The Expanding Space Economy: A Golden Opportunity for Canada

As a proud Canadian, I have dedicated my life to technology commercialization, working alongside early-stage innovators to bring groundbreaking products to profitable markets. The journey from concept to market can range from straightforward to highly complex, but it’s always exhilarating. We are in a new era of disruptive technology innovation driven by advancements in AI, Robotics, Biotech, MedTech, Deeptech, and an increasingly vibrant commercial space sector. Canada has played a significant role in space missions and capabilities. However, despite our contributions, we lack native launch capabilities. This must change to fully participate and lead as a nation in the global space economy. We must understand the urgency and importance of a well-coordinated national strategy and investments in space technology, as they are the key to our success in the global space economy.

The space economy is on the brink of an unprecedented era of growth and transformation. By 2035, the global space economy is projected to soar to a staggering $1.8 trillion, a significant leap from $630 billion in 2023. This rapid expansion is propelled by the increasing prevalence of satellite and rocket-enabled technologies that are revolutionizing various sectors of the economy (1, 2). For Canada, this burgeoning market presents a unique opportunity to leverage its rich history in space exploration and its robust technological and industrial base, a testament to our nation's prowess, and position ourselves as a key player in the global space industry.

A Booming Market

The space economy is projected to grow from $630 billion in 2023 to an impressive $1.8 trillion by 2035. This 9% annual growth rate far outpaces the global GDP growth, indicating a robust and dynamic industry. According to a McKinsey report, this growth will be driven by "backbone" applications, such as satellites and launchers, and "reach" applications that leverage space technology across various industries. For instance, Uber's ride-hailing services rely heavily on satellite signals for navigation and connectivity (1, 2). This growth presents a significant opportunity for Canada in terms of economic growth, job creation, and innovation.

The World Economic Forum highlights that space-based technologies will see increased integration across numerous sectors. For example, satellite communications, currently valued at $133 billion, are projected to grow to $218 billion by 2035. This segment will continue to be the largest within the space economy, driven by the deployment of large satellite constellations to enhance global connectivity. Positioning, Navigation, and Timing (PNT) services and Earth observation will grow substantially, catering to the rising demand for precise data and insights across industries like agriculture, energy, and finance (2, 3).

Beyond Traditional Space

The influence of the space economy is set to extend far beyond traditional hardware and service providers. Emerging sectors such as ride-hailing apps, which depend on space-enabled technologies like satellites, will capture an increasing market share. This shift opens many opportunities for Canadian tech companies to innovate and integrate space technologies into everyday applications.

Expanded Integration Across Sectors

The "reach" segment, which includes applications enabled by space technologies, is expected to grow at an 11% annual rate, surpassing the backbone segment. By 2035, it will account for nearly 60% of the space economy (3). This rapid growth will be fuelled by advancements in satellite communications and Earth observation technologies, which provide critical data for various industries.

Transportation and Logistics

One of the most significant areas of impact is transportation and logistics. Companies like SpaceX are already revolutionizing satellite internet with their Starlink constellation, which aims to provide high-speed internet access to remote and underserved areas globally. This enhanced connectivity can optimize global supply chains and improve the efficiency of transportation networks (1, 2).

Agriculture

In agriculture, Earth observation satellites offer invaluable data that can optimize farming practices. Companies such as Planet Labs provide high-resolution satellite imagery that helps farmers monitor crop health, predict yields, and manage resources more efficiently. This technology boosts productivity and supports sustainable farming practices by reducing the need for water, fertilizers, and pesticides (2, 4).

Financial Services

Space technology also significantly benefits the financial sector. Earth observation data is used to assess risks and inform investment decisions, particularly in real estate and insurance. For example, geospatial data helps insurers evaluate flood risks, enabling them to price policies more accurately and manage their exposure to natural disasters (3, 4).

