An Economic Analysis of the European Space Economy

An Economic Analysis of the European Space Economy Ignacio María Eiriz Gervás Supervisors: Aitor Ciarreta Antuñano, Maria Paz Espinosa Alejos Programa de Doctorado en Finanzas y Economía Cuantitativas Bilbao, 15 de febrero de 2021. (CC By) 2021 Ignacio María Eiriz Gervás 1 ACKNOWLEDGEMENTS I, first, want to thank the Department of Economic Analysis of the University of the Basque Country; my supervisors, María Paz Espinosa and Aitor Ciarreta, with their stimulating questioning, inspiring technical support and motivation and my tutor, Victoria Ateca, for her challenging approach and continuous support. Without them, this thesis could not ever be possible. I am sure, after these years of space sector analysis, we share certain love for the space activity and a notable interest about the economics around it. I want also to thank the two institutions that have supported this thesis. The University of the Basque Country, for giving me the opportunity to be educated in economic sciences and to open the scope of my understanding as an engineer. I am especially grateful to Elena Iñarra and Federico Grafe, supervisors of my minor thesis and Josu Arteche; and the Aerospace Technology Centre (Fundación CTA), where, together with my colleagues, I have had the chance to be closely connected to the space industry. Financial support from MINECO (PID2019-108718GB-I00) and the Basque Government (IT 1336-19) is gratefully acknowledged. European Space Agency and European Commission project data availability have been also key for this thesis. Finally, I want to thank my family and closest friends for their support and encouragement. To Marta, Juan and Carlota. 3 INDEX Resumen ......................................................................................................................... 19 List of Acronyms ........................................................................................................... 25 Introduction ................................................................................................................... 29 Object of study ............................................................................................................ 29 Plan of the thesis ......................................................................................................... 30 Chapter 1. Space Economy and Space Economics: a general overview .................. 37 Global Space Economy ............................................................................................... 37 Defining the Space Economy ...................................................................................... 42 Public awareness and attitudes .................................................................................... 47 Attitudes and policies .................................................................................................. 51 Space Economics as the Economic Approach to the Space Economy ....................... 54 Complex product systems. Characteristics and market structures .......................... 55 Risk ......................................................................................................................... 57 Cooperative efforts. ................................................................................................. 59 Market failures in space .......................................................................................... 59 References ................................................................................................................... 63 Chapter 2. Space in Europe: Economics and Politics ................................................ 69 Context ........................................................................................................................ 70 European Actors .......................................................................................................... 72 European Space Agency .......................................................................................... 73 European Union ....................................................................................................... 77 National Agencies ................................................................................................... 79 Private agents .......................................................................................................... 79 Research centres and higher education institutions. ................................................ 81 Subnational Public bodies ....................................................................................... 82 References ................................................................................................................... 83 5 Chapter 3. Contributions to the European Space Agency ........................................ 89 Contributing to space exploration: transnational and intergovernmental initiatives ... 89 Review of the literature ............................................................................................... 91 Economics of alliances and the production of transnational public goods ............. 91 The Governance of ESA ......................................................................................... 93 A general principle: geo-return ............................................................................... 94 Theoretical framework ................................................................................................ 96 A transnational public good game. .......................................................................... 96 Benefits from contributions ..................................................................................... 96 How much to contribute? ........................................................................................ 98 Methods and Data Sources ........................................................................................ 101 Sample ................................................................................................................... 101 Variables ................................................................................................................ 104 Empirical analysis ..................................................................................................... 112 Estimating the probability of ESA membership ................................................... 112 Estimating the probability of contributing ............................................................ 114 Estimating contributions ....................................................................................... 115 Estimating total contributions ............................................................................... 116 Estimating voluntary contributions ....................................................................... 117 Conclusions ............................................................................................................... 120 References ................................................................................................................. 123 Chapter 4. Network under H2020-Space and Knowledge Diffusion across Countries ...................................................................................................................... 127 Introduction ............................................................................................................... 127 Review of the literature ............................................................................................. 130 Data Sources .............................................................................................................. 136 Countries R&D H2020-Space activity. ..................................................................... 137 H2020-Space Overview. ....................................................................................... 137 Countries Network ................................................................................................ 142 Countries' R&D Structure. .................................................................................... 149 Cooperation among groups of countries. .............................................................. 157 Network Metrics .................................................................................................... 160 H2020-Space network success. ................................................................................. 175 Knowledge and Technology Diffusion ................................................................. 175 R&D development ................................................................................................ 178 6 H2020-Space vs other framework programmes networks. ................................... 179 Network evolution over time ................................................................................. 181 H2020-Space successful Countries ........................................................................... 184 Success in H2020-Space ....................................................................................... 184 Success index correlation with country’s technology characteristics. .................. 186 Relationship between success and network metrics. Success breeds success. ...... 188 Conclusions ............................................................................................................... 191 References ................................................................................................................

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