element in clustering can lower transaction costs private sector has spurred growth in the enhancing or detracting from the and enhance collaboration through commercial components of the supply competitive position of Queensland in joint ventures, access to research, and chain. The global space economy today the global space market. shared platforms. is characterised by an increasing number of private organisations and investors – Facilitation rather than funding • Physical infrastructure can, in some and so too will Queensland’s growing •• Space activity is highly interdependent; instances, act as the catalyst for space space industry. meaning relationships are critical activity to grow at a rapid rate. to success. An identified role for The changing nature of space activities government is in facilitating, and and the growth of non-traditional space matching, such relationships – both actors requires consideration be given to domestically and globally. the appropriate role of governments in •• Growth in the capability across emerging space economies. Queensland’s supply chain will also rely on the ability of the organisations operating in the core space industry to reach out to industries with transferrable skills. How government can assist space organisations to navigate Queensland’s well established industries to locate critical expertise is an opportunity.

73 Sky is not the limit Department of State Development, Manufacturing, Infrastructure and Planning

Appendices

74 Building Queensland's space economy

Appendix A Capability directory

75 This Appendix provides the full directory that is summarised in chapter 4. Component and Material Supply Satellite Owner/ Operator Space Qualified Testing and Facilities Space Subsystem Supply System Engineering and Technical Support Component and Subsystem Management Launch Services Launch Support Services Launch Vehicle Manufacturing and Assembly Antenna/Ground Station Component or Material Supplier Ground Segment Prime/ System Integration Ground Segment Subsystem & Equipment Supplier Prime/System Integration System Engineering and Technical Support Services Tracking, Telemetry & Command Operations Earth Observation Services & Applications Satellite Communications Service Providers Satellite Navigation Service & Applications Technical Support Services User Equipment Manufacturer User Equipment Suppliers Consultancy Services (e.g. IT, analytics, professional services) Financial Services Legal Services Ancillary Services R&D Education and Training Other Transport, logistics and construction General component, material, engineering supply Private Company Absolute Data Group Pty Ltd ü Active Electronics Plc. ü AECOM ü BDGT Precision Engineering ü Beaudesert and Boonah ü Cranes Black Sky Aerospace ü Boeing ü CG Composites Australia ü Pty Ltd Coastal Aviation Pty Ltd ü CSE ü Datellite Pty Ltd ü DigitalGlobe ü DNA Anodising ü EM Solutions Pty Ltd ü Fluid Seals Pty Limited ü Frequentis Australasia ü Gasket Solutions Pty Ltd ü Geospatial Intelligence Pty Ltd ü Gilmour Space Technologies ü Goonhilly Earth Station ü GPA Engineering ü Hillier Engineering Services ü Honeywell Ltd ü Hypersonix Pty Ltd ü IDS Australasia ü Integrated Training And ü Documentation International Aerospace Law & Policy Group (Australia's Air & ü Space Lawyers) Keysight Technologies Australia ü Pty Ltd Laser Central Pty Ltd ü Madison Sport Pty Ltd ü Mastercut Technologies Pty Ltd ü Metromatics Pty Ltd ü Milspec Services Pty Ltd ü Miniature Bearings Australia ü Moody Space Centre ü National Plastics & Rubber ü Pty Ltd Northrop Grumman ü Northrop Grumman Australia ü Nova Group ü Ozius ü Peoplesafe Consulting ü

76 Building Queensland's space economy Component and Material Supply Satellite Owner/ Operator Space Qualified Testing and Facilities Space Subsystem Supply System Engineering and Technical Support Component and Subsystem Management Launch Services Launch Support Services Launch Vehicle Manufacturing and Assembly Antenna/Ground Station Component or Material Supplier Ground Segment Prime/ System Integration Ground Segment Subsystem & Equipment Supplier Prime/System Integration System Engineering and Technical Support Services Tracking, Telemetry & Command Operations Earth Observation Services & Applications Satellite Communications Service Providers Satellite Navigation Service & Applications Technical Support Services User Equipment Manufacturer User Equipment Suppliers Consultancy Services (e.g. IT, analytics, professional services) Financial Services Legal Services Ancillary Services R&D Education and Training Other Transport, logistics and construction General component, material, engineering supply Private Company Absolute Data Group Pty Ltd ü Active Electronics Plc. ü AECOM ü BDGT Precision Engineering ü Beaudesert and Boonah ü Cranes Black Sky Aerospace ü Boeing ü CG Composites Australia ü Pty Ltd Coastal Aviation Pty Ltd ü CSE ü Datellite Pty Ltd ü DigitalGlobe ü DNA Anodising ü EM Solutions Pty Ltd ü Fluid Seals Pty Limited ü Frequentis Australasia ü Gasket Solutions Pty Ltd ü Geospatial Intelligence Pty Ltd ü Gilmour Space Technologies ü Goonhilly Earth Station ü GPA Engineering ü Hillier Engineering Services ü Honeywell Ltd ü Hypersonix Pty Ltd ü IDS Australasia ü Integrated Training And ü Documentation International Aerospace Law & Policy Group (Australia's Air & ü Space Lawyers) Keysight Technologies Australia ü Pty Ltd Laser Central Pty Ltd ü Madison Sport Pty Ltd ü Mastercut Technologies Pty Ltd ü Metromatics Pty Ltd ü Milspec Services Pty Ltd ü Miniature Bearings Australia ü Moody Space Centre ü National Plastics & Rubber ü Pty Ltd Northrop Grumman ü Northrop Grumman Australia ü Nova Group ü Ozius ü Peoplesafe Consulting ü

77 Component and Material Supply Satellite Owner/ Operator Space Qualified Testing and Facilities Space Subsystem Supply System Engineering and Technical Support Component and Subsystem Management Launch Services Launch Support Services Launch Vehicle Manufacturing and Assembly Antenna/Ground Station Component or Material Supplier Ground Segment Prime/ System Integration Ground Segment Subsystem & Equipment Supplier Prime/System Integration System Engineering and Technical Support Services Tracking, Telemetry & Command Operations Earth Observation Services & Applications Satellite Communications Service Providers Satellite Navigation Service & Applications Technical Support Services User Equipment Manufacturer User Equipment Suppliers Consultancy Services (e.g. IT, analytics, professional services) Financial Services Legal Services Ancillary Services R&D Education and Training Other Transport, logistics and construction General component, material, engineering supply PFi (Products for Industry) ü R.F.Technologies Aust Pty Ltd ü Shapecut Pty Ltd ü Solvay Interox Pty Ltd ü SpaceTech International ü Studio Kite ü Swagelok Eastern Australia ü Syndetic ü Teakle Composites ü Temperature Controls ü Voestalpine High Performance ü Metals University/Research Organisation Bond University ü Centre for Agricultural Engineering, University ü of Southern Queensland CSIRO ü Commonwealth Scientific and Industrial Research ü Organisation (CSIRO) Earth Observation Australia and Remote Sensing Research ü Centre, University of Queensland Griffith University ü Juxi Leitner (Individual) ü Queensland University of ü Technology University of Southern Queensland - Institute for ü Advanced Engineering and Space Sciences University of Southern Queensland - Centre for ü Astrophysics University of Southern Queensland - School of Civil ü Engineering & Surveying USQ ü Government Enabler to provide Office of Economic support Development, Ipswich City to SMEs developing Council innovative products Industrial Organisation

Advocacy and development SIAA of the industry in Australia Other Electrotraders ü James Dickson ü

