Space Policies, Issues and Trends in 2010/2011 Report 35 June 2011 Spyros Pagkratis Short title: ESPI Report 35 ISSN: 2076-6688 Published in June 2011 Price: €11 Editor and publisher: European Space Policy Institute, ESPI Schwarzenbergplatz 6 • 1030 Vienna • Austria http://www.espi.or.at Tel. +43 1 7181118-0; Fax -99 Rights reserved – No part of this report may be reproduced or transmitted in any form or for any purpose with- out permission from ESPI. Citations and extracts to be published by other means are subject to mentioning “Source: ESPI Report 35; June 2011. All rights reserved” and sample transmission to ESPI before publishing. ESPI is not responsible for any losses, injury or damage caused to any person or property (including under contract, by negligence, product liability or otherwise) whether they may be direct or indirect, special, inciden- tal or consequential, resulting from the information contained in this publication. Design: Panthera.cc ESPI Report 35 2 June 2011 Space Policies, Issues and Trends in 2010/2011 Table of Contents 1. Global Political and Economic Trends 5 1.1 Global Economic Outlook 5 1.2 Political Developments 6 1.2.1 Security 6 1.2.2 Environment 7 1.2.3 Energy 7 1.2.4 Resources 8 1.2.5 Knowledge 8 1.2.6 Mobility 11 2. Global Space Sector Size and Developments 12 2.1 Global Space Budgets and Revenues 12 2.2 Overview of Institutional Space Budgets 12 2.3 Overview of Commercial Space Markets 16 2.3.1 Satellite Services 16 2.3.2 Satellite Manufacturing 19 2.3.3 Launch Sector 19 2.3.4. Ground Equipment 20 2.3.5 Insurance Sector 21 2.4 Sectoral overview 22 2.4.1 Launch Sector 22 2.4.2 Manufacturing sector 26 2.5 International sectoral Comparison 29 2.5.1 Launch Sector 29 2.6 Transatlantic industrial comparison 34 2.6.1 State of the European industry 34 2.6.2 State of the United States space industry 37 3. Space Policies and Strategies around the World 38 3.1 European Union 38 3.2 European Space Agency 39 3.3 EUMETSAT 40 3.4 National Governments 41 3.4.1 France 41 3.4.2 Germany 41 3.4.3 Italy 43 3.4.4 United Kingdom 43 3.5 United States of America 43 3.5.1 National Aeronautics and Space Administration (NASA) 49 3.5.2 National Oceanic and Atmospheric Administration (NOAA) 51 3.6 Russia 51 3.7 Japan 52 3.8 China 53 3.9 India 53 3.10 Emerging Space Actors 55 3.10.1 Africa 55 3.10.2 Southeast Asia 55 3.10.3 Middle East 55 3.10.4 Latin America 56 ESPI Report 35 3 June 2011 4. European Institutional Market 57 4.1 European Institutional Features 57 4.2 Civilian Space Expenditure 57 4.3 European Space Agency (ESA) 58 4.4 EUMETSAT 60 4.5 National Agencies 62 4.5.1 France 62 4.5.2 Germany 62 4.5.3 Italy 63 4.6 European Union (EU) 63 5. Space Industry Evolutions 65 5.1 Europe 65 5.2 United States 68 5.3 Russia 70 5.4 Japan 71 5.5 China 71 5.6 India 72 6. The Defence Perspective 73 6.1 Trends in Military Expenditure 73 6.2 Europe 73 6.3 The United States 74 6.4 Russia 75 6.5 Japan 75 6.6 China 76 6.7 India 77 List of Acronyms 79 Acknowledgements 88 About the Author 88 Space Policies, Issues and Trends in 2010/2011 1. Global Political and Economic Trends The following section attempts a brief de- icy of fiscal consolidation and monetary con- scription of recent developments in seven key traction in order to hedge the risks from the thematic areas: economy, security, environ- 2008 bailouts, which resulted in raising un- ment, energy, resources, knowledge and employment, crippling domestic demand and mobility. These fields enclose all human ac- increasing exports. The latter, on the other tivities that directly influence or are influ- hand, are continuing to provide fiscal stimuli enced by space activities, determining their and to follow monetary expansion policies perception from society and their impact that favour domestic consumption, which is upon it. The way in which activities in these expected to rise by 8% in 20102. areas involve the use of space assets also The main reason behind the different ap- makes the case in favour of the further de- proaches adopted was the poor sovereign velopment and use of space technologies, and banking fiscal condition of developed services and products. economies, compared to the emerging ones. Another reason has been the limited margin for further consumption growth in developed 1.1 Global Economic Outlook economies: starting from much higher con- sumption rates, they would not have been In 2010 and 2011 the symptoms of the 2008 able to profit from any further expansion as financial crisis were still broadly felt world- much as emerging economies, even with the wide. Although global financial expansion has adequate fiscal measures. In the years im- resumed already in 2009, its pace