Enhancing Everyday Life

Space-enabled technologies are increasingly becoming part of our daily lives. GPS, a technology we often take for granted, relies on a network of satellites to provide precise location data used in everything from navigation apps to ride-hailing services like Uber and Lyft. As these technologies evolve, their applications will become even more integrated into everyday routines, enhancing our quality of life and societal well-being (2,3).

Connecting People and Goods

The space economy will connect people and goods more efficiently and reliably. By 2035, five key sectors—supply chain and transport, food and beverage, state-sponsored defence, retail, consumer and lifestyle, and digital communications—are expected to generate 60% of the global space economy. Canada's robust infrastructure and technological advancements position it well to capitalize on these sectors.

Here are a few examples of how this connection is being realized:?

Supply Chain and Transport

Enhanced satellite communications are transforming supply chain management. Thanks to satellite-enabled technologies, real-time tracking of goods and improved logistics coordination are now possible. Companies such as Maersk are using satellite data to optimize shipping routes, reduce fuel consumption, and ensure timely delivery of goods. This efficiency cuts costs and reduces the carbon footprint of global transportation networks (2,5).

Digital Communications

Satellite technology bridges the digital divide by providing internet access to remote and underserved regions. Projects like OneWeb and SpaceX's Starlink are deploying low Earth orbit (LEO) satellites to offer high-speed internet globally, ensuring that even the most isolated communities can connect to the digital economy. This connectivity enables remote education, telemedicine, and e-commerce, fostering economic inclusion and growth (2,6).

State-Sponsored Defense

The defence sector continues to be a significant driver of the space economy. Governments invest heavily in space-based defence capabilities, including surveillance, communications, and navigation systems. For instance, the Canadian Space Agency (CSA) collaborates with international partners to enhance satellite surveillance and improve national security through advanced space technologies (3,6).

Strategic Imperative for Canada

Strengthening Canada's position in space is a strategic imperative. For the country’s economic competitiveness and productivity, national security, and critical services for citizens, Canada needs to bring energy and determination to the new space race. According to Deloitte, ensuring a robust space economy is not just about economic growth but also about creating high-quality jobs, fostering innovation, and improving the quality of life for Canadians. This should make us feel proud and motivated, knowing that our involvement in the space economy can bring significant societal benefits.

A recent Deloitte Canada report outlines several recommendations to achieve this, emphasizing the need for a well-coordinated national strategy. The report suggests creating a National Space Council to oversee and integrate space policies across various sectors, similar to the approach taken by the United States (7,8). This council would help streamline governance, modernize the regulatory framework, and promote collaboration between the public and private sectors (7).

Moreover, investments in space technology are critical for national security. Enhanced satellite surveillance can improve border security and disaster response capabilities (7). For example, satellite imagery can monitor natural disasters in real-time, enabling quicker and more effective responses to emergencies (9).

Investing in space also supports Canada's innovation ecosystem. Space technologies drive advancements in AI, robotics, and other high-tech fields, creating jobs and fostering economic growth (9,10). Space exploration inspires young Canadians to pursue STEM careers, ensuring a future workforce equipped with the necessary skills to compete globally(10,11).

More Than Just Financial Gains

The benefits of investing in the space economy extend beyond financial returns. Space technology will be crucial in addressing global challenges and enhancing societal well-being. Here are some key areas where space technology is making a difference:

Disaster Warning and Climate Monitoring

Space-based technologies are revolutionizing how we predict and respond to natural disasters. Satellites provide critical data for early warning systems, helping accurately forecast hurricanes, earthquakes, and other natural calamities. This enables timely evacuations and better preparedness, ultimately saving lives and reducing economic losses. For example, during Hurricane Harvey, satellites provided vital information that helped manage the emergency response effectively (3,6).

Climate monitoring is another crucial application. Satellites track environmental changes, from deforestation and greenhouse gas emissions to polar ice melt and sea-level rise. This data is indispensable for researchers and policymakers who are working on climate change mitigation strategies. For instance, the European Space Agency's Copernicus program delivers detailed environmental data about global climate policies and actions (6,9).