78 Building Queensland's space economy Component and Material Supply Satellite Owner/ Operator Space Qualified Testing and Facilities Space Subsystem Supply System Engineering and Technical Support Component and Subsystem Management Launch Services Launch Support Services Launch Vehicle Manufacturing and Assembly Antenna/Ground Station Component or Material Supplier Ground Segment Prime/ System Integration Ground Segment Subsystem & Equipment Supplier Prime/System Integration System Engineering and Technical Support Services Tracking, Telemetry & Command Operations Earth Observation Services & Applications Satellite Communications Service Providers Satellite Navigation Service & Applications Technical Support Services User Equipment Manufacturer User Equipment Suppliers Consultancy Services (e.g. IT, analytics, professional services) Financial Services Legal Services Ancillary Services R&D Education and Training Other Transport, logistics and construction General component, material, engineering supply PFi (Products for Industry) ü R.F.Technologies Aust Pty Ltd ü Shapecut Pty Ltd ü Solvay Interox Pty Ltd ü SpaceTech International ü Studio Kite ü Swagelok Eastern Australia ü Syndetic ü Teakle Composites ü Temperature Controls ü Voestalpine High Performance ü Metals University/Research Organisation Bond University ü Centre for Agricultural Engineering, University ü of Southern Queensland CSIRO ü Commonwealth Scientific and Industrial Research ü Organisation (CSIRO) Earth Observation Australia and Remote Sensing Research ü Centre, University of Queensland Griffith University ü Juxi Leitner (Individual) ü Queensland University of ü Technology University of Southern Queensland - Institute for ü Advanced Engineering and Space Sciences University of Southern Queensland - Centre for ü Astrophysics University of Southern Queensland - School of Civil ü Engineering & Surveying USQ ü Government Enabler to provide Office of Economic support Development, Ipswich City to SMEs developing Council innovative products Industrial Organisation

Advocacy and development SIAA of the industry in Australia Other Electrotraders ü James Dickson ü

79 Sky is not the limit

Appendix B Capability assessment matrix – detail

80 Building Queensland's space economy

Further to Chapter 4, the following details the individual capability assessments for the space economy. Queensland’s capability was assessed for the following sub-sectors: •• Space Systems •• Launch Activities •• Ground Systems •• Space Enabled Services •• Ancillary Services •• Research and Development •• Education and Training

Space systems

Natural/ Physical Human Capital Demand Supply DAE Commentary Geography

N/A Moderate Limited Moderate Limited

N/A •• Largest identified •• Organisations •• 10 of the 16 •• None of the •• The organisations sub-sector by typically employ organisations organisations in that responded organisations in the 1-19 employees, exported their the sub-sector to the survey in short survey (16) however 6 of the products in the consider space their the space systems suggests there is organisations last 12 months. primary industry sub-sector do not adequate physical employed 20-199 This reflects strong of operation. consider space their infrastructure employees, which international Therefore, primary industry available for the suggests there is demand for organisations are of operation. sub-sector to a strong market products and unlikely to have Organisations participate in in Queensland for moderate/limited difficulty sourcing typically have both national labour from which national demand the appropriate capabilities in and international the sub-sector is inputs for their Defence and markets able to draw upon operations. Aerospace and as, such have •• Organisations were •• There are a •• However, the rating necessary inputs spread across three large number of reflects the limited and expertise key capabilities organisations who supply of products/ to enable them –– Component and have managed to services which are to provide their material supply find the necessary directly related to products/services (13) labour to sustain space. as required. –– Space subsystem their activities – However, the size of supply (1) growth does not the space economy –– System appear to be limited in Queensland Engineering and by the availability of means they provide Technical Support expertise their products/ (2) services to different •• Of the 13 industries and component and international material supply markets. Growth organisations, the in the local space majority (6) earned industry would in the $2-5M range encourage growth and the majority (8) in this sector. also exported their products/services internationally

81 Launch activities

Natural/ Physical Human Capital Demand Supply DAE Commentary Geography

Strong Limited Limited Moderate Limited

•• Queensland’s •• No test/launch •• Difficulty hiring due •• Developing •• Gilmour have built •• Whilst we do not proximity to facilities in to inappropriate national market almost all of their have a significant the equator (27 Queensland skills – organisation as evidenced by suborbital rocket in number of degrees) responded ‘No’ & the ability to find Queensland organisations in •• Queensland has 2 ‘Yes’ appropriate Human this sub-sector, the •• Available land close highly specialised •• Some chemicals Capital to operate. organisations that to the equator organisations with •• Organisations Black Sky had to However, sub- do participate have private launch reflected a broad get in •• Unused airspace sector is limited by industry leading facilities range of employees close to the equator regulatory issues •• Propulsion creates capability –– Including the only – including 1-19, and lack of launch issues – companies •• Ability to do both civilian sub-orbital 20-199 and 200+ •• Sources include facilities. need to source polar and equatorial launch site in survey 1, survey 2 •• The sub-sector hydrogen peroxide Australia •• Size, turnover and Queensland orbits draws heavily from internationally and lack of export Parliamentary •• 5 organisations the Professional, suggests there is •• Currently also Inquiry transcripts participating in the Scientific and unmet demand at restricted by launch sub-sector Technical Services present regulatory burdens –– Component sector in the and Subsystem economy for inputs •• The sub-sector management (1) draws heavily from –– Launch Services the Manufacturing (2) sector in the economy for inputs •• The sub-sector cannot source ‘particular rocket motor chemicals’ from Queensland (they source this from the USA/China) •• The main reasons they purchase from outside of Queensland is because they have highly specialised product/ services that are not available in Queensland (and are better quality elsewhere)

82 Building Queensland's space economy

Ground Systems

Natural/ Physical Human Capital Demand Supply DAE Commentary Geography

Strong Limited Limited Moderate Limited

•• Queensland’s •• Organisations have •• As several •• All organisations •• There is a strong •• Several of exposure to capability in: ground segment export their international market the entities in equatorial orbits, –– Antenna/ organisations are products/services which is driving the Queensland’s and ability to track Ground Station large multinationals, exports of the sub- ground systems spacecraft travelling Component or they have high sector sub-sector are over the Indian and Material Supplier employee ranges large multinational •• Some difficulty filling Pacific Oceans –– Prime/System – the majority organisations that in this sub-sector as Integration selected 200+ have significant •• Well positioned to incomplete survey –– Ground Segment employees presence in support satellite filling out from Prime/System Queensland, launch services as •• Difficulty hiring due organisations in the Integration Australia and large open spaces to inappropriate sub-sector internationally. They with significant •• Whilst organisations skills – organisations also typically have uninhabited in the sub-sector responded ‘No’ presence across landmass close to have capability •• Boeing in the several areas of the the equator and in operating and inquiry indicated space economy, flight paths over the using technology that there were not and interact with associated with ocean enough individuals several research ground systems, around that would institutions. there exists little allow for the ownership; the •• Organisations necessary growth sub-sector is reliant are primarily in the industry to on transferrable contributing to occur skills/expertise from inputs and technical the manufacturing •• Australia’s long services/support sector history in the sector required by the also means there is sub-sector rather •• Organisations are significant capability than growth being primarily suppliers, across the nation driven from the technical support (whilst some of this presence of physical or operational might not be based infrastructure. which limits in Queensland) growth potential in downstream applications