remains mediately preceding the crisis, emerging and slow and uncertain. The key element of that developed economies have been following recovery has been its uneven pace between completely different paths to economic de- developed and emerging countries, with the velopment. The former manifested a fiscally second achieving a much faster and bullish solid, industrial output and export oriented return to growth, as it was already predicted posture, while the latter a fiscally more pre- in the “Space Policies Issues and Trends in carious, financial services’ and domestic con- 2009/2010” report. Although global economic sumption oriented approach. In the time of activity is expected to rise by roughly 5% in global economic expansion, the two different 2010 and 4.2% in 2011, advanced economies approaches were able to cooperate and com- are projected to expand by only 2.2 to 2.7%, plement each other in a mutually beneficial whereas emerging countries’ development is way. It is clear however that in the aftermath expected to be up to three times higher1. of the crisis and the recovery efforts that followed they are set upon two very different Furthermore, while emerging economies and rapidly diverting paths of economic de- seem to have overcome the worst of the cri- velopment. sis with the help of suitable fiscal policies, advanced economies are still under consider- Advanced economies still have a number of able fiscal stress, especially in Europe. This challenges lying ahead, with the most impor- increasing difference between emerging and tant being to carefully balance the necessary developed economies has increased the sys- sovereign and banking fiscal stabilisation temic danger of a new crisis by exacerbating measures with the need to restrain unem- global financial imbalances and encouraging ployment and improve household finances excessive capital volatility and especially and consumption demand. First of all, finan- flows from advanced to emerging economies. cial sector policies and practices need to be This unstable situation is mostly fuelled by improved, addressing the financial and bank- the different approaches chosen by devel- ing imbalances that caused the recent crisis. oped and emerging economies in order to This applies particularly to the banking sector counter the crisis’ consequences. The former, (especially in Europe), where bank consolida- on the one hand, have been observing a pol- tion is still in process, as well as to mitigating the effects of the sovereign debt crisis that followed the financial melt down. On the 1 International Monetary Fund. World Economic Outlook: recovery, Risk and Rebalancing. Washington DC: IMF, Oct. 2010. 2 Ibid. ESPI Report 35 5 June 2011 other hand however, in the presence of very tal flows to advanced economies, while at the low interest rates and tax policies that pro- same time distributing financially beneficial gressively favour production rather than con- services to emerging countries. In fact, space sumption, such measures also increase the services can instigate growth in both cases, risk of deflation, if domestic private demand without creating the negative effects from is further reduced. On the short term, such capital flows mentioned above. Space infra- measures have already begun to create un- structure creates jobs both in advanced and employment, complicating the effort to re- emerging economies; it encourages global store consumption levels. On the medium synergies and enhances international coop- term, they could pose a threat to medium eration; and its operating costs are evenly and small enterprises that rely mostly on distributed among its users, who can never- domestic demand rather than exports. On the theless reap the full advantages of its use. As longer term, they could lead to further stag- space infrastructure is not based in any terri- nation and deflation as exports to emerging tory, it does not have any of the disadvan- economies will drop as a result of their rap- tages related to more traditional international idly improving position vis-à-vis the advanced investments or services’ exports, especially economies. for the importing countries. Furthermore, it allows space services’ providers to enjoy op- Emerging economies on the other hand have erational and financial flexibility that as we a completely different set of challenges to have seen consist a decisive advantage in meet. So far, most such countries have opted view of the crisis’ consequences for global to boost their domestic consumption in order economic integration. At the same time, it to remedy the drop in international consumer can benefit both from the fiscal consolidation demand due to the crisis.