Building a Sovereign Space Capability: does it matter and is it worth it?

As you look to the night sky there are around 3,400 active satellites in orbit, yet only four of these are Australian satellites. Australia relies on partnership agreements with the United States, Japan, Europe, and others for almost all our spatial needs for earth observation, global positioning, weather, maritime surveillance, communication, and defence.

The global space sector is growing rapidly and is worth US$350 billion today and is projected to grow to over US$1.1 trillion by 2040. The Australian space industry is likewise growing rapidly with industry value expected to grow at an annualised rate of 8.6 per cent compared to an expected growth in Australian GDP over the same period of 2.7 per cent.

The recent announcement by the Australian Government to invest $1.16 billion through the Australian Space Agency to develop and operate four new Earth observation satellites represents a significant paradigm shift.

What are the risks and benefits of expanding Australia’s space capability?

Building Australia’s sovereign space capability will be a lengthy process, with Australia starting from a long way behind compared to other OECD countries. We ranked 18th out of the G20 countries in 2020 in terms of investment in the space sector as a percentage of GDP, with Mexico the only G20 country with a lower level of investment ¹.

As Australia continues to invest in sovereign space capability, it will also be important to clearly define sovereignty, as sovereignty does not mean total self-reliance. It will be important for Australia to build on its strengths and determine the areas where sovereignty in space is critical. It’s crucial from an economic or security point of view that we are equipped to build a sustainable, competitive, and resilient space sector.

The rapid emergence of Australian space activities raises issues that we haven’t had to address before. With an increasing number of satellites in orbit there is a growing need to track them. Even a small fragment of paint from a satellite could cause damage to a space station or other satellite. This is a growing area of concern and Australian companies are already engaged in developing technologies for space situation awareness. Protecting the integrity of our own satellites will become a priority in future years.

These issues are not insurmountable and in fact the risks are far outweighed by the benefits. The returns from developing our sovereign space capability are likely to be significant and far reaching and will flow through to many areas of the economy.

There are huge opportunities that come with the growth and development of the space industry in Australia. Not only for the fully realised creation of a new industry, but also the creation of highly specialised jobs for the next generation of Australians.

How do we measure success?

Some of the areas and metrics by which a Sovereign Space Capability Plan should be assessed and measured should include:

Greater self-reliance in areas that matter - recent events in Australia, whether it be droughts, flooding, or bushfires, highlight the importance of timely Earth observation data and monitoring to meet Australia’s unique needs. While much of this can be sourced from existing satellites - as the ASA has highlighted - there are specific needs, such as radiometry monitoring for water, or fuel load management in forests, that other nations cannot deliver. The boundary between defence and civil use of space assets can be a grey area. A coordinated approach with greater sovereign capability for critical space services and technologies for both defence and civil applications is becoming increasingly important.

Start-ups and industry capability - there are around 490 companies in the Australian space sector with many of these small to medium-sized enterprises (SMEs). While many larger companies, such as the Defence Primes, can position themselves for the larger defence-related contracts, this is not the case for many start-ups or SMEs that are not currently embedded in national or global supply chains. It is ultimately by securing medium to longer-term contracts that start-up companies and SMEs can make the long-term investments required to build greater capability and secure the finance for growth. The support provided and growth and sustainability of start-ups and SMEs in the space sector through procurement activities should be a key consideration of the investment in sovereign space capability.

Research and development - Australia is already a leader in space related research and development with Australian space science research contributing 6.8 per cent of global publications between 2012-16 ²and ranking 8th amongst G20 countries for its share of top ranked space academic publications by citation³. The CSIRO has outlined a clear roadmap for unlocking future growth opportunities in space and areas where Australian science and research can make a significant contribution⁴. Defence likewise is looking to develop leap-ahead space capabilities through their strategic STaR Shot program⁵ . Clearly defining the gaps and the contribution of Australian science and research to an overarching civil and defence Sovereign Capability Plan will be an important next step.

Jobs - one of the benefits of investing in sovereign capability is the creation of local high-value jobs in Australia. The Australian Civil Space Strategy has the key objective to create an additional 20,000 jobs by 2030 and the ASA is already well on track to reaching this target with 11,560 direct jobs created as at 2018-19⁶.

