Insights

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

17/06/2022

Raymond Garrand

Alan Smart

As you look to the night sky there are around 3,400 active satellites in orbit, 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 global positioning, weather, maritime surveillance, communication and defence.

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.

It is the most important announcement regarding the Australian space industry since the establishment of the Australian Space Agency (ASA) in Adelaide in 2018. And 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.

Building Australia’s sovereign space capability, however, will be a long process as Australia is starting from a long way behind compared to other OECD countries, ranking 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 be important to clearly define sovereignty. Sovereignty does not mean total self-reliance. It will be important for Australia to build on it’s strengths and determine the areas where sovereignty in space is critical from an economic or security point of view and to build a sustainable, competitive and resilient space sector?

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.

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

As the COVID-19 pandemic and conflict in Ukraine have demonstrated, having the option for reliable and secure access to space-sourced information is critical in meeting Australia’s civil and defence needs in a world faced with increasingly rapid geopolitical changes. Self-reliance is becoming increasingly important to this end.

Australia has the technology, skills and industry capability to be among world leaders in many areas of the space sector. It will be important to further build sovereign space capability in areas that play to our competitive strengths while also addressing our civil and defence strategic interests and reduce sovereign risks in critical areas.

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 source 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 or 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 Defence Primes are able to 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.

The Australian and State and Territory Governments and Defence have provided in excess of $3 billion in funding by way of small industry grants to help build the capability of these smaller companies.

While these grants provide valuable “seed funding” for small to medium-sized companies, it is ultimately by securing medium to longer-term contracts that start-up companies and SMEs are able to 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.

Technology and innovation


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 2012-162 and ranking 8th amongst G20 countries for its share of top ranked space academic publications by citation.3

The CSIRO has already outlined a clear roadmap for unlocking future growth opportunities in space and areas where Australian science and research can make a significant contribution.4 Defence likewise is looking to develop leap-ahead space capabilities for Defence through their Star Shot program. 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 2018-19.5

Investment and economic growth


To build sovereign capability will require substantial investments 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 Strategy.6 The ASA has a target to triple the space sectors contribution to GDP 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. 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 developing the 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 across almost all space sector skill sets with around 25 per cent of the skill sets having critical current or future skill shortages.7 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.

Defence


The space domain will be increasingly critical for Defence and this has been recognised through the creation of a Defence Space Command and building sovereign space capabilities through major investments in programs such as JP9102 to develop the next generation SATCOM systems for defence.

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.

Developing Australia’s space industry sector has important implications for our future in terms of defence and civil applications of space systems and services. It is important both in terms of ensuring secure access to space-based services for defence and civil needs and for developing the Australian space industry sector with implications for our modern manufacturing capability.

The need for sovereign space capability in the defence can no longer be viewed in isolation of the developing sovereign space capability in the civil area.

Developing sovereign capabilities in both areas, with greater coordination between defence and civil, will need to be a be key consideration for the overarching Space Strategy Update being developed by the ASA.


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

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

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