iv. Specialize in niche technology areas

Specialize in niche technology areas

Key recommendations

➢ Implement policies that attract international space business. ➢ Take into consideration existing national capabilities, industry, and gaps. ➢ Consider software development opportunities, or innovative downstream uses of space-based data collection. ➢ Weigh the opportunities and challenges of import substitution in the space sector. ➢ Solve local problems by developing niches in crosscutting technologies (e.g., additive manufacturing or mineral processing) with strong applicability to space.

Emerging players may specialize in niche areas in space to increase their impact in the international space market. Beyond the traditional space applications for communication, Earth observation, and navigation, there are many emerging markets for new actors to focus on, from asteroid mining to space tourism, and robotic satellite servicing.338

Generally, the economic potential of a country in space is less constrained by factors such as size and geography than on Earth. For example, the space roles and ambitions of geographically smaller global players, such as Luxembourg and the UAE

338 Kommel et al. (2020). 339 International Space University (2017). 340 Kommel et al. (2020). are outsized, particularly in their specialized areas. SES, one of the largest satellite communication companies is partly based in Luxembourg, a country with a population of less than a million. National support for innovative private companies and start-ups significantly contributes to the country’s status as a global space hub.

Beyond space funding, policymaking has been instrumental in carving out a space niche for Luxembourg. Luxembourg became the second country in the world to legislate on space mining, encouraging this emerging area of the space sector.339 Countries may seek to implement policies and regulatory frameworks that attract international space business, though it is important that there is not a “race to the bottom” in terms of deregulation.

In the pursuit of specialization, it is important to consider the country’s existing capabilities, while identifying gaps in the global space industry waiting to be filled. It is also essential to ensure that government space activities do not compete directly with existing commercial activities in the country.340

In addition to hardware, countries may pursue software development opportunities, or provide innovative services in the downstream use of space-based data collection. Existing remote sensing systems gather an array of data that could be used for new applications to solve a range of problems, from agriculture to tracking the poaching of wildlife. Countries may find new ways to utilize existing technology, as a

service that can be exported to other nations.

As an alternative to specializing in niches, governments may consider import substitution – restricting the import of space goods and services – to boost their emerging space economies. As countries establish their space sectors, they may seek to replace television and cellular providers from abroad with their own services. As well as boosting national capabilities and expertise, such initiatives could help achieve economic diversification, generating economic growth.341 Additionally, national security could benefit from sovereign space capabilities in certain areas, such as Intelligence, Surveillance and Reconnaissance (ISR) or critical national infrastructure.

Import substitution presents potential tradeoffs regarding costs and service quality. Moreover, import substitution may not produce exportable goods or services, as rather than developing niche systems, the effort goes into recreating an existing product that is already being exported by another provider. Rather than reproducing an existing capability, the money could be invested into a new system that provides additional services. There is therefore a need to carefully assess the opportunities and challenges presented by import substitution the space sector. Countries can also prioritize solving local problems by developing niches in crosscutting technologies such as additive manufacturing. In regions where there is little access to water, dry additive manufacturing and construction could greatly benefit infrastructure and development. This is also an area with strong applicability to space. Other niches may include vertical farming, or mineral processing, which may become increasingly important in future uses of space.

341 Adewale, Aregbeshola R. (2017) Import substitution industrialisation and economic growth – Evidence from the group of BRICS countries. Future Business Journal 3(2) December 2017, 138-158. https://www.sciencedirect.com/science/article/pii/S2314721017300713