Assessing the Status of the European Space Industry – A Recap

Author: Nicole Heins, Senior Conference Producer at Space Tech Expo Europe

The European space industry is resilient but in need of key next steps to keep up with global developments, according to key figures in the European Space industry. They gathered to assess the status of the sector in November 2020, while providing an outlook on where the market will move to next. Led by Peter de Selding, Chief Editor of Space Intel Report, the discussion welcomed representatives from the European Space Agency (ESA), European Commission, Seraphim Capital and SME4Space who shared their vision with the Space Tech Expo Europe audience.

As many countries in Europe are going through the second lockdown of 2020, Andrea Vena, Head of the Corporate Development Office at ESA, said he has seen great resilience in the industry: “We have had business continuity in almost all areas, even though Europe has been locked down for a couple of months quite rigidly. Therefore, I think that we can look at the future very positively.”

This positivity is shared by Hans Bracquené, Chairman of SME4Space, an industry association supporting around 800 small and medium-sized enterprises (SMEs). He was optimistic regarding the measures ESA and the European Commission took during the first part of 2020 to help support businesses: “We did two surveys as SME4Space with the SMEs. In the second one, which was in May, [it was] clear that the measures were known and were implemented and used by the agencies.” Bracquené also highlighted a major concern for the foreseeable future: “Unfortunately, I have to speak in the past tense because the money was spent so quickly that the agency [ESA] was running out of money and they had to stop it on the first of October. The higher amounts that were paid, that specific decision had to be rolled back. We were told they need a new council decision which is the most important organ of the space agency to be able to restart it. So, we hope that it will soon be restarted because the problems are still there.”

Vena acknowledged this and said he has seen a lot of support from ESA’s member states to keep the industry alive. Vena also reflected on ESA’s Ministerial meeting in Seville in November 2019 and indicated that at this stage, none of the programmes agreed during Space19+ will be dropped. He did highlight, however, that there may be consequences of the pandemic that need to be considered in future decision-making. Key next steps for the agency include future decisions on unity of action among the European Union and ESA, securing international collaboration following the inauguration of the new US administration, the continuous promotion of the commercial dimension of space, and the enforcement of space as a ‘cross-cutting’ sector.

The European Commission is preparing the European Union’s next Multiannual Financial Framework for 2021-2027. Aside from its flagship programmes such as the Ariane vehicle, Galileo and Copernicus programmes, the forthcoming financial perspective is set to include new areas within the Commission’s focus for research and innovation including space situational awareness and GOVSATCOM. “There are also other new research priorities which are coming up simply because the technologies are developing so fast – one fascinating part is quantum technology and how you can use it in space”, said Christoph Kautz, the European Commission’s Acting Head of Unit for Space Research, Innovation and Start-ups for the Directorate General Defence Industry and Space.

Kautz also mentioned the prioritisation of better interlinkage with financial instruments as a focus area. “We will have a programme called InvestEU which essentially is a financial instrument to provide guarantees to banks and venture capitalists who want to invest in new areas and new technologies. There will also be opportunity for the space sector.”

Mark Boggett, CEO of Seraphim Capital painted an optimistic picture on investment in the space industry and how it has performed over the last year, despite the pandemic. “If you compare the period Q2 and Q3 of 2019, against the period of Q2 and Q3 2020, what we can draw from that is the impact of COVID. First of all, the overall global impact of COVID is that the 2020 period is up 65% on the 2019 period. From my perspective, that completely blows away any suspect that hype was what was driving the investment in the space tech sector for the last few years. This is not hype, this is investors making a conscious decision to make a long-term investment in a growth sector, which is great news.”

However, Boggett drew a more concerning conclusion for the European space industry. Looking at the six-month quarter results “the US is up by 59%, Asia up by 260% while Europe is down 19%. The United Kingdom is up 10%. So, Europe is the only main economy that is actually down, comparing those six-month quarters. If you look at it by the number of deals, overall, the total number of deals is down by 9%. That means two things: there is a flight to quality, better quality companies are being funded.” The second thing Boggett highlight was “that investors who are funding companies are potentially overfunding companies because of the uncertainty of the period ahead. Rather than providing 12 months of funded runway, they are providing 18 months or even two years to make sure these businesses got the appropriate runway to get them out of this crisis.”

All in all, the speakers on Space Tech Expo Europe’s webinar shared a positive vision for the future of the European space industry but highlighted some key areas where action will be required to be taken.

You can watch this webinar on-demand to hear more of the insights and knowledge shared by our industry experts. Space Tech Expo Europe organises two more webinars in its Winter Series. Head over to our webinar page to reserve your virtual seat.

Our next webinar, on space traffic management and debris mitigation, will take place on Thursday December 3 at 16:00 Central European Time.