The European Space Tech Market Is Ripe for Disruption

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By Stuart Carlaw | 4Q 2023 | IN-7139

After a productive week of meetings and conference sessions at Space Tech Expo Europe in Bremen, it was apparent that the industry faces some real challenges and the pace of change in the industry is not well aligned to ensuring that the obstacles are overcome and opportunities grasped in a reasonable time frame.

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Endemic Issues Confront European Space Tech Progress


The European space tech community is wedded to a traditional government-led geo-centric approach to business. It is particularly poorly placed to compete in a future vision of space due to a number of key reasons:

  • The insatiable focus on funding from government sources as both a mechanism for creating solutions and then paying for services, which is fundamentally reducing the momentum and incentive to look for commercial successes.
  • A dominant hardware approach to the market is causing “lock-in” to solutions and reducing scale.
  • Sovereignty is a big issue. There are lucrative proprietary islands of value that detract innovators from broader market engagement.
  • There is a lack of standardization across the major building blocks of the solution—from hardware design to ground station architecture and everything in between. It creates a situation that retards scale, but also restricts the ability of third-party authentication and certification to ensure better quality of product and service.
  • It was very clear that cybersecurity by design, zero trust environments, collaboration, and standards-based security are largely ignored, paid lip service, or downright unfamiliar. The status quo of security by obscuration is unsustainable.
  • Launch capacity in Europe is streets behind the rest of the world and the United States, in particular. The balance of power and influence in the ability to scale into mass applications lies with those that can build the most robust and capable networks in the timeliest fashion.
  • The ability to scale manufacturing of space infrastructure is also a massive hurdle. Low Earth Orbit (LEO) constellations of cube and small satellites and the notion of “time to space” will necessitate a much more integrated and fast-paced approach to satellite manufacturing.
  • The most fundamental aspect plaguing the market is the disconnect between the system vendors and an understanding of the commercial value the system provides or the needs of potential commercial customers. They, in general, don’t know how to monetize their assets.

New Space and Commercial Applications Are the Future


If the market constituents can embrace and acknowledge the issues outlined in the previous section, if they have the organizational agility to respond, and if they have the appetite for change, then there are clearly several key opportunities and initiatives that will drive positive outcomes:

  • LEO is the future. If you don’t have a LEO play, especially as a service provider, you are going to struggle to maintain market position in the long run. Watch out for government services moving off custom Geostationary Earth Orbit (GEO) products to some LEO networks for specific applications.
  • Multi-application satellites are a no brainer. They hold the key to opening new revenue streams for singular space assets and future-proof investments.
  • Software-defined architectures are also key to future-proofing investment, but also to providing economies of scale and the ability to dynamically adjust to market demand. Particular attention should be paid to both the space asset side of the equation and the ground stations.
  • It should be recognized that commercial grade will be good enough for some government businesses. It is common in other markets and, in all honesty, commercial grade in adjacent markets is better quality that customized government use in many instances in the space tech market.
  • Zero trust and a standards-based approach must be adopted for space cybersecurity. It should involve independent accreditation and verification, and should include a mechanism for community reporting and ethical hacking.
  • Standard common hardware should be a focus for the industry. This could include launch vehicle housings and release mechanisms—all the way to adapter plates for space debris de-orbiting.
  • Start listening to the wider marketplace in terms of need and develop a clear value proposition for extended services in markets such as the Internet of Things (IoT), supply chain, utilities, extractive industries, and industrial. There are massive greenfield opportunities for the right solution with the right balance of cost and capability.
  • Finally, learn the lessons from adjacent marketplaces. Telco, cloud, and industrial market participants have, or are in the process of, solving many of the market and tech issues that the space market is facing. Borrow, steal, and beg for collaboration. It will speed up time to change and likely result in better outcomes.

3 Clear Major Imperatives to Ensure Europe Remains a Space Power


Boiling all this down to the simplest of strategies can be somewhat impossible. However, if the industry players followed the simple mantra below, the chances of success will be much higher.

  • Digitize: Incorporate wider commonly accepted and market-proven approaches and architectures from adjacent markets into products and solutions.
  • Standardize: This is key in all domains and wherever possible. Focus on hardware, software, cybersecurity, and testing as priorities.
  • Commercialize: Diversify revenue streams, listen to the new wave of potential end customers, and hone a value proposition beyond hardware.

I don’t personally hold out much hope for many of the companies in the current European space segment, but am equally hopeful that there are some that have the DNA to succeed. I look forward to 2024 to see if any of the above is embraced.