Australia’s Space: History as a Guide to the Future?

By Daniel Hunter and Bec Shrimpton, AUSTRADE

Australia finds itself at a juncture in its history as a space nation. Our nascent space sector has grown rapidly in the past five years, although we still have a long way to go to establish a resilient and robust industry. In the mid 20th century Australia was a critical space partner to the UK and US: the Southern anchor in a multi-pronged ‘moonshot’. To rediscover our space heritage and take our place in the new space economy, Australia requires a cohesive and deliberate national policy approach that sets clear goals and unifies national effort. On 3 March, the government announced just that: the Australian Space Agency will lead a unified civil, commercial and military strategy for Australian space, setting the vision for decades into the future, with the ability to shape and develop a strong industrial base. New capability and innovation can be unlocked through collaborative partnerships domestically and internationally. The announcement signals the strategic importance of space and the Australian Government’s commitment to the sector.

The global space economy was valued at US$447 billion in 2020 and is now projected to exceed US$1.4 trillion by 2030. This astronomical growth is spurred by key drivers such as the miniaturisation of space technologies; rapidly falling launch costs; an increasingly data dependent global economy; rising private sector investment and competition in space, and significant growth in defence space investment by major governments.

Since 2017 Australian space start-ups and SMEs have attracted more than $270 million in venture capital and angel funding, a tremendous achievement. This investment and planning provides Australian companies with the support to maintain and upgrade existing capabilities, as well as develop new capabilities to solve problems domestically and service global partners. 2019 government estimates show sector revenue had grown to $4.6 billion and the total number of direct space jobs rising to 11,500. Furthermore, a growing investment pipeline into the Australian civil space sector has been identified, valued at a total of at least AUD$2.02 billion. This includes AUD$774.6 million inbound investment from private industry and international space agencies.

In addition to the space related projects such as JP9102, DEF799 and JP9360 Australia’s Department of Defence recently identified space as a Sovereign Industrial Capability Priority (SIC-P) and created a Space Command within the Royal Australian Air Force (RAAF). Space Command will be allocated more than $7 billion by the Federal Government to lead and manage Australian space operations. Defence (and Government more broadly) recognise that a competitive commercial space industry is now an essential element to the defence industrial base.

The experience of other space-faring nations tells us that governments and defence departments play a key role in building and supporting national space industries, particularly in this nascent stage. There is a role for grants, but these need to be complemented by policy frameworks that accommodate responsible risk and provide certainty to smaller and medium sized enterprises. Governments do need to act as anchor customers, and indeed their needs from the commercial sector are only set to grow. However, government and defence cannot and should not be the sole customers. Large, lucrative government contracts are a significant win for the few companies that secure them. However, the availability of such contracts is sporadic at best, with cash flows hindered by the long lead times involved to navigate tender processes. To be successful and thrive, Australian space companies must regularly win and maintain commercial and international contracts.

Due to the size of our industry and economy, opportunities in Australia alone will not be sufficient. The character of the space industry itself is global, necessitating an outward looking approach that secures Australia’s place in the new space economy. Australian companies must look to exports, and to productive and trusted foreign investment to expand their commercial horizons. They must rise to the challenge of differentiating themselves from global competitors, and meet or exceed international standards.

One way to strengthen a company’s domestic and global standing is to collaborate with others, both domestically and internationally. It was encouraging to see the recent formation of the Australian Defence Industry Space Capability Alliance (ADISCA), also announced at the Australian Space Forum in March this year. Consortia of existing capabilities may be better prepared to respond to multi-faceted proposals from government and defence in coming years, especially given many Australian space companies currently possess niche rather than vertically integrated capabilities.

Space companies all over the world continue to show strong interest in Australia as a place to set up and expand operations. This introduces competition which – if strategically managed - is healthy and drives innovation. Whether these foreign companies operate in Australia or not, they are likely already competing for the same slice of global space opportunities. When targeted and undertaken as part of a deliberate strategy, foreign investment can catalyse and scale Australian space companies.

Global opportunities, Australia’s competitive advantage and priorities

Australia is well positioned to capitalise on the growing demand for space services and technologies. Our unique location makes us a prime location for launch, communications ground stations and space situational awareness capabilities.

Beyond our geography, we are witnessing the development of exciting new technologies that will help solve many challenges facing the planet and the space environment. Australian companies are highly capable in a variety of areas such as advanced communication, quantum technology, rocket propulsion, mission control, space medicine and astronomy; they are ready to take their place in the global space sector. In addition, Australia’s mature capabilities in robotics and automation and remote operations management (from our work in primary sectors such as mining) are highly transferrable to space.

