News broke last month that the European Space Agency (ESA) had engaged SpaceX to launch four of Europe’s Galileo satellites into orbit in 2024. The decision to turn to Elon Musk’s US-based company comes in the wake of delays to Europe’s own Ariane 6 rockets, which mean the continent is without its own means to deliver large payloads into space.
Though it’s only designed to bridge the gap in our current capabilities, it’s a disappointing development for Europe’s spacetech community. But one that, unfortunately, many of us saw coming.
Why Europe is falling behind in space
Europe is currently lagging behind the rest of the world when it comes to spacetech, and the agreement with SpaceX is emblematic of a frustrating situation that’s hampering opportunities to advance its capabilities.
So why has Europe had to turn to a US-based company? After all, there is no shortage of demand, and it’s not like the region is short on the kind of top level engineering talent that’s needed to develop its own rockets.
One of the main problems is that there’s simply a lack of competition to fuel the development of new capabilities. I’d also argue that governments aren’t helping the situation.
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Compared to the US and China, European space tech companies face a huge funding gap. In the US, funding largely comes from NASA and the Department of Defence who invested more than $62 billion in 2022.
It’s a similar story in China, where government support totalled $12 billion. Compare that with ESA, which has an annual budget of just 7.5 billion euros, and it’s easy to see why the region is lagging behind.
How did we get here?
It’s clear that dependency on foreign imports and companies like SpaceX will, in the long run, leave Europe’s sovereignty vulnerable. So, why have we fallen so far behind?
In part, ESA suffers from regulations on “geographic return.” This means that when a country funds ESA, an equivalent amount of money must be reinvested into its own domestic industry.
“Geographic return” was originally introduced to encourage investment and share the load (and returns) across big and small nations. In recent years, however, it has come under increased scrutiny for hampering the European space sector’s ability to be competitive, because in short, innovation and competition aren’t evenly spread. Finance should go to the best products, the best ideas and the most scalable commercial innovations, regardless of geography.
Earlier this year, ESA’s Director General Josef Aschbacher wrote that the region should move towards a “fair contribution principle,” which means adjusting the contribution of each European member state according to the outcome of the industrial competitions and the actual share gained by its industry in these competitions.
While it’s undoubtedly a step in the right direction, I would say this does not go far enough. Scrapping “geographic return” entirely would be the kind of game changer that Europe needs to keep pace with the global space tech race.
The power of partnership
Another reason Europe is falling behind its global counterparts is the absence of public-private partnerships, which would support growth in the continent’s space sector.
Take the US for example, where NASA’s Commercial Orbital Transportation Services (COTS) programme backed SpaceX’s development of Falcon 9, the first (and cheapest) partially-reusable rocket. The success of Falcon 9 set the stage for an atmosphere of enduring public-private partnerships, which foster competitiveness in the US today.
NASA’s administrator Bill Nelson has also stated that he backs fixed-price contracts with companies working on space exploration. Fixed-price contracts assume companies building technical systems absorb any unanticipated expenses, not NASA. This makes the market more competitive for growth-stage companies selling low-cost services to the agency.
Here in Europe however, we simply don’t have the same atmosphere of public-private partnerships. That’s in part because we don’t have a joint defence initiative. We also don’t have an Elon Musk or a Jeff Bezos who are willing to invest billions. According to NASA’s own independently verified numbers, SpaceX’s development costs of both the Falcon 1 and Falcon 9 rockets were approximately $390 million in total.
Unlike the US, there’s also no single European country big enough to go it alone. This is where collaboration between public-private partnerships and like-minded companies could make all the difference. After all, it’s a process we’ve seen flourish with pan-European success stories like Airbus and defence systems specialist MBDA.
Europe needs to ignite its space tech landscape
Spacetech has the potential to advance innovation across every aspect of our lives. Europe is full of companies that are developing technologies that won’t just advance our extra-terrestrial ambitions, but improve lives down here on terra firma too. However, they can only succeed if they have the support and backing they need to flourish.
If the current disparity continues, Europe runs the risk of becoming a mere spectator as space industries in countries like the USA and China surge ahead. Left unchecked, it’s a situation that won’t just hamper our ability to launch our own satellites into space, but potentially jeopardise our economy, our security, and even our defence capabilities.
And that’s a space race that we simply cannot afford to lose.
Jean-François Morizur is the founder and CEO of Cailabs and a Forbes 30 Under 30 honouree in Science & Healthcare. Prior to founding Cailabs in 2013, he was Senior Associate at Boston Consulting Group and is co-inventor of Cailabs’s groundbreaking Multi-Plane Light Conversion technology.
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