83 Space Enabled Services

Natural/ Physical Human Capital Demand Supply DAE Commentary Geography

N/A Moderate Moderate Moderate Moderate

N/A •• The sub-sector •• Constraints to •• Constraints to •• The sub-sector •• Mature capability has access to growth recognised growth reflect the relies heavily on exists, however satellites, ground the lack of a skilled lack of an Australian the Information, this is not being stations, telescopes, workforce in the market for the Media and exploited to its supercomputers, required fields. products/services Telecommunications full extent nor by cloud storage that All organisations the sub-sector sectors in the a large number of are required to reflected that provides Australian economy organisations operate they had difficulty •• Organisations also •• Organisations •• There exists a ‘ready hiring due to recognised that reflected that made downstream inappropriate skills there are challenges major purchases market’ for space accessing were made from enabled services in international countries such as Queensland. There markets due to the UK, EU and presence of mature ‘international the US – which capability in the geopolitical trade were relevant to Agriculture, Mining, relations’ satellite imagery Manufacturing and software and and Professional, •• For organisations advanced cloud Scientific and who participate computing Technical Services in the sub-sector, firms it is primarily the •• Primary reason ‘core of business organisations operations’ purchase products/services •• The majority of from outside organisations of Queensland export their is because the products/services product/service •• Some organisations they require is have turnover range not available in greater than $10M Queensland and is •• Significant growth highly specialised in potential exists for nature applications across many industries that rely on data driven intelligence

84 Building Queensland's space economy

Ancillary Services

Natural/ Physical Human Capital Demand Supply DAE Commentary Geography

N/A N/A Limited Limited Limited

N/A N/A •• Breadth of skill •• As the space •• As the sub-sector •• There is strong required across economy in is entirely reliant potential for Ancillary Services Queensland is still on the growth and growth in line with is limited by the developing – there size of the space growth in the space size of the space is limited, but economy, the sub- economy economy for which growing demand for sector relies on •• Symmetries exist they would supply specialised Ancillary other sectors for its with sectors such services Services primary operations as Defence, Mining (such as Mining •• However, there •• It is anticipated and Professional, and Professional, does exist unique that as the space Scientific and Scientific and capabilities that economy grows, so Technical Services Technical Services) are engaged in the too will the demand which will enable existing activities of for the relevant •• There do exist a skills to be the space economy supporting services, few select bespoke transferred to such as legal advice space legal/ satisfy demand as it consulting services. may arise •• There are However, this largely however a few key reflects the maturity organisations who of the broader are experienced space economy in sectors of the economy with symmetries (such as Defence and Mining) which earn large returns for their expertise

85 Research and Development

Natural/ Physical Human Capital Demand Supply DAE Commentary Geography

Moderate Moderate Moderate Moderate Limited

•• Geographic •• Significant high- •• There exists unique •• The sub-sector •• Whilst there does •• The sector is advantages such cost infrastructure capability within the collaborates widely exist industry characterised by as proximity to is required to Queensland R&D across the global leading expertise in high barriers to equator, clear night support industry sub-sector which space economy, as the sub-sector – the entry and high skies and alternative leading R&D – for reflects the size of there is insufficient majority of supply investment costs. time-zones have which Queensland the Queensland national demand of expertise is met In the developing encouraged R&D exhibits some niche space economy for the sector to by the international space economies capabilities in areas capability meet. However, this market of Australia and •• Most of the major such as observation has contributed Queensland, this •• Limited physical Universities in and testing. to the expertise means where infrastructure Queensland engage However, these are of the sub-sector. investment has reflects the size of in differing areas of not critical to the Individuals/ been driven by the space economy the space economy; development of the organisations individuals with in Queensland and and attract industry sector and do not are typically well- niche capability high investment leading expertise – put the Queensland connected and at and expertise. costs associated often collaborating space economy at a the forefront of Small R&D with specific on an international innovation in their ecosystems with distinct advantage. technologies level with leading chosen fields specific capability space agencies •• It is noted however have developed •• It is anticipated that that there does •• Respondents as a result. These the sub-sector will exist world-leading experienced varying pockets of expertise be able to support capability in small degrees of difficulty are well connected growth in the pockets of expertise hiring due lack of to the global space Queensland space which engage skillset – this again economy and are economy; and will in international largely reflects the not limited by continue to grow in collaboration often niche and their geographic line with the rest of highly specialised location. They often the industry nature of many of collaborate widely the areas of interest across the supply chain and have relationships with large multinationals and international space agencies.

86 Building Queensland's space economy

Education and Training

Natural/ Physical Human Capital Demand Supply DAE Commentary Geography

N/A Moderate Moderate Limited Limited

N/A •• Queensland has •• Queensland has •• Demand for •• There is limited •• Education and several large, world several large, world Education & supply of Education Training that is class education class education Training is required & Training specific to specifically directed facilities, with professionals in order to provide the space economy at space activities several that have the space economy in Queensland is limited. However, •• However, specialised research with the appropriate – individuals Queensland has Queensland does units dedicated to skills required; who require strong education not have critical space activities however, there the necessary and training mass in educators exists a vicious cycle education will often opportunities in •• Queensland’s for providing in education and pursue their studies industries which education providers education specific job opportunity. internationally require similar do not specialise to the space As there has not expertise and in space education economy previously been experience. or provide space •• The existence enough growth specific programs. of individuals in the industry to However, they do working at several encourage sector provide degrees Queensland specific education. with leading universities with A phenomena capability in industry-leading known as ‘brain industries with expertise is a drain’ occurs and symmetry to space strength for the does not enable the sub-sector industry to find the necessary labour to grow and sustain operations

87 Sky is not the limit Department of State Development, Manufacturing, Infrastructure and Planning

Appendix C CGE modelling assumptions

88 Building Queensland's space economy

This Appendix provides additional detail Second: what does the future uptake of Industries that benefit from the future in support of the economic modelling in space enabled services and technologies adoption of space enabled services chapters 7 and 8. Specifically, this appendix mean for the Queensland economy as a covers: whole? This requires exploring plausible The expansion of the Queensland industry has significant downstream impacts to a •• The approach to the economic modelling; future scenarios for the increase in diffusion, uptake and spillover impacts with wide range of industries that can exploit •• Further details on the industry benefits a focus on those sectors in Queensland space enabled goods, services and of space enabled services; and that potentially stand to gain the most technologies to achieve efficiencies. Key •• The technical specification of Deloitte based on the information on the growth industries include: Access Economics’ Computational and application of space enabled services Agriculture General Equilibrium model. known today. As a result of this future uncertainty, a range of plausible scenarios Mining Economic impact analysis are presented. methodology Telecommunications The economic impact analysis Finally, the growth trajectories of the methodology used in this study has three space sector itself as well as productivity Transport and logistics key components. implications for broader industries is modelled within a computable general Construction First: measuring the current and future size equilibrium framework to measure the of the space sector in Queensland, including short, medium and long term future Utilities space related segments which include the economic impacts of the space sector space activities of the aerospace, defence as a whole in Queensland. Research and development. and advanced manufacturing sectors. However, this is only one key part of the story of the economic potential of the space industry in Queensland.

