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EP: Space sector offers new and exciting economic horizons

@ The Parliament. Written by Elżbieta Bieńkowska on 7 March 2016 in Opinion. The EU is losing its competitive edge within the space sector, but the Commission has a plan to remedy this, writes Elżbieta Bieńkowska.

The EU space sector is a motor for innovation and economic growth. It is an essential pillar of the Europe 2020 strategy, which aims to strengthen industrial competitiveness, create highly skilled jobs and boost innovation all over Europe and well beyond the space sector. EU space policy is first and foremost about bringing benefits to citizens.

The space industry has the potential to create new jobs, boost growth and stimulate investment, in particular through the development of downstream services in the emerging sectors of global navigation and earth observation. These services will soon become possible, as the European space infrastructures of the Galileo and Copernicus programmes become operational.

A strong space industrial base and an adequate legislative framework are prerequisites for developing strong space-based services. To further support this strategic industry in preserving and strengthening its competitiveness on the global market, we must address its main challenges.

Globally, competition is building up from both established and emerging space powers. Space activities are be becoming increasingly internationalised and globalised. The environment is changing, and changing fast.

The European space industry is highly dependent on commercial markets; it has to rely on smaller budgets and smaller institutional markets than our competitors, including smaller defence markets and less developed synergies between the civil and defence sectors. Technological independence, security of supply and independent access to space are not fully guaranteed.

Elsewhere, new business models are emerging that benefit from private financing alternatives, which are more developed and adapted to support space innovation than in Europe.

The first satellites for Copernicus and Galileo have been deployed and services are beginning to come online, but the market uptake of both of these needs to be secured for new business opportunities. In parallel, infrastructure is needed to handle the enormous flow of data they will produce and we must prepare the next generation of both of these programmes.

Therefore, within the current multi-annual financial framework (MFF), the overall funding for EU space programmes will be more than doubled, to about €12bn for 2014-2020, compared to €5.2bn for 2007-2013. This is alongside support efforts on the part of the European Space Agency (ESA) and the member states.

In comparison to other players in space, the European institutional expenditure is still relatively small. The funding level in Europe is less than a quarter of that of the US.

While the EU represents 13 per cent of global space budgets, compared to 57 per cent for the US. Increased spending in other parts of the world is pushing Europe lower in the ranks. Given this challenging context, we need to optimise the use of all existing EU funding opportunities.

We should not simply rely on space programmes, but also make use of the European fund for strategic investments, or programmes such as the European programme for SMEs (COSME), to unleash the full potential of the European space industry.

The Commission is committed to fostering the right environment to enable this sector to remain competitive in the years to come. Future EU spending on space policy will be based on the economic rationale of a desired return on investment through economic activities, innovation and new services that can be developed.

At the same time, it is important to attract new players to the space industry and open up new market opportunities for space-based applications and services. For this to happen, we need to develop a clear strategic vision together with all the stakeholders.

This year, the Commission will present ‘A space strategy for Europe’. The fact that this initiative was included among the Commission’s key priorities for 2016 clearly shows the importance of the space sector for Europe as a driver for growth, competitiveness and jobs.

The strategy will, among other things, address the market uptake of Galileo. For Copernicus, the strategy will focus on robust data dissemination architecture, new business models and promoting the use of space data by end users.

But beyond Galileo and Copernicus, we will look at the framework conditions and industrial policy tools that we have to foster new market opportunities, particularly in the downstream sectors. There is a tremendous economic potential we want Europe’s industry to tap into. This concerns big companies as well as SMEs and start-ups.

We must also analyse and discuss potential new initiatives to address the global challenges in areas such as space, defence and security, or space and climate change. We will examine how the competitiveness of European industry could be strengthened on the global market.

And finally, we want to look into the conditions for autonomous European access to space. As a global political player, access to space is a priority for the EU and will become even more so in the future.

This strategy will be developed in full transparency and in collaboration with all our strategic partners – the member states, ESA and industry.

The Commission will put in place a broad and inclusive consultation process with all stakeholders, including an online consultation.

To conclude, 2016 will be an important year for European space policy. We will continue to develop Galileo and Copernicus’ constellation, prepare their future market uptake and address several strategic questions. Our objective is to position Europe as a main global space actor. I count on all the European space actors to reach this common goal.

About the author
Elżbieta Bieńkowska is European internal market, industry, entrepreneurship and SMEs Commissioner

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