For the first time world government space spending exceeds $50 Billion
Euroconsult’s new report on the states of play and prospects for government space programs worldwide has identified over 60 active public civil and defense space programs around the world cumulating over $50 billion spending in 2006. Continuous growth in government spending is expected after this historical peak confirming the good shape of the government market while the commercial market remains fragile.
A changing market environment increases new cooperation opportunities in the civil market
Increasingly more countries build up investments in civil space programs with worldwide public expenditure estimated $27.8 billion in 2006. Key factors for growth include
• Growth of the US civil space program with $17.3 billion allocated in 2006 in order to support space science and exploration programs
• Spectacular recovery of the Russian program with a clear effort by the Russian government to expand and modernize capabilities. Investments increased from $195 million in 2001 to $821 million in 2006.
• A dynamic Asian market. Indian and Chinese space programs have experienced the most impressive expansion and should keep their pace in the medium term. Both have prioritized self-reliance and positioned themselves as leading partners for both established and emerging countries. South Korea and Malaysia should emerge as other regional leaders
• Multiplication of initiatives worldwide: Whereas a dozen countries devoted a significant budget to their civil space program in the early 1990’s, the number has doubled ten years after offering new business and cooperation opportunities. Space agencies have been created in several countries such as Algeria, Chile, Malaysia, Nigeria and Turkey. These countries focus on programs from which they can reap direct benefits and develop local capabilities, mainly observation (environment monitoring, security & defense)t and telecommunications (broadcasting, telemedicine…).
Earth Observation shall be the focus application for the next ten years
Earth observation is the second largest civil space application worldwide. The estimated world government investment in this area is $4.6 billion in 2006 for both unclassified defense and civil space programs. This represents a 6.8% average annual growth over the period 2002-2006.
It is the priority program area for a large number of countries due to its contribution to environment, defense and security and relative low cost.
Earth observation is the main area of interest for emerging countries, including in Asia (eg Thailand) and Latin America (eg Chile) with more and more countries planning to develop domestic capabilities.
A dynamic European market: European countries are renewing/developing national capabilities essentially for dual purposes, including Spain (Seosat), France (Pleaides, Helios 2), Germany (Sar Lupe) and Italy (Cosmo Skymed). In addition, EO programs are experiencing new management models with public private partnerships projects (RapideEye, TerraSar). These initiatives are witnessing better market acceptance for Earth Observation products and services and a better understanding of business models from the finance community.
A lucrative US market: the US DoD has an unchallenged program mainly directed by the National Reconnaissance Office (NRO) who manages classified programs essentially oriented towards surveillance/reconnaissance applications and roughly estimated at about $10 billion. Contribution of the private sector is an essential component of the military program with two standing contracts Clearview and Nextview to Digital Globe and GeoEye to secure imagery access for an estimated annual value of $500 million.
Earth Observation programs shall remain the focus application in the future, with 32 % of the satellite planned (77 satellites) for the next ten years. It is the favored applications for emerging countries since it provides high return for a relatively low level of investment. In addition, established countries have set environment purposes as a clear priority in their space agenda (Japan, Europe, Canada in particular)
EO Program multiplication in emerging markets
Euroconsult is an employee-owned company with over 500 clients in 50 countries. Since its creation in 1983, the company has become a worldwide reference for expertise and independent advice on satellite application and digital broadcasting for innovative and high-technology companies.
Euroconsult’s service capabilities include independent assessments of business plans and government policies, market assessments, financial valuations, risk assessments and feasibility studies. Euroconsult also host the World Satellite Business Week, September 3-6, 2007, Hotel Westin, Paris. (http://www.satellite-business.com)
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