Access to space is a vital component of the space economy. Estimates forecast 25,000 to 40,000 satellites will be launched into orbit by 2030. It is predicted that current global space port infrastructure and rocket availability is not sufficient to keep pace with increasing demand for mega constellations and for taking earth-bound industries into space. There is a growing focus for small launch companies to provide responsive maintenance and sustainment to mega constellations which do need heavy lifting to put significant numbers of satellites into orbit at once. Bottlenecks are anticipated at US space ports and existing trusted launch infrastructure outside of the US is limited. The US, UK, Korea, Japan, India and even Europe all have significant space aspirations with limited infrastructure and environmental constraints on their ability to launch at the necessarily growing cadence.

Geopolitics only adds to the pressure on launch options from new politically aligned and operationally relevant locations. Strong demand for alternative launch locations is clear.

Fittingly, Australia's geographical location allows launch to all orbits and inclinations from its territory(LEO, SSO, Polar, MEO, GEO, Equatorial), a key competitive advantage. Furthermore, Australia’s weather, low population density and uncongested air and maritime traffic present highly favourable conditions to accommodate launches at high rates.

The Federal Government recently committed $65m for Australia’s space sector, including $32.3m co-investment for the development of up to three new or existing space ports or launch sites across Australia. This provides not only an important injection of funds into a critical element of the space value chain, it does so at the right time.

In a move strongly welcomed by industry here and abroad, the Federal Government has decided to abolish the Commonwealth Cost Recovery Scheme for space launches and return (originally due to come into effect at the end of July 2022). This is a great step in ensuring Australia’s regulatory environment creates commercially competitive conditions for foreign and domestic launchers to utilise Australian space ports.

Australian space ports and gaining valuable space heritage

Gaining space heritage is often a difficult hurdle for space start-ups. Easier access for Australian companies to secure slots on rockets, especially on those taking off from our own shores, would be a huge boom for the industry. Manufacturing, maintenance, R&D, testing and accreditation capabilities - among other up and down stream activities- will all be encouraged to grow through the activity of the launch sector.

Advanced industrial benefits are not where it ends. There are tourism, education and adjacent technology businesses that spring up around space launch. The economic and strategic possibilities that could be realised from a stable, active launch industry in Australia are invaluable.

Two Australian space ports already well into their development are Equatorial Launch Australia in Arnhem Land, NT and Southern Launch at Whalers Way, South Australia. Each of these pioneering companies garner significant interest from the international space community. They have ensured an industry-led push into launch, alongside Gilmour Space (whose primary business is the development and manufacture of rockets and satellites) which plans to develop a space port at Abbot Point, QLD. Gilmour’s Eris rocket employs a proprietary hybrid rocket engine that uses both liquid and solid fuels for propulsion. The recent announcement of the South Australian Space Park (which included $20m in funding from the SA Government, and has since added a further $20m in federal funding under the Modern Manufacturing Initiative) is an exciting development in the growth of space manufacturing in Australia. A capable and busy launch industry will only further the need for manufacturing growth, creating highly skilled jobs and an asset for Australia’s economy. As regular launches from Australia begin, demand for space manufacturing capability will continue to increase as it progressively makes better economic sense for launchers and other space hardware firms to utilise local expertise and capability. Incubators and accelerators have sprung up in our Australian ecosystem, providing opportunities to connect Australia’s space talent and capabilities and help them achieve success at home and abroad.

Conclusion

Australia’s space industry, with increasing support from government, and our advantageous geographical location are complemented by a stable and secure business environment, trusted relationships with allied nations, strong technical knowledge, advanced manufacturing capabilities and a broad, highly skilled industrial base.

These aspects are and should continue to be celebrated widely. However, we cannot rest on our collective laurels. Australia (both government and industry) must continue to build on and accelerate the current growth and momentum if Australia is to become a true global player in space. All levers need to pull in the same direction with a well coordinated approach, which the national strategy should help bring to fruition.

Our outstanding industry growth, along with recent signals from government recognising the opportunities on offer, Australia will rise to the occasion and ensure that our future in space is a mighty bright one.

About the Authors

Daniel Hunter is Senior Adviser – Space & Defence in the Defence, Space and Infrastructure Centre of Excellence at Austrade.

Bec Shrimpton is Head of the Defence, Space and Infrastructure Centre of Excellence at Austrade and a former senior adviser in the Foreign Minister’s office. The views expressed in this article are the authors’ own and don’t necessarily reflect the views of their employers.