Investment and economic growth - to build sovereign capability will require substantial investment by both local companies and international partners. The investment pipeline for the Australian civil space sector is estimated to be over $2 billion which is already double the $1 billion by 2025 target set in the Space Strategy⁷. The ASA has a target to triple the space sector to over $12 billion a year and it will be important for public investments in sovereign capability to make a significant contribution to these targets.

International partnerships and exports - space is an area requiring international collaboration and the ASA provides a focus for collaboration between other space agencies and other governments. The development of a sovereign space capability will be important in further strengthening the opportunities for international collaboration including through NASA’s Moon to Mars initiative which Australia is party to ⁸. A key focus should be on helping to support those companies that are internationally competitive and able to enter global supply chains and export.

Skills - underpinning the growth of the space industry in Australia will be the development of skills across the full supply chain. A recent skills gap analysis undertaken by the SmartSat CRC found that in the civil space sector there were skill shortages ⁹across almost all space sector skill sets with around 25 per cent of the skill sets having critical current or future skill shortages. Investment in sovereign space capability will both require skills and provide the career pathways and opportunities that will help inspire future generations to pursue a STEM pathway and career in the space sector. The Andy Thomas Space Foundation launched its Space Education Fund in 2022 with an expanded set of scholarships and programs to help create high quality space education opportunities for students and researchers across Australia.

Defence - the space domain will increasingly be critical for Defence and this has been recognised through the creation of a Defence Space Command ¹⁰, along with building sovereign space capabilities through major investments in programs such as JP9102 to develop the next generation SATCOM systems for defence. This program will see the delivery of infrastructure that is critical to Australia’s security. Under JP9102, the Australian Department of Defence is looking to increase the resilience, agility, and flexibility of defence’s military Satellite Communications (SATCOM) capability.

Increasingly there is a strong interface by companies operating in both the defence and civil domains. While Defence has developed a Sovereign Industry Capability Priority Plan based on areas that are considered operationally critical to defence, no such plan currently exists for the civil space sector. This will be an important task for the ASA as it develops the Space Strategy Update, an overarching Australian space strategy which for the first time covers both defence and civil space activities and will provide greater coordination and certainty regarding future sovereign space capability needs.

What happens if we don’t enhance our space capability? 

The momentum in developing Australia’s space capability has gathered pace since the Australian Space Agency was established in 2018. It has important implications for our future in terms of defence and civil space applications, systems, and services. Space services are becoming increasingly important for defence as well as civil applications, such as in managing and mitigating the impacts of fires and floods. It is also becoming an enabling service for agriculture, mining, construction, surveying and mapping, intelligent transport systems, environmental monitoring, weather forecasting, and navigation services.

The investment in building sovereign satellites will underpin the growth in these capabilities and will be the largest single investment ever in the development of Australia’s civil sovereign space capability.

This investment marks a significant policy shift and change in the role of the ASA. It is a recognition that for Australia to develop a sovereign space capability, government investment in projects and missions and procurement from Australian companies will be important.

ACIL Allen has been providing economic and policy advice to both industry and government on the Australian space industry and related activities in the geospatial industry sector for over 20 years. From our experience this investment is critically important for Australian industry, science, and skills formation. It will raise new challenges in commercialising innovation and translating the skills and capabilities developed in the space sector more broadly to the benefit of all Australian industry and society.

References

^[1]OECD, 7 October 2020, Measuring the economic impact of the space sector: Key Indicators and options to improve data. prepared for October 2020 G20 Space Leaders Meeting

^[2]Finch A. and Wells X. E. (2017). CSIRO Science Health and Excellence Report 2016-17. CSIRO, Australia.

^[3]OECD, 7 October 2020, Measuring the economic impact of the space sector: Key Indicators and options to improve data. prepared for October 2020 G20 Space Leaders Meeting.

^[4] CSIRO (2018).

^[5] https://www.dst.defence.gov.au/strategy/star-shots

^[6]Australian Space Agency Data, Australian Space Agency (2021). Economic snapshot of the Australian space sector: 2016-17-2018-19.

^[8] Ibid.

^[8]https://www.nasa.gov/topics/moon-to-mars

^[9]SmartSat 2021, Space Industry Skills Gap Analysis, SmartSat Technical Report no 5, SmartSat, Adelaide, Australia.

^[10]ADF Establishes new defence space command branch.