Figure C.1 Economic modelling methodology

Current and future size of the space sector Productivity potential and sectoral implications Economy wide impacts over the from space enabled services and uptake scenarios short, medium and long term

Economic modelling Estimate the current and future direct Investigate the industries that are expected to to estimate future economic contribution of the space sector in benefit from the productivity potential of space impacts for a range of Queensland in terms of key economic metrics enabled services/technologies including increased “plausible future uptake including value added and employment uptake and incremental productivity benefits and growth scenarios”

Develop Assess global Measure benefits customised Desktop Analysis of key and national of increased version of in- assessment and space segments economic uptake by sector house Deloitte literature scan outlook in Queensland CGE model for the space sector

Economic Future Industry Sectoral Economic contribution growth assessment impacts scenarios

Measure future This includes Short, medium Estimate current Identify sectoral size of Qld space sectoral cost and long term size of Qld space implications of sector including savings and economic impacts sector including uptake of space medium and productivity, including GSP key segments goods/services long term R&D etc. and jobs

89 Agriculture (broad acre cropping) Internationally, the applications of space Productivity benefits Techniques such as precision farming have technologies to agriculture have been for broadacre cropping been employed by parts of the agricultural highlighted by the Canadian Space Agency. industry in Australia. The cropping Farmers use satellite data in a range of The use of GNSS benefits both the use industry (including wheat, barley and rice) ways including identification of soil and of inputs (such as fuel, labour and has historically been the largest user of crop characteristics; monitoring shoot materials) and agriculture yields in GNSS technology. These techniques are growth; better forecasting precipitation broadacre cropping. Using an uptake also being used by the cotton, sugar and and estimating total output.42 rate of GNSS technology increasing horticulture industries to a lesser extent. from 40% in 2024 to 65% in 2036 (over The cropping sector is the leader in Select applications of precision farming and above business as usual) leads to precision agriculture, with potential to techniques include controlled traffic a direct benefit ranging from $80 reach 85% by 2025.43 There are some farming, inter-row sowing and variable rate million to $110 million per annum over challenges noted in relation to higher (VR) fertiliser. the period 2019 to 2036 (net of uptake in precision agriculture more adoption costs). Controlled traffic farming refers to the case generally, including high upfront costs, where tractors follow set paths guided limited network coverage, the need for by GNSS and automated steering. By new managerial skills and the perceived restricting movement to a set path, this complexity. The costs of adoption of GNSS method reduces the amount of land that is technology also ranges from $30,000 with affected by heavy machinery. This improves a capability of 10cm accuracy and increases the soil structure and water holding to $50,000 for a higher accuracy of 2cm.44 capacity of non-trafficked land, which leads to higher crop yields.39 In addition to increased yields, there are benefits, which include labour, fuel and saving on other inputs such as herbicides and insecticides.

Inter-row sowing, involves the precise placement of seeds between the rows of the previous year’s crops and this can flow through to yield increases. VR fertiliser application is centred on coordinate based fertilisation of leading to more efficient use of fertilisers.40 The consequent benefits include a reduction in fertiliser used, freight and fuel costs, time spent refilling a machines’ fertiliser spreader, chemical leaching and weed vigour.41

90 Building Queensland's space economy

Mining The main benefit of this is in the form of Direct benefits The mining industry has a history of using labour savings, but other benefits include GNSS technology for nearly three decades. reduced accidents, reduced haul truck The application of GNSS technology in There are a number of applications travel cycle times and lower maintenance the use of mining leads to benefits in including vehicle tracking and dispatch, costs.49 In 2008, just 15% of mines the use of inputs to mining such as material tracking, drill guidance, haul were using accurate selective mining labour and other inputs including fuel road grading and maintenance, geological technology.50 In the same study, this was through automation and techniques mapping, control of bench height, mine estimated to increase to between 65% and such as precision mining, that targets site surveying, accurate selective mining 80% by 2030. The corresponding numbers higher quality product give yield and autonomous haul trucks.45 The latter for autonomous haul trucks are 50% and improvements. The adoption profile is two were identified by the literature as 60% are line with a trend to higher levels of 25% in 2024 and increases up to 60% key applications having strong potential to automation in the future. by 2036 (over and above business as drive productivity in the mining industry. usual). This leads to an annual benefit A challenge relating to uptake includes the Accurate selective mining refers to the ranging from $300 to $425 million per incompatibility of GNSS technology used practice of attaching GNSS to excavators annum over the period 2019 to 2036 at different mining sites. The development to guide operators on where specifically (net of adoption costs). to mine. This method allows operators of a nation GNSS network was noted to extract ores more efficiently; that is, as a potential way to overcome this it allows a larger amount of ore to be challenge. This would also allow suppliers extracted with fewer waste, subsequently of technologies to design standardised 51 increasing yields. This was estimated to products for market. Another study increase the level of production of the notes the importance of compatibility of mining of zinc mine.46 This similarly has technologies and that uptake will also be applications to black coal mining and non- influenced by economic conditions and the ferrous mining open-cut mining operations need for companies to gain competitive 52 in Queensland. advantages through investment. These methods also currently apply only to open Another area where GNSS technology cut mines. is already being used in mining is autonomous haul trucks. An example of this is Rio Tinto’s operations in Western Australia, and in Queensland where this approach is also being adopted47 through the trialling of automated trucks in some mine sites. Autonomous haul trucks removes the need for human drivers by using GNSS to fully operate the truck.48

91 Telecommunications In addition to GNSS, satellite GNSS technology is integral to communications technology underlies a Direct benefits telecommunications infrastructure and number of specialised telecommunications supports fixed-line telecommunications services including broadcasting (TV, radio), GNSS technology has significant (including internet), cellular broadband and internet of things (IoT).56 applications to communications telecommunications, digital video Importantly, satellite communications sectors opening up opportunities broadcast, digital audio broadcast, provides increased connectivity (and for new products over time and terrestrial truncated radio and internet communication speeds) to remote areas improving the quality and efficiency data centres.53 Its importance stems previously reliant on terrestrial based of services delivered by the sector from GNSS’ ability to deliver precision internet services thereby improving to end users. The profile of timing synchronization and position equity of access to information and adoption increases from 60% in information which enables the continuous services.57 This helps bridge Australia’s 2024 up to 80% by 2036 (over and transmission of information with low error ‘digital divide’ between urban and regional above business as usual). The rate and noise.54 The consequent reduced areas and consequently can facilitate benefits (net of the cost of adoption infrastructure costs and capital investment important productivity gains.58 Given the costs) ranges from $50 to $70 outlays have a significant economic impact central role of, and significant reliance million per annum over the period as demonstrated by London Economics’ on telecommunications in other sectors 2019 to 2036. 2017 report which notes the improvement in the economy; numeric estimates in gross value added to the UK economy of the economic impact of satellite due to GNSS use in the communications communications are not widely available. sector (and the impact of disruption to these services).55 There is limited information concerning the adoption rate of GNSS, presumably given its broad application across the telecommunications industry as whole.

92 Building Queensland's space economy

Transport and logistics The sector’s early adoption of GNSS Direct benefits Precise positioning via GNSS technology technology, particularly for monitoring, has many applications throughout the tracking and fleet management The transport and logistics sectors transport (including road, rail, aviation and applications within the road transport and have the potential to benefit in the maritime) and logistics sectors. A non- logistics sub-sectors, has been important future from the use of GNSS exhaustive list of examples includes: to addressing issues of congestion, technology. The uptake rate is •• Logistics and fleet management – accessibility, road safety and rising fuel assumed to increase from 25% in 2024 66 monitoring the precise position of fleet prices. As a result, the subsectors, and up to 60% by 2036. The benefits vehicles to help manage and optimise particularly road transport and logistics, (net of the cost of adoption from 2020 route selection, driver fatigue, fuel have experienced productivity increases to 2024) range from $90 to $185 million efficiency and timing59 due to increased transport efficiency from per annum over the period 2019 to lower fuel costs, lower congestion and 2036. •• Road maintenance – gathering of improved road maintenance.67 Hence the information and data for assessment of combined output from Australia’s road road corridors, geometry, conditions and transport and logistics sector has benefited asset management60 as a result of the application of GNSS •• Cooperative intelligent transport systems technology. (C-ITS) – connection and exchange of real- time information concerning features of Improvements in precise positioning the road environment e.g. road and traffic accuracy, reliability, integrity and conditions so as to better connect road interoperability, as well as increased users to their road environment61 technology adoption across the sector, is important to achieving further efficiencies •• Rail track surveying and location of within existing applications as well infrastructure62 as creating new ones within the road •• Automated Train Management Systems transport and logistics subsectors.68 (ATMS)63 Cooperative intelligent transport systems •• General maritime navigation and have the potential to facilitate productivity navigation through restricted waters64 improvements through reductions in travel time, congestion and fuel consumption.69 65 •• Aid to aircraft navigation The use of GNSS technology has been applied at container ports and has resulted in benefits through improved container management and handling given accuracy requirement to be 2cm compared to 10cm accuracy for general transport logistics.

