ANALYSIS - Space, the new address of global competition

The author is a MEng. at University of Southampton

SOUTHAMPTON

Global competition heats up as the space economy grows.

While space activities are expanding and diversifying day by day, the space economy is getting deeper and deeper.

At present, the new address of global competition in space. As a result of this dramatic competition, the space industry is growing and the space economy is expanding.

Russia has announced that it has successfully tested anti-satellite missiles in space for the first time. Washington accused Moscow of endangering the crew of the International Space Station (ISS) after the Defense Ministry announced on November 15 that it had hit the Russian "Tselina-d" spacecraft, which has been in orbit since 1982 and is no longer operational.

NATO Secretary-General Jens Stoltenberg said the test was 'reckless,' posed a threat to the ISS and an orbiting Chinese spacecraft, and showed Russia was developing new weapons systems.

On the other hand, Russia reminded us that similar activities were carried out by the USA, China, and India before.

This tension, which reminisces the competition reflected in space activities during the Cold War, brought the space economy and industry, growing day by day, to the plan again.

Space activities, which started in the Cold War after the Second World War, have enormously accelerated in the 21st century.

The space industry in which global competition accelerates the most has shined more in recent years. From space tourism to space mining, from space communication to satellite and rocket technologies, space research and high-tech products and services that are gaining importance in aviation have been attractive for visionary countries and private entrepreneurs' search for new opportunities.

The Space Economy is growing and evolving along with the development and profound transformation of the space industry. This transformation brings with it the social and economic integration of the space industry. While a limited number of countries were directly involved in the space industry 20 years ago, many countries have become interested in the space industry in recent years. Today it is also becoming accessible to a new range of private companies, academic institutions and public sector users for scientific research and commercial endeavor.

On 20 and 21 September 2021, G20 Space Economy Leaders Meeting 2021 was organized in Italy. Over two days, Heads of the G20 Space Agencies discussed the contribution of the Space Economy to the global economy and the need to continue raising awareness among the G20 community, with the ultimate goal of including space among the topics of the Summit.

The meeting was an opportunity to discuss future projects and scenarios in the industry in a context where space is a vital economic resource for the prosperity of humanity. Space resources are increasingly linked to critical areas, such as communications, transports, health, agriculture, environment and climate, which pave the way for a wide range of industries and new markets, resulting in employment, an increase of opportunities and better living standards in the countries around the world.

The Space Economy is defined by OECD (2012) as the full range of activities and the use of resources that create value and benefits to human beings in the course of exploring, researching, understanding, managing and utilizing space.

The global landscape for space activities has improved in recent years, with new countries investing in space research and development and joining global value chains. Private financing of commercial projects also increased, with unprecedented private capital flows in the space sector.
With satellites registered in orbit in more than 80 countries and ever-growing public and private investment, there has never been more interest in the space industry. The size of the global space economy has reached 447 billion US dollars. According to Space Foundation, a nonprofit advocacy organization founded in 1983 for the worldwide space ecosystem, published "The Space Report 2021 Q2," which found that in 2020, the global space economy rose to $447 billion, an increase of 4.4% from a revised 2019 total of $428 billion. The report says this $447 billion space economy is 55% higher than a decade ago and part of a five-year trend of uninterrupted growth. Commercial space activity grew 6.6% to nearly $357 billion in 2020, still representing close to 80% of the total space economy. Global government space spending fell 1.2% in 2020 to $90.2 billion from a revised 2019 peak of $91.4 billion. Nearly 58% of this total was allocated to space activities by the US.

Reflecting on these data, Space Foundation CEO Tom Zelibor said, "The global space ecosystem is an emerging force for continued growth and expanded opportunity worldwide. The Space Report's Q2 findings verify that the global space economy not only weathered but emerged stronger from the worldwide pandemic that spanned three-quarters of the year. It also validates the strength and resilience of the space ecosystem and illustrates why it's well-positioned for growing investment, market development, and employment opportunities across multiple sectors."

Morgan Stanley's Space Team estimates that the global space industry could surge to over $1 trillion by 2040. The team states that the biggest share here will belong to the internet provider.

Global Space Industry Estimation

The Government-led model has accelerated space activities. In recent years, the private sector has also started to take responsibility for space activities.

Space activities, which started in the Cold War period after the Second World War, entered a new phase in the 21st century with the participation of new players and the transformation of technology. The fact that the high costs of space exploration began to be made with more affordable solutions contributed to the transformation of the space industry. One of the essential solutions is the successes of companies such as Space X and Blue Origin in reusable rockets. Private space and aerospace companies that started commercial flights developed rockets and related vehicles carrying low-orbit space agencies, orbital satellites, and other vehicles. These companies also turned to projects in areas such as space mining and space tourism.

