Innovation in the sector has a beneficial knock-on effect in all of the numerous sectors it touches. To put it more simply, if the space sector flourishes, almost every other sector thrives, too, Bogdan Gogulan writes.
Productivity is the cornerstone of economic growth, and across Europe, and in the UK in particular, growth is stalling.
Although the latest eurozone data shows record employment, inflation remains well above the European Central Bank’s 2% target, standing at 5.3% for July. And growth, EU Economy Commissioner Paolo Gentiloni said, will likely "remain subdued" for the rest of the year.
Discussions of how to solve this problem have by and large concerned the role of central banks in curbing rising prices.
What has been discussed much less is the role that certain sectors have to play, one of which is space, where a non-cyclical, sustainable means of growth across agriculture, transportation, telecoms and other key sectors exists.
Space, though bound up in our imaginations with planetary exploration, science fiction and the mind-bending theories of Albert Einstein, plays a vital role down here on Earth.
It is a largely unseen and unsung force that pushes progress and productivity in a large and increasing number of ways.
Innovation in the sector has a beneficial knock-on effect in all of the numerous sectors it touches. To put it more simply, if the space sector flourishes, almost every other sector thrives, too.
Space already gave us more than you think
Space innovation means, to give a few examples, higher-resolution imaging, faster communication, more precise positioning, and more timely data, all of which boost efficiency – and sustainability – across traditional industries.
In agriculture, satellite technology enables and enhances precision farming and irrigation management. In transportation, navigation, autonomous driving, and logistics optimisation. In telecoms, laser communication, network resilience, and 5G.
It is only a matter of time before every company’s reliance on space is such that every company becomes, to a greater or lesser extent, a space company.
Moreover, innovation in space has historically led to the invention of other technologies that have huge implications for productivity.
The powerful cameras found in smartphones were originally designed to fit on spacecraft. Wireless headphones came about because NASA needed to keep astronauts connected while keeping their hands free.
Laptops and the computer mouse, home insulation, prosthetic limbs – all of these were products of space innovation.
Space-related innovation is also behind advances, not just in computing, but in medicine, materials, and miniaturisation.
Up, up and away
Happily, the rate of transformation in the space sector is high. In 2021, the high-throughput communications and connectivity between ground and space was 2.7 terabytes per second.
Last year, it was 21 terabytes per second. In 2023, it is 48 terabytes per second – so far. There were 186 successful rocket launches – a 28.2% increase on the year before – in 2022 as well.
The Space Foundation has noted that in the first half of 2022, more spacecraft (1,022) were sent into orbit than were managed in the first 52 years of the Space Age.
In respect of investment in space tech, Europe outpaced the US for the first time this year.
Though it is almost certain that US investment will move back ahead of Europe in the near future, the fact that Europe is now a legitimate competitor to the US in this area reflects a growing recognition across the continent that space is a vital sector.
In the race for European space investment, the UK comes top: a PwC-UK Space Agency report showed that the UK has been the leading destination for space investment in Europe – second internationally, behind the US – since 2015, receiving 17% of global investment.
Thinkers and doers will 'move fast and break things'
All this ought to give us cause for enormous optimism, to say the least. Advances in space increase productivity and growth across other sectors and economic growth in general.
Given the importance of satellites alone in gathering accurate climate data, optimising agriculture, strengthening national security, and making supply chains more robust, we can anticipate that space will only become more relevant in our collective efforts to confront global challenges -- many of which, in the form of ESG, are becoming increasingly enmeshed with the business world.
And that will push thinkers and doers to "move fast and break things", in Mark Zuckerberg’s famous phrasing: to keep innovating, thus increasing the capacity of space to drive productivity and growth not just in Europe or North America, but across the globe.
Bogdan Gogulan is CEO and Managing Partner at NewSpace Capital, a space-focused private equity firm.
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