93 Construction Machine guidance is used amongst Direct benefits Precise positioning utilising GNSS earthmoving machines including technologies is a growing trend within excavators, bulldozers and grading The benefits of GNSS technology to the construction sector. This includes machines. Traditional earthmoving the construction sector are construction and engineering surveying often requires a large degree of rework demonstrated in this study through and machine guidance. and on site surveyors. However, GNSS the use of machine guidance and technologies makes it possible to reduce construction surveying. The profile of Construction and engineering surveying is the amount of rework and significantly technological uptake increases from assisted through access to space enabled reduce the need for surveyors. The key 25% in 2024 and up to 60% by 2036. services. Prior to the adoption of GNSS benefits resulting from this method The benefits (net of the cost of technology, surveyors had to undertake includes time savings, capital savings, adoption from 2020 to 2024) range the time consuming task of providing and labour savings, improved safety and from $115 to $180 million per annum verifying extensive control networks and improved quality of work. over the period 2019 to 2036. using optical instruments for surveying.70 With GNSS, this allows the critical These techniques have been widely coordinates to be identified faster and with adopted by the industry, particularly for a higher level of accuracy. This results in surveying. Adoption rates for construction significant benefits, including time savings, and engineering surveying and machine better accuracy, reduced labour costs, guidance were around 60% and 15%, safety improvements and infrastructure respectively, a decade ago. Given the improvements. benefits of the technology these numbers are likely to increase in the future to up to numbers could increase up to 90% and 60% respectively. However this will also depend on the availability of network infrastructure across different locations to support adoption rates of this level.

94 Building Queensland's space economy

Utilities Direct benefits The utilities sector includes electricity, gas and water. GNSS is an important feature in The benefits of GNSS technology in the design, construction and management utilities has been demonstrated across of these large infrastructure assets. In a range of applications to date and in the design and construction phase, GNSS particular precision mapping of assets. is able to accurately record the location The benefits for utilities is up to 2.5% of assets (captured in the construction of output. The uptake of the sector). Another key area where GNSS technology is 50% in 2024 and can help to achieve efficiencies is in asset increases up to 80% by 2036. The management, where this technology can benefits (net of the cost of adoption use precise positioning to monitor and from 2020 to 2024) range from $35 to control the system, identify any faults $60 million per annum over the period and manage maintenance. This is able 2019 to 2036 to provide operating benefits in terms of asset mapping. This is also observed by another study, citing that the use of the technology could result in cost savings (operating and maintenance) of up to 20%. The cost savings vary across the sector, with the biggest potential savings in electricity distribution and underground services.71 Studies have shown that the adoption of GNSS technology has been far more prominent for above ground assets and could be up to 95% by 2020.72

95 Research and development in the Incremental impact measurement space sector The Commonwealth government is In this modelling, the uptake rates for planning to spend $10 billion into each of the sectors represent the research and development (R&D) in the estimated range of incremental uptake space sector over the next 20 years (or for each space growth scenario (i.e. $500 million per annum). If Queensland relative to the business as usual attains its current national share of R&D projection of the Queensland similar to Queensland’s share of the economy). In the business as usual national space industry this equates to scenario, it has been estimated that $75 million per annum of R&D spend there will be an average annual uptake in Queensland. Through leveraging of rate of around 20% across the sectors competitive advantages such as advanced that potential stand to benefit most manufacturing and aerospace (that are from space enabled goods, services interrelated with space) Queensland can and technologies in the Queensland increase it share to reflect its population economy. share. This implies R&D spend of $100 million per annum and this equates to 25 million incrementally or $500 million (undiscounted) over a period of 20 years. The higher R&D attained by Queensland is modelled through increased output in the space sector.

96 Building Queensland's space economy

Approach to estimating A mapping was conducted to align the Revenue for each segment is derived the direct contribution industry segments in IBIS World to using Queensland’s share of the segment of the space industry specific industry activities as defined and national revenue. Value added and Estimation of the direct economic in the Australia New Zealand Standard employment are estimated using national contribution of the space industry Industry Classification (ANZSIC) where benchmarks based on IBIS World research in Queensland practical to best reflect the activities of (2018). A ‘top down’ approach has been used the space sector in Queensland. Shares to estimate the size of the Queensland to allocate some Queensland revenue by space industry. The starting point is the segment were estimated using Queensland national industry that generated revenue employment data by industry and place of of $5.1 billion in 2018-19 based on IBIS work from the 2016 Census of Population World (2018). This translated to value and Housing, as seen in Table 9.1. added of $3.4 billion and industry Queensland’s share of earth observation employment of 13,700 persons. The size and ground station infrastructure of the industry is consistent with earlier operations is based on research conducted work that valued space industry revenue by IBIS World (2018). Queensland’s share nationally at $3.94 billion in 2015.73 of ‘other activities’ is an average of all other industry segments given the products/ services produced by this segment (e.g. space related research).

Table 9.1 Mapping Queensland share of the national space industry by segment

IBIS World Segments of the space Activity as defined in ANZSIC Queensland share of national industry industry classification or best proxy

Other telecommunications network Satellite communications 10.2% operation

Free-to-air television broadcasting Direct to home TV 12.4% Cable and other subscription broadcasting

Using IBIS World research on satellite Earth observation and ground station communications and astronautics in 10.1 infrastructure operation Australia

Space technology manufacturing Aircraft manufacturing and repair services 33.1%

Space related services such as space Other activities research, space launching facilities and 16.5% other ancillary services

