Military satellites, India, and “the space economy”

Welcome to the fourth edition of Space Industry Insights - a fortnightly publication by satsearch discussing some of the trends and stories we’re observing at the global marketplace for space .

Commercial input into military satellite development: perspectives on developed and developing nations

By Omkaar K.

The defense sector has traditionally been a prime consumer of satellite resources, with government agencies serving as the main supplier of upstream and downstream assets. However, this landscape has seen some changes in the past decade with the expansion of commercial NewSpace companies .

Australia, China, France, India, Russia, the UK, and the United States, are some of the most prominent nations where defense agencies are developing space assets with the help of NewSpace companies for military purposes.

The United States remains the key player, arguably alongside Russia, to experiment, develop, and scale military space assets for defense and security agencies. As the privatization of the space industry has reduced costs in the upstream market, developing countries such as India are also investing heavily in the development of military space assets.

While several developments are underway globally, the asset management and investment drivers still need to be assessed carefully to help nations, particularly in developing countries, best manage military space resources. To better understand these perspectives, let's take a look at three of the key trends in this area:

Exploring new avenues to create opportunities

For any developing country, resource crunches will always be a challenge, especially for nations with large populations. Military agencies can turn this challenge into an opportunity by, for example, reducing reliance on traditional large GEO satellites and instead tapping into opportunities with smaller GEO satellites. This can significantly reduce the overall defense budget and simultaneously also help NewSpace companies to generate business opportunities as well as uplift the cooperation between private and public sectors.

Mapping commercial hotspots in the supply chain to open gateways for NewSpace companies

Military satellite development is not only about the upstream market, but is also about downstream space solutions. Satellite network management systems, cyber security solutions , and component developers are good examples of some of the critical areas where defense agencies can integrate the solutions of commercial NewSpace companies and, in the process, accelerate the development of military space solutions .

Monitoring and assessing the functioning of government agencies responsible for military space asset management

The current sphere of global military space structures can be characterized as having too many agencies and too many management responsibilities. The United States and India are two prime examples of nations where the branching of multiple agencies has taken place in order to develop, deploy, and manage space solutions for defense and security agencies.

As the creation of these agencies requires a significant amount of budget for day-to-day functioning, governments should carefully analyze the required output. This will not only help manage the organizational structure effectively, but will also trigger the necessary actions to iterate the budget allocation for each agency.

Managing the development of military space assets is not necessarily a complex task, but balancing the economical aspects along with integrating NewSpace companies needs more high-quality management systems. This will potentially also boost cooperation between public and private space enterprises .

The international opportunities for India’s space industry - part two

By Kartik Kumar

In the last edition of Space Industry Insights I discussed the opportunities for Indian companies to create international commercial success. But for this to be achieved, at significant scale, there are a number of pivotal factors which need to be in play and, indeed, which are starting to emerge from the slew of space startups that have popped up within the country.

At the 2022 India Space Congress in New Delhi there were a variety of panels over a few days to explore the technical and regulatory aspects of enabling growth of this market. It will be interesting to see how, over the coming couple of years, the landscape changes and the extent to which the Government of India is able to allow for free enterprise.

One of the primary challenges for a country like India is to weigh up the importance of indigenizing technologies versus importing critical components . This was a topic of discussion at the Congress and one that is likely to play an important role in the industry’s evolution, given the increasing geopolitical tensions around the world and the subsequent impacts on supply chains.

Moving forward, India is definitely one to watch in the space industry and it is important to understand the nexus that exists in Asia, with China having set out ambitious plans for sovereign capabilities in space towards civil and military applications. India has a fair distance to go to catch up with developments in China, however, comparatively, it is working on a shoestring budget.

As new space companies in India are able to demonstrate the viability of the commercial business models, it's likely that we'll see more domestic and foreign money pouring in.

In the next part of this article series, which will be published in January 2023, I will go deeper into the public and private sector changes that are (or at least could be) combining to facilitate growth in India’s space industry.

Why a clear definition (and economic assessment) of the space sector is so important

By Hywel Curtis , with insights from Pierre Lionnet of ASD-Eurospace

As our industry progresses we’re seeing greater use, and confusion, of various different terms and definitions. The space economy is a perfect example. Having a good economic definition of the space sector is very important for a number of reasons.

Firstly, it helps to clarify and distinguish the space industry from other industries, such as aviation, defense, and electronics . This can help to ensure that the unique challenges and opportunities faced by stakeholders in the space industry can be better understood and addressed by policy-makers and regulators.

Secondly, a good definition of the space sector can help us all to promote the growth and development of the space industry as a whole. By providing a clear framework for understanding the various components of space systems markets, policy-makers and investors can better evaluate the potential opportunities and risks associated with different space-related ventures . This, in turn, can help to attract investment and support the development of new technologies and business models.

Third, a good definition of the space sector can also help to highlight the non-commercial economic benefits of space-related activities. For example, as we all know by now (I hope!) satellite technologies can provide a wide range of services , such as telecommunications, navigation, and weather forecasting, which can have significant economic, social, and scientific value.

In addition, the exploitation of space-based resources, such as rare minerals and water, could provide new sources of revenue and support the growth of the space sector or enable new ventures yet to be conceptualized. All of these positive stories need to be told, but told within the context of a clearly defined industry sector so that public perception is enhanced.

Overall, having a good definition of the space sector is crucial for promoting the growth and development of the space industry. As mentioned, by providing a clear framework for understanding the articulations of space markets and the creation of value throughout the supply chain , policy-makers and investors can better assess the potential opportunities and risks associated with different space-related ventures, and help to support the growth of the industry as a whole.

In contrast, the recurrent use of the non-specified term the space economy, with the shortcomings and methodological inconsistency of the economic framework often proposed, leads to blurring of the real picture and creation of false expectations. Some of these have been exemplified by the recent financial bubble and the speculative forces surrounding NewSpace, and have generated a level of disappointment due to system underperformance, higher than expected costs, and insufficient market uptake.

Even so, the future for the space sector as a whole is certainly looking bright - but it is important for all stakeholders to keep in mind what we’re actually talking about when we say that!