It is predicted that the space economy will become much deeper with the spread of cost and time efficiency to the value chains of the entire space sector. And also, the space sector is not only a growth sector itself but is the vital enabler of growth in other sectors. Today, deployed space infrastructure enables the development of new services in sectors such as energy, security, meteorology, aviation, telecommunications, maritime, transportation and urban development, resulting in additional economic and societal benefits.

According to the OECD, which has systematically provided data on space activities since 2007, the lion's share of initial investments in launchers, satellites and other space-related infrastructure is made by governments, which increasingly try to measure the impact of space programs and the application of space technologies on the economy and society.

The countries' space programs vary depending on the geographical location of the nations, their technological competencies, the country's economic capacity, their international cooperation capabilities, economic multipliers, and international demands.

Public investments represent the bulk of funding in space activities, amounting to some USD 90.2 billion in 2020 despite the new burdens brought by COVID-19. The United States is indisputably the country that invests the most in space exploration. Russia and France follow it.

Government Space Budgets as a Share of GDP (2020) (%)

Although public investments lead to space expenditures, efforts are increasing to transfer responsibility to the private sector. It is expected that COVID-19 will reinforce and accelerate the pre-pandemic trend of public-private partnerships and space commercialization. As private sector capabilities mature, public institutions transfer more responsibility and risk to non-governmental actors and companies. Korea and India are transferring technologies and know-how on satellite and launcher manufacturing to private actors. NASA is extending service buys to space exploration (e.g., lunar payload service contracts). China is encouraging private financing and initiatives in the sector.

The importance of international cooperation in space activities is also increasing. One of the most important issues of space exploration in the new era will be international cooperation. Space exploration is a kind of global public good. The collective action of countries is the key to the effective and efficient use of costs and know-how. For instance, Space Fence, LMT's space object tracking system, like several other programs, is the product of substantial cooperation between countries. In this case, Space Fence will be shared by at least eight countries (US, Australia, Japan, Italy, Canada, France, Republic of Korea, and the UK) and the ESA. Shared resources are force-multipliers for countries that would not be able to afford their platforms.

Turkish Space Agency President Serdar Huseyin Yildirim also emphasizes the importance of international cooperation in space activities. Yildirim stated that they want to be included in the programs carried out with international collaboration. Touching on the current issues about production in space, Yildirim said that it is planned to establish seven platforms in the world's close orbit and start production on these platforms, especially in the fields of crystallized structures and biotechnology. Yildirim stated that these seven platforms have begun to be created by different countries and companies gradually and expressed their interest in these platforms.

Turkey is an emerging player in space competition.

One of the countries that have achieved an important position in the global competition in space activities is Turkey. The idea of Turkey's existence in space began to emerge in the late 1960s. However, the first satellite, TÜRKSAT 1B, which was successfully put into service, was launched into space on August 11, 1994, approximately 34 years later. Turkey has sent national satellites to space. It officially established the Space Agency in 2018. Turkish Space Agency (TUA) is in charge of, among many other tasks, developing a competitive aerospace industry, developing scientific and technological infrastructures and human resources in space technologies, increasing capacity and capabilities. The main goal is to cross the determined space limit in the shortest time frame, first to reach low orbit and then to reach the moon, the satellite of our world. The experience gained in satellite production has accelerated the process of producing probes and space modules in the other artificial satellite class. National Global Positioning System (GPS) and targets to have their own space launch locations are part of strategies to reduce foreign dependency, as is the case in the national defense industry. Turkey's struggle in cosmic competition has been going on since 1985. The main infrastructure of this competition was laid in the 2000s. The intelligence satellite GOKTURK-2, which Turkey produced with its own means and launched into space in 2012, is one of the first examples. Thus, Turkey has become one of the few countries in the world capable of producing satellites. Now GOKTURK-3 is next. Planning studies continue for this satellite, which will be able to obtain high-resolution images in all weather conditions, regardless of day or night.

As a result, space, where global competition accelerates, will be the new stage of the world economy soon. To exist in every aspect of this race, governments and the private sector continue to seek new opportunities.

References

Claire Housley and Elizabeth Rough, The UK Space Industry, Briefing Paper, Number CBP 2021-9202, 22 April 2021, House of Common Library.

OECD, Handbook on Measuring the Space Economy, 2012.

OECD, Measuring the Economic Impact of the Space Sector: Key Indicators and Options to Improve Data, 2020.

OECD, Space Economy For People, Planet And Prosperity, 2021.

Space Foundation, The Space Report 2021 Q2, 2021.

OECD, The Space Economy in Figures: How Space Contributes to the Global Economy, 2019.

Turkey’s National Space Program, 2021.