97 Constructing the baseline In order to do this, superior data was used The model is based upon a set of key forecast in DAE RGEM and applied the mapping developed for underlying relationships between the Baseline projection the space industry to split out the relevant various components of the model, each The projected economic growth rates part of the sector from the parent industry which represent a different group of agents imposed in DAE-RGEM model for real in the database. This process used the in the economy. These relationships are gross state product, real investment, splitcom program developed by the Centre solved simultaneously, and so there is no labour supply and population are based of Policy Studies, Victoria University. This logical start or end point for describing on underlying trend growth rates. Other program allows the user to input data on how the model actually works. However, macroeconomic variables (for instance, sales/cost weights to split out an existing they can be viewed as a system of employment, exports, imports and industry (i.e. parent industry) into two interconnected markets with appropriate consumption expenditure) are determined components. One part represents the specifications of demand, supply and the by the model. This is based on long term new industry of interest (i.e. split from the market clearing conditions that determine macro-economic forecasts developed in parent industry). The other part represents the equilibrium prices and quantity the Deloitte Access Economics Business the remainder of the parent industry. produced, consumed and traded. Outlook and with reference to Budget This is done in such in such a manner to DAE-RGEM is based on a substantial body forecasts developed by the Queensland keep the whole database balanced and to of accepted microeconomic theory. Key Government in the 2018-19 State Budget ensure valid cost and sales structures. The assumptions underpinning the model are: and Mid-Year Economic and Fiscal outlook. weights used for splitcom were developed with reference to economic datasets from •• The model contains a ‘regional consumer’ In the baseline the space industry is the ABS (including the Australian Industry that receives all income from factor assumed to grow at 7% over the next Publication and ABS National input output payments (labour, capital, land and five years to 2023-24. Beyond the short tables and Census data) and IBIS World natural resources), taxes and net foreign to medium term the space industry is industry reports. income from borrowing (lending). assumed to growth at per annum out Theory of DAE RGEM •• Income is allocated across household to 2036 based on a profile developed consumption, government consumption by Morgan Stanley on future growth Model theory and savings so as to maximise a Cobb- The Deloitte Access Economics regional prospects for the industry. The underlying Douglas (C-D) utility function. growth in the Queensland economy is general equilibrium model (DAE-RGEM) •• Household consumption for composite based on long term macro-economic is a large scale, dynamic, multi-region, goods is determined by minimising forecasts developed by Deloitte, around multi-commodity computable general expenditure via a Constant Differences of 2-3% over the long term. The underlying equilibrium model of the world economy Elasticities (CDE) () expenditure function. growth in the Queensland population with bottom up modelling of Australian For most regions, households can and labour force is consistent with these regions. The model allows policy analysis source consumption goods only from macro-economic assumptions. in a single, robust, integrated economic framework. This model projects changes in domestic and imported sources. In the Customised database for space macroeconomic aggregates such as GDP, Australian regions, households can also As part of this project it was necessary employment, export volumes, investment source goods from interstate. In all cases, to split out the space industry out from and private consumption. At the sectoral the choice of commodities by source other industries in the Queensland level, detailed results such as output, is determined by a Constant Ratios of economy (or the relevant parts of them exports, imports and employment are also Elasticities Substitution, Homothetic from other industry sectors) in our produced. (CRESH) utility function. master database as they are not always •• Government consumption for composite explicitly represented as a separate goods, and goods from different sources industry sector. It was necessary to (domestic, imported and interstate), is initially and uniquely identify aerospace, determined by maximising utility via a C-D defence, advanced manufacturing, rest utility function. of manufacturing, communications in the data base and subsequently split out the space components of these sectors so only the non-space component remained. Correspondingly, the space sector was carved out by aggregating the relevant proportion of these industry sectors.

98 Building Queensland's space economy

•• All savings generated in each region are •• For internationally-traded goods (imports The representative household’s used to purchase bonds whose price and exports), the Armington assumption relationship with investors is through the movements reflect movements in the is applied whereby the same goods supply of investable funds – savings. The price of creating capital. produced in different countries are relationship between the representative treated as imperfect substitutes. But, household and the international sector •• Producers supply goods by combining in relative terms, imported goods from is twofold. First, importers compete with aggregate intermediate inputs and different regions are treated as closer domestic producers in consumption primary factors in fixed proportions substitutes than domestically-produced markets. Second, other regions in the (the Leontief assumption). Composite goods and imported composites. Goods model can lend (borrow) money from intermediate inputs are also combined traded interstate within the Australian each other. in fixed proportions, whereas individual regions are assumed to be closer primary factors are combined using a CES •• The representative household substitutes again. production function. allocates income across three different •• The model accounts for greenhouse expenditure areas – private household •• Producers are cost minimisers, and in gas emissions from fossil fuel consumption; government consumption; doing so, choose between domestic, combustion. Taxes can be applied to and savings – to maximise a Cobb- imported and interstate intermediate emissions, which are converted to Douglas utility function. inputs via a CRESH production function. good-specific sales taxes that impact •• Private household consumption on •• The supply of labour is positively on demand. Emission quotas can be set composite goods is determined by influenced by movements in the real by region and these can be traded, at a minimising a CDE expenditure function. wage rate governed by an elasticity value equal to the carbon tax avoided, Private household consumption on of supply. where a region’s emissions fall below or composite goods from different sources •• Investment takes place in a global exceed their quota. is determined is determined by a utility market and allows for different regions function. Below is a description of each component to have different rates of return that of the model and key linkages between •• Government consumption on composite reflect different risk profiles and policy components. goods, and composite goods from impediments to investment. A global different sources, is determined by investor ranks countries as investment Households maximising a Cobb-Douglas utility destinations based on two factors: global Each region in the model has a so-called function. investment and rates of return in a given representative household that receives region compared with global rates of and spends all income. The representative •• All savings generated in each region is return. Once the aggregate investment household allocates income across three used to purchase bonds whose price has been determined for Australia, different expenditure areas: private movements reflect movements in the aggregate investment in each Australian household consumption; government price of generating capital. consumption; and savings. sub-region is determined by an Producers Australian investor based on: Australian Apart from selling goods and services to The representative household interacts investment and rates of return in a given households and government, producers with producers in two ways. First, in sub-region compared with the national sell products to each other (intermediate allocating expenditure across household rate of return. usage) and to investors. Intermediate and government consumption, this usage is where one producer supplies •• Once aggregate investment is sustains demand for production. Second, inputs to another’s production. For determined in each region, the regional the representative household owns and example, coal producers supply inputs to investor constructs capital goods by receives all income from factor payments the electricity sector. combining composite investment goods (labour, capital, land and natural resources) in fixed proportions, and minimises costs as well as net taxes. Factors of production Capital is an input into production. Investors by choosing between domestic, imported are used by producers as inputs into react to the conditions facing producers and interstate sources for these goods production along with intermediate inputs. in a region to determine the amount via a CRESH production function. The level of production, as well as supply of of investment. Generally, increases in factors, determines the amount of income •• Prices are determined via market-clearing production are accompanied by increased generated in each region. conditions that require sectoral output investment. In addition, the production of (supply) to equal the amount sold machinery, construction of buildings and (demand) to final users (households and the like that forms the basis of a region’s government), intermediate users (firms capital stock, is undertaken by producers. and investors), foreigners (international In other words, investment demand adds exports), and other Australian regions to household and government expenditure (interstate exports). from the representative household, to determine the demand for goods and services in a region.

99 Producers interact with international Investors Methodology markets in two main ways. First, they Investment takes place in a global market CGE modelling is the framework that is compete with producers in overseas and allows for different regions to have best suited to modelling the impact of regions for export markets, as well as in different rates of return that reflect different large projects or policies on the economy. their own region. Second, they use inputs risk profiles and policy impediments to In this framework, it is possible to account from overseas in their production. investment. The global investor ranks for resourcing constraints and opportunity •• Sectoral output equals the amount countries as investment destination based costs, and to model changes in prices demanded by consumers (households on two factors: current economic growth and the behaviour of economic agents and government) and intermediate users and rates of return in a given region in response to changes in the economy. (firms and investors) as well as exports. compared with global rates of return. This project has used the DAE-RGEM. This •• Once aggregate investment is is a model of the Australian and world •• Intermediate inputs are assumed to be determined in each region, the regional economy, and represents the interaction combined in fixed proportions at the investor constructs capital goods by of households and firms with factor composite level. As mentioned above, combining composite investment goods markets and goods markets over time. the exception to this is the electricity in fixed proportions, and minimises costs DAE-RGEM represents all economic activity sector that is able to substitute different by choosing between domestic, imported in the economy, including production, technologies (brown coal, black coal, oil, and interstate sources for these goods consumption, employment, taxation and gas, hydropower and other renewables) via a CRESH production function. trade. using the ‘technology bundle’ approach developed by ABARE (1996). International The circular flow of income and spending Each of the components outlined above •• To minimise costs, producers substitute that occurs in DAE-RGEM is captured operate, simultaneously, in each region between domestic and imported in a stylised form in Figure C.2. To meet of the model. That is, for any simulation intermediate inputs is governed by demand for products, firms purchase inputs the model forecasts changes to trade and the Armington assumption as well as from other producers and hire factors of investment flows within, and between, between primary factors of production production (labour and capital). Producers regions subject to optimising behaviour by (through a CES aggregator). Substitution pay wages and rent (factor income) which producers, consumers and investors. Of between skilled and unskilled labour is accrue to households. Households spend course, this implies some global conditions also allowed (again via a CES function). their income on goods and services, pay that must be met, such as global exports taxes and put some away for savings. •• The supply of labour is positively and global imports, are the same and that influenced by movements in the wage global debt repayment equals global debt For this project, the model has been rate governed by an elasticity of supply receipts each year. customised to represent the Queensland is (assumed to be 0.2). This implies economy and capture the space industry, that changes influencing the demand along with relevant upstream and for labour, positively or negatively, will downstream industries. impact both the level of employment and the wage rate. This is a typical labour Table C.2 Stylised diagram of DAE-RGEM market specification for a dynamic model such as DAE-RGEM. There are Households other labour market ‘settings’ that can be used. First, the labour market could