Humanitarian Response and Global Health

Space technologies are also significantly contributing to humanitarian efforts. Satellite imagery and data help organizations like the United Nations and Red Cross assess disaster-affected areas, coordinate relief operations, and monitor aid delivery. This capability was evident in the aftermath of the Nepal earthquake in 2015, when satellite data was used to map the extent of the damage and plan rescue missions (9,11).

Moreover, space-based communications enhance global health by supporting telemedicine in remote regions. Satellites enable medical professionals to diagnose and treat patients in isolated areas, providing critical healthcare services that would otherwise be inaccessible. Projects like the European Space Agency's Satellite for Health Early Warning and Real-time Medical Information (SatCom-HEART) are pioneering these efforts (9).

Bridging the Digital Divide

One of the most transformative impacts of the space economy is its ability to bridge the digital divide. Satellite technology fosters digital inclusion by providing high-speed internet access to underserved and remote communities. This connectivity supports education, economic development, and social integration, ensuring more people can participate in the global digital economy. Companies like OneWeb and SpaceX's Starlink are leading the charge in this domain, deploying extensive satellite networks to bring the internet to every corner of the globe (2,3).

Where to Next?

Canada has a unique opportunity to lead and innovate as the space economy approaches new frontiers. The country’s rich history in space exploration, coupled with its strong technological and industrial base, positions it well to play a pivotal role in this dynamic sector. By leveraging its expertise and investing in space-enabled technologies, Canada can drive economic growth, create high-quality jobs, and enhance national security.

Moreover, Canada’s commitment to sustainable development and international collaboration can help address global challenges such as climate change, disaster response, and digital inclusion. Canada can contribute to a more connected and resilient world by fostering innovation and supporting space-related initiatives.

The future of space is not just about exploration; it's about harnessing the power of space to improve life on Earth. With visionary leadership and strategic investments, Canada can be at the forefront of this exciting journey, shaping the space economy for the benefit of all humanity.

?References

1.???????? McKinsey & Company. "Space: The $1.8 Trillion Opportunity for Global Economic Growth." April 8, 2024. (https://www.mckinsey.com/industries/aerospace-and-defense/our-insights/space-the-1-point-8-trillion-dollar-opportunity-for-global-economic-growth).?

2.???????? New Space Economy. "World Economic Forum Forecasts a $1.8 Trillion Space Economy by 2035." 2023. (https://newspaceeconomy.ca/2023/04/08/wef-space-economy-forecast-2035/).

?3.???????? European Space Agency. "Copernicus: Europe's Eyes on Earth." 2023. (https://www.esa.int/Applications/Observing_the_Earth/Copernicus).

4.???????? Planet Labs. "Satellite Data for Precision Agriculture." 2023. (https://www.planet.com).

?5.???????? Deloitte Canada. "Reaching Beyond: A $40 Billion Canadian Space Economy by 2040." January 22, 2024. (https://www2.deloitte.com/ca/en/pages/technology-media-and-telecommunications/articles/canadian-space-economy.html).

6.???????? BNN Bloomberg. "Reaching for the Stars: Space Sector Could Generate $40B by 2040." 2024. (https://www.bnnbloomberg.ca).

7.???????? Innovation, Science and Economic Development Canada. "Canadian Space Strategy." 2019. (https://www.asc-csa.gc.ca/eng/publications/new-space-strategy-for-canada.asp).

8.???????? Space Canada. "Prioritizing Canada’s Space Sector." 2024. (https://spacecanada.ca).

9.???????? Government of Canada. "Exploration, Imagination, Innovation: A New Space Strategy for Canada." 2019. (https://www.ic.gc.ca/eic/site/062.nsf/eng/h_00001.html).

10.??? Canadian Space Agency. "State of the Canadian Space Sector." 2018. (https://www.asc-csa.gc.ca/eng/publications/state-canadian-space-sector-2018.asp).

11.??? Innovation, Science and Economic Development Canada. "Departmental Plan 2024-2025." 2024. (https://ised-isde.canada.ca/site/departmental-plan/en).