CONCLUSIONS AND RECOMMENDATIONS

5.1. Conclusions

As shown by the US and other examples, the space economy is source of considerable growth potential. In Europe, huge investments and effort were made over the last 10 years to build a common space infrastructure. A return on the investment for the EU space programmes is possible only if substantial socio-economic benefits are achieved through the development of businesses in the downstream sector. So far, the performance of the European space downstream sector has fallen short of expectations, as compared to other space-faring nations.

A series of reasons can be put forward to explain this situation. First, the European space policy started relatively late compared to its main competitors – the US in particular. For example, the Copernicus programme will be fully operational by 2020 and it is only then that the full benefits of it will be available and assessable.

Moreover, the European approach has long been biased towards an overly institutional perspective that prioritized the upstream sector (the deployment of satellites) to serve the interest of the scientific community or of big companies. There was definitely less concern for users downstream of the space value chain and investments for the distribution of data for non-scientific users were initially not envisaged with the same diligence as investments in infrastructure. Yet, rapid and reliable access to data for all categories of users is critical for the downstream market.

Finally, Europe has been slow to react to new business models based on the rapid and massive release of already processed space data to inexperienced users, which has been having disruptive effects on different segments of the downstream space sector. In this context, actors like national space agencies and other (mainly institutional) actors are being forced to reconsider their traditional approaches and activities, by for example finding niches markets or exploiting specific strength in terms of quality or customisation. Other context specific features of the EU market also contribute to explain the relative delay in developing downstream activities in the space sector. These include in particular the fragmentation of the European market, the persistence of a business environment that is generally not conducive to the development of start-ups (lower venture capital ready to be invested in risky projects) as compared to the US, and a far less widespread use of industry – science partnerships.

These features combined with a weak and fragmented demand from public and private users, explain why European companies in the downstream space market are generally small and domestically oriented. Differently, in the US, public-private collaboration between the government, that provided space imagery, and a number of IT giant companies, that made these data easily accessible to a large audience of potential users, triggered the development of the space imagery business. As a result, in the downstream sector, the US leadership rests on the effective management of large amount of data and information.

The European policy response to these different challenges has not been sufficient. Despite undeniable progress (e.g. the recent establishment of a unit within DG GROW to improve the EO data dissemination system), the EU still lacks an integrated and coherent space industrial policy addressing all industries along the space value chain. The data policy still suffers from shortcomings with issues related to intellectual property, privacy and security of data produced by national space agencies and contributing to the Copernicus programme. As for the distribution system, it does not yet provide a user friendly and equal access to space data made available through by Copernicus.

The public sector is the main customer of space data and satellite-based services. It will play a crucial role in spreading the use of satellite data in Europe, but it is not sufficient to drive a demand for commercial applications and services. Until citizens’ awareness about the potential use of space data remains low, demand for mass market applications remains limited.

5.2. Recommendations

Ensuring the market uptake of space data is today a political priority. This study is relevant and timely to inform forward looking policies that would maximise the benefits of the EU space flagship programmes for industry and citizens alike. Different lines of action are possible at different levels, from strategic approaches to initiatives geared towards addressing technical issues, dealing with both supply and demand conditions.

On the supply side, the priority is to make data easily accessible to users through a comprehensive and coherent data access policy and an efficient distribution system. Examples of possible measures are:

 reinforcing the existing IT platform that supports Sentinel data distribution through big data and cloud solutions;

 granting access to the full set of users, i.e. public institutions, scientists and researchers, commercial and private users;

 providing pre-processed products usable by a diversified spectrum of users, including those lacking strong technical skills to manage the raw EO data;

 improving and harmonizing access to national space data at European level and develop national data distribution points that would make access equal across Member States.

It is equally important to stimulate the supply of innovative applications addressed to a public as wide as possible. For this, the combined role of R&D and support to business development programmes (e.g. incubation measures, promotion of venture capital) are decisive. Establishing a connection between the wealth of research generated through Horizon 2020, and the companies that could use these researches to develop commercial products should be encouraged as much as possible. In this respect, an appropriate dissemination strategy for the space-related research outcomes of Horizon 2020 could be envisaged to reach out to the business community. In general, supporting closer collaboration between universities and private companies for developing applications and services is recommended.

On the demand side, it is necessary to stimulate or strengthen both the demand by public administrations, which currently dominate the market, and that of the private sector (B2B or B2C). Strong demand drivers for public services are expected to be the recent destabilization of the neighbouring Mediterranean area, and the increased occurrence of natural disasters due to climate change. In this respect, the use of satellite data and services should be encouraged within public administrations to ensure a more effective response to citizens’ security, safety and defence concerns.

Awareness raising activities need to be deployed effectively to tackle resistance to change the use of consolidated technologies. Targets are the public sector (at all level from local to national and European), the private sector and civil society. The role of the education system and universities in raising awareness and stimulating entrepreneurial interest in using space data should not be disregarded.

 increasing the harmonization of procurement rules to help enterprises (especially SMEs) have access to a larger European market of space data.

 carrying out a systematic review of the existing EU regulations in which the use of Copernicus data and of Galileo services could bring an added-value to identify needs and propose solutions; informing the EC services about the availability of possible suitable space data originating from EU programmes, and suggesting to use them could be useful.

In general, before proposing and introducing new instruments or additional regulatory requirements, it is recommended to examine first whether “soft” measures, which build on existing measures and arrangements, could achieve the desired goal anyway. At this stage, it would be advisable to recommend the use of space data as much as possible within the policy areas that fall within EU competence without making it mandatory. Similarly, Member States could encourage a larger use of satellite data and services within the different levels of their administrations. The market is indeed emerging, and it should be first made sure that capacities and awareness are consolidated before moving to more binding regulations, which could be difficult to implement for some Member States that lag behind in terms of infrastructure and capacities.

Overall, there is a need to scale up the strategic and political dimension of the challenge associated with the development of the downstream space market. A long term explicit and common EU space industrial policy for the development of the downstream market should be formulated, setting clear objectives and targets. In this regard, it is also important to make sure that the programmes’ services become available according to the time schedule planned and to avoid further delays as experienced by the Galileo programme. An enhanced coordinating role of the EU could better help reap the benefits of Member States and ESA systems that currently run separately or in parallel.

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