take on long-run characteristics with Supply aggregate employment being fixed and Purchase

any changes to labour demand changes Income being absorbed through movements in the wage rate. Second, the labour market Factor markets Goods markets could take on short-run characteristics with fixed wages and flexible employment Labour Capital Resources Land Local Interstate Overseas levels.

Supply

Purchase

Purchase Firms

Source: Deloitte Access Economics 100 Building Queensland's space economy

Appendix D Short form data capture and capability survey

101 The following section presents the full results of the short survey (survey 1).

It is important to note results may not add to 100% due to rounding.

Is your organisation headquartered in Queensland? How many employees do you have in FY18?

Yes 69% Non Employing (i.e. having no employees) 5%

No 31% 1-19 Employees 41%

20-199 Employees 31%

Is your organisation a…? 200+ Employees 17%

Government Department 2% Not applicable (research institution etc.) 7%

Industrial Association 2%

Private Company 86% Have you exported your goods and/or services overseas in the past 12 months? University/Research/Educational 10% Organisation Yes 61%

No 34% What was your turnover range in FY18?

Not applicable (research institution etc.) 5% Zero to less than $50,000 5%

$50,000 to less than $200,000 5% Have you exported your goods and/or services overseas in the past 12 months? $200,000 to less than $2 million 24%

0-4 years 12% $2 million to less than $5 million 17%

5-10 years 12% $5 million to less than $10 million 10%

11-20 years 22% $10 million or more 32%

21-40 years 32% Not applicable (research institution etc.) 7%

>40 years 22%

102 Building Queensland's space economy

Do you consider the ‘space industry’ as your primary What capability area does your organisation primarily industry of operation? operate in?

Yes 25% Space Systems 27%

No 75% Launch Activities 10%

Ground Systems 8%

Space Enabled Services 10%

Ancillary Services 14%

R&D 7%

Education and Training 3%

Other 3%

Transport, logistics and construction 2%

General component, material, engineering 15% supply

103 The following is a list of questions from the extended capability survey. Due to confidentiality issues, participant answers have not been included.

Is your organisation a…? What percentage of your annual turnover range would you classify as primarily related to space economy activities in FY18? 1 Industrial Association

1 None 2 Private Company

2 <1-20% 3 Private Consultancy

3 21-40% 4 University/Research/Educational Organisation

4 41-60% 5 Government Department

5 >60% 6 Other, please specify [Free text]

What features of other Australian jurisdictions’ (e.g. SA, Please select which statement best represents your WA, ACT) space sectors could Queensland learn from? organisation’s current level of engagement and/or What are the key competitive advantages of activity in the space economy? Queensland’s space economy and how does your organisation benefit from them? The space economy is the core of my business 1 operations Have you collaborated with … in either a research or commercial capacity, in the past 5 years? Select all that The space economy is a secondary area of apply. 2 operation for my business

My organisation (or as an individual) occasionally 1 Queensland business/es 3 operates in the space economy

My organisation (or as an individual) has recently 2 Australian business/es 4 entered the space economy

My organisation (or as an individual) is not currently 3 Queensland research institution/s 5 active in the space economy

4 Australian research institution/s

5 An international space agency [please specify]

6 None of the above

104 Building Queensland's space economy

Please identify what area of capability in the supply chain of the space economy best describes the main activity of your organisation:

1 Industrial Association 15 R&D

2 Private Company 16 Satellite Communications Service Providers

3 Private Consultancy 17 Satellite Navigation Service & Applications

4 University/Research/Educational Organisation 18 Satellite Owner/Operator

5 Government Department 19 Space Qualified Testing and Facilities

6 Other, please specify [Free text] 20 Space Subsystem Supply

7 Ground Segment Prime/System Integration 21 Specialisation on nano and micro satellites (<50kg)

8 Ground Segment Subsystem & Equipment Supplier 22 System Engineering and Technical Support

9 Launch Services 23 System Engineering and Technical Support Services

10 Launch Support Services 24 Technical Support Services

11 Launch Vehicle Manufacturing and Assembly 25 Tracking, Telemetry & Command Operations

12 Legal Services 26 User Equipment Manufacturer

13 Other, please specify [Fixed at bottom] 27 User Equipment Suppliers

14 Prime/System Integration

105 Have you supplied/provided goods/services to a Considering your organisation’s supply chain, select government project in the past 5 years? the top 3 industry sectors your organisation currently purchases products/services from?

1 Yes 1 Agriculture, Forestry and Fishing

2 No 2 Construction

3 Defence Have you received any of the following government support in the past 5 years? 4 Education and Training

1 Funding 5 Finance, Insurance and Business Services

2 Facilitation (e.g. networking) 6 Information Media and Telecommunications

3 Other (please specify) 7 Manufacturing

4 No support 8 Mining

Considering your organisations supply chain, are there 9 Other Services any significant purchases (that relate to your core business) that your organisation can’t source within Queensland? 10 Professional, Scientific and Technical Services

Location (City, Trade Product/Service 11 Country)

1 [Free text 20 words] [Free text 5 words] 12 Transport

2 [Free text 20 words] [Free text 5 words] 13 Utilities

3 [Free text 20 words] [Free text 5 words] 14 Other, please specify [Fixed at bottom]

4 Not applicable N/A 15 Don’t know [Fixed at bottom]

106 Building Queensland's space economy

What are the top 3 reasons you purchase products/ Considering your organisation’s supply chain, select the services for your organisation from outside of top 3 industry sectors your organisation currently sells Queensland? products/services to?

Better quality product/service outside of 1 1 Agriculture, Forestry and Fishing Queensland

2 More expertise outside of Queensland 2 Construction

3 Not applicable 3 Defence

4 Other, please specify [Fixed at bottom] 4 Education and Training

5 Price of product/service in Queensland is too high 5 Finance, Insurance and Business Services

6 Product/service is highly specialised in nature 6 Information Media and Telecommunications

7 Product/service not available in Queensland 7 Manufacturing

8 Mining

9 Other Services

10 Professional, Scientific and Technical Services

11 Trade

12 Transport

13 Utilities

14 Other, please specify [Fixed at bottom]

15 Don’t know [Fixed at bottom]

107 What are the top 3 industry sectors that you see Are you part of the supply chain of a large multinational? could potentially use the products/services of your organisation (or individual)? 1 Yes

1 Agriculture, Forestry and Fishing 2 No

2 Construction 3 Not applicable (research institution etc.)

3 Defence

Have you had difficulty hiring employees with the 4 Education and Training necessary skills for the space industry?

