ESA Space Economy – Understanding data on the space sector’s economic value

ESA Space Economy – Understanding data on the space sector’s economic value [Jul/2024]

As published by the Organisation for Economic Co-operation and Development (OECD) in 2012, the space economy is 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 utilising space (OECD, Handbook on Measuring the Space Economy, 1st Edition, 2012).

The definition, applied by the European Space Agency, and developed through the work of the OECD Space Forum (link to OECD Partnership page), includes the value of the space sector itself, comprising of space upstream and downstream companies, as well as the value of impacts that space activities have on the economy and society (link to the Impacts page).

To illustrate this sometimes-complex distinction:

- The value of the space sector is generated by economic entities that develop and sell space products and services (e.g., satellites, rockets, receivers of satellite signal, satellite communications).

- The impacts of the space sector lie in the value from the use of those space products and services (e.g. a smartphone app such as Google Maps or Uber that uses receivers of satellite navigation signal to function or a maritime company that uses a satellite communication service to offer 24-hour helplines to ensure crew’s safety).

This article focusses on the space sector’s economic value. To learn more about the impacts of space activities on the economy and society, please refer to the Impacts page (link to the Impacts page).

Often compared to the defence sector, the space sector is a highly strategic industry that is primarily supported by government budgets. Nearly 100 countries have sent a satellite in orbit since 1957. In several OECD countries (Belgium, France, Space, United Kingdom), the space sector is listed as a critical infrastructure, together with transport, energy, food supply or ICT (OECD, The Space Economy in Figures, 2023).

The work of the Space Economy team at ESA is to provide its Member States with a comprehensive overview of the space sector, highlighting key trends and figures at both the global and European levels. Annually, the team selects and carefully reviews a set of key figures to describe the status and main trends driving the global and European space industries’ evolution. In particular, the ESA Space Economy team continuously assesses existing data sources, notably by:

- Ensuring an in-depth understanding of the methodology used by the data producing entities;

- Identifying any changes of scope or approach to dissociate statistical growth from actual organic growth;

- Avoiding misleading comparisons across different datasets;

- Conducting sanity checks with additional sources to validate orders of magnitude.

A number of key indicators are commonly used to monitor the space sector globally and the competitiveness of the European space industry specifically. They include:

Space activity in terms of:

o   the number of launches (every time a rocket is launched);

o   the number of satellites launched (the spacecraft launched into orbit by the rocket);

o   the mass launched (of all the spacecraft onboard the rocket).

Government space budgets (the investment made by public institutions for the development of space activities, for both civil and defence purposes);

- Private investment in space (the funds raised by space companies through acquisition, debt financing, private equity, public offering, and Venture Capital);

- Space industry’s revenues in the upstream and downstream segments; and

- The space sector’s workforce.

The only fully publicly available data is related to the number of launches, number of satellites launched, and the mass launched (available in sources such as Gunter's Space Page; or the UCS Satellite Database).

The other indicators, which are estimated in value, have significant limitations as data is not publicly available, and figures are therefore largely estimated. In addition, the sources generally differ in terms of scope, and definitions, leading to several methodological issues to consistently compare the different indicators.

Selected sources include for example:

The OECD publishes figures on government space budgets in OECD countries (see article about latest available data). ASD-Eurospace, the non-profit trade association of the European Space Industry publishes figures on European public investment in space (see article about latest available data). Other sources exist but need to be purchased, such as the Novaspace report on Government Space Programs.

Data on the private investment deals related to the space sector is available through various sources (Crunchbase, PitchBook, Dealroom). The European Space Policy Institute (ESPI) publishes since 2014 an annual report on the funds raised by European space start-ups (see article about latest available data).

Data on upstream revenues, that are generated by companies primarily involved in the manufacturing and launch of spacecraft, has been published, for Europe, for more than 25 years by ASD-Eurospace (see article about latest available data). The report also provides data on employment in the European space upstream industry. At global level, the sources have to be purchased. Contrary to the Eurospace data on the European upstream segment, that is based on actual final sales of companies, the reports at global level are usually based on estimated price per kilo. For example, for government orders of satellites for defence purposes, the revenues generated by the industry developing the satellites are estimated based on the mass of the satellites, their performance, expected lifetime, and a number of additional parameters. These models are typically called parametric models.

Data on downstream revenues, that are generated by companies primarily involved in the selling of space data and development of space value-added services, generally have to be purchased as well. EUSPA (the European Union Agency for the Space Programme) publishes a well-known market report on the estimated revenues, global and European, from downstream satellite navigation, and Earth Observation (see article about latest available data). Data on revenues from downstream satellite communications can be available from public financial reporting of main satellite operators (such as SES or Eutelsat).

To know more about the work of ESA Space Economy team on space sector’s economic value, please do not hesitate to contact us!

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