5 Finance, Insurance and Business Services 1 Yes

6 Information Media and Telecommunications 2 No

7 Manufacturing 3 Not applicable

8 Mining

9 Other Services

10 Professional, Scientific and Technical Services

11 Trade

12 Transport

13 Utilities

14 Other, please specify [Fixed at bottom]

15 Don’t know [Fixed at bottom]

108 Building Queensland's space economy

What area/s of the Queensland space economy do you purchase products/services from?

Antenna/Ground Station Component or Material 1 15 Prime/System Integration Supplier

2 Component and Material Supply 16 R&D

3 Component and Subsystem Management 17 Satellite Communications Service Providers

Consultancy Services (e.g. IT, analytics, professional 4 18 Satellite Navigation Service & Applications services)

5 Earth Observation Services & Applications 19 Satellite Owner/Operator

6 Financial Services 20 Space Qualified Testing and Facilities

7 Ground Segment Prime/System Integration 21 Space Subsystem Supply

8 Ground Segment Subsystem & Equipment Supplier 22 Specialisation on nano and micro satellites (<50kg)

9 Launch Services 23 System Engineering and Technical Support

10 Launch Support Services 24 System Engineering and Technical Support Services

11 Launch Vehicle Manufacturing and Assembly 25 Technical Support Services

12 Legal Services 26 Tracking, Telemetry & Command Operations

13 None 27 User Equipment Manufacturer

14 Other, please specify [Fixed at bottom] 28 User Equipment Suppliers

109 In the context of your organisation (or as an individual), please select the top 5 constraints to growth:

1 Long investment cycles 13 No access to markets (for export)

2 Australian market does not exist for services/goods 14 No skilled workforce in the required field

Complex access structures (to large organisations/ 3 15 No suppliers government)

4 Data privacy/cyber risk 16 Other, please specify [Fixed at bottom]

5 Difficulty accessing appropriate financing 17 Poor collaboration across industry

6 Expensive certification/licensing 18 Poor knowledge of opportunities/markets

7 High entry cost 19 Procurement programs - lengthy

8 High investment cost 20 Procurement programs – unclear

9 Inappropriate/insufficient launch facilities 21 Technological risk

10 Insurance 22 Unable to obtain certification/licensing/permits

Long lead times to acquire necessary inputs/ Regulation/legislative frameworks in place do not 11 23 services for your product/service support growth

12 Market saturation

110 Building Queensland's space economy

What do you see as the greatest risk/challenge to the The recently established Australian Space Agency growth of the Queensland space economy in the short/ is encouraging a ‘Team Australia’ approach to the medium/long term? development of the Australian space industry, suggesting the jurisdictions pursue their relative competitive advantages. Please indicate your view Short (1-5 years) [Free text 20 words] on the competitive advantages of the following space economies:

Medium (5-10 years) [Free text 20 words] South Australia [Free text]

Long (10+ years) [Free text 20 words] Australian Capital Territory [Free text]

New South Wales [Free text] Have you had difficulty hiring employees with the necessary skills for the space industry? Victoria [Free text]

1 Yes Northern Territory [Free text]

2 No Western Australia [Free text]

3 Not applicable Tasmania [Free text]

What are the emerging frontiers in the space economy in Queensland?

[Free text]

What has been the primary enabler of growth for your organisation?

[Free text]

What does your organisation need to scale-up activity?

[Free text]

111 References

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114 Building Queensland's space economy

End notes

1. In this context, the space industry is more tightly defined than the space economy, where the former focuses on the sub-sectors considered to be in the ‘core’ of the space industry while the latter includes the broader upstream and downstream industries that sell to and buy from the ‘core’ space industry (e.g. advanced manufacturing). 2. OECD, 2014 3. Smart, 2016 4. Weinzierl, 2018 5. Bryce Space and Technology, n.d. 6. OECD, 2014 7. Space Safety Magazine, 2014 8. Ibid 9. Space Exploration Technologies Corp., 2017 10. Morgan Stanley, 2017 11. Ibid 12. Ibid 13. Bryce Space and Technology, Global Space Industry Dynamics, 2017 14. Bryce Space and Technology, Start-up Space, 2017 15. Dougherty, 2017 16. South Australian Space Industry Centre, 2017 17. Australian Academy of Science, 2017 18. Australian Space Agency, 2018 19. Australian Government Department of Industry, Innovation and Science, 2018 20. Ibid 21. Commonwealth of Australia, 2018 22. Australian Government Department of Industry, Innovation and Science, 2018 23. Ibid 24. Commonwealth of Australia, 2016 25. ACIL Allen, 2017 26. ACIL Allen, 2017 27. ACIL Allen, 2017 28. Space Angels, 2019 29. Ibid 30. Australian Bureau of Statistics, 2017 31. Morgan Stanley, 2018 32. Australian Government Department of Industry, Innovation and Science, 2018 33. IBIS World, 2018; ACIL Allen, 2015

115 34. Morgan Stanley, 2018 35. IBIS World, 2018 36. Morgan Stanley, 2018 37. IBIS World, 2018 38. Manicaros, 2017 39. Tullberg et al, 2003; Schofield et al, 2007 as seen in The Allen Consulting Group, 2008 40. International Efficient Agriculture Solutions and Standards Association, 2016 41. Schuman and Hostler, 2008 42. Canadian Space Agency, 2018 43. ACIL Allen, 2017 44. Jones and O’Halloran, 2006 as seen in The Allen Consulting Group, 2008 45. Jaroz and Finlayson, 2002 as seen in The Allen Consulting Group, 2008 46. Seymour, 2005 as seen in The Allen Consulting Group, 2008 47. Creagh, 2018 48. Hughes, 2002 as seen in The Allen Consulting Group, 2008 49. The Allen Consulting Group, 2008; Hughes, 2002 as seen in The Allen Consulting Group, 2008 50. Seymour, 2008 as seen in The Allen Consulting Group, 2008 51. The Allen Consulting Group, 2008 52. McNab and Garcia-Vasquez, 2012 as seen in ACIL Allen, 2013 53. Sadlier et al, 2017 54. Kornhauser, 2006 55. Sadlier et al, 2017 56. CSIRO Futures, 2018 57. Commonwealth of Australia, 2013 58. Australian Government Space Coordination Committee, 2018 59. ACIL Allen, 2013 60. Ibid 61. Ibid 62. Ibid 63. Ibid 64. Ibid 65. Ibid 66. ANZLIC, 2017 67. ACIL Allen, 2013 68. Ibid 69. Ibid 70. ACIL Allen, 2013; The Allen Consulting Group, 2008 71. ACIL Allen, 2013 72. Ibid 73. ACIL Allen 2015

116 Building Queensland's space economy

Contact us

Dr Pradeep Phillip Partner E: [email protected] D: +61 7 3308 7224

Kelly Heaton Corey James Mathew Thomas Claire Atkinson Associate Director Director Associate Director Manager

Liesda Marsdon Nathan Brierley Senior Economist Economist

117 Limitation of our work

General use restriction This report is prepared solely for the internal use of the Department of State Development, Manufacturing, Infrastructure and Planning. This report is not intended to and should not be used or relied upon by anyone else and we accept no duty of care to any other person or entity. The report has been prepared for the purpose of developing a capability audit of Queensland’s space economy and conducting an economic impact analysis. You should not refer to or use our name or the advice for any other purpose.

118 Building Queensland's space economy

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