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Executive Summary: The Space Report
The Authoritative Guide to Global Space Activity

Space continues to capture the imagination, providing opportunities for learning, exploring, and dreaming about the future. At the same time, space systems are used for everyday purposes such as weather forecasts, driving directions, and international telephone calls.

SpaceRepFig1 There is an increasing awareness of the value of space as an economic market with bearing on many other economic sectors, as well as a critical enabler of national and social benefits.

Leaders in government and industry perceive that the business of space requires concerted policies, regulations, and investment structures that build on partnership, whether among governments or between industry and government. The rapid evolution of satellite navigation products and applications illustrates the tremendous and often unforeseen spinoffs from space investments.

In 2010, as the global economy recovered from a damaging recession, the space industry not only maintained its growth but even gathered momentum.

Despite reductions in spending by several major spacefaring nations, the commercial sector flourished, adding billions of dollars to the economy. The commercial sector has long been involved in national space programs, primarily as contractors. This role is expanding due to new government policies that encourage greater reliance on commercial providers, particularly in the United States. These policies provide opportunities that have generated significant interest among traditional aerospace companies, as well as newer space actors, as the commercial sector seeks resources to develop its technological capabilities.

Additionally, more countries are becoming involved in space or are revitalizing dormant space programs, with Australia, South Africa, and Iran as recent examples. In many cases, emerging space actors are incorporating a commercial element into their space programs that targets economic development and technology creation. These large shifts toward a greater commercial focus will occur over time, and not without disruptions or setbacks. As space business evolves, whether it is focused on commercial human spaceflight or the latest satellite navigation applications, it offers the potential for new investments, technology development, economic efficiencies, and an increase in the economic and social value of space to people around the world.

The role of civil society in space activity is also evolving. Space enthusiast communities are not mere observers, but are increasingly building their own in-space technologies through amateur or university satellite development programs. The emergence of smallsats and cubesats is lowering costs and barriers to entry, offering civil society actors new avenues to engage in space activity. When smallsats are networked, either in constellations or flying in formation, the opportunities for new science and commercial applications can grow exponentially. Commercial human spaceflight also opens an avenue for people to experience space on a personal level, and it furthers public interest in space activity even for those who do not leave the ground. The growing engagement of civil society in space pursuits not only stirs our imagination, but also brings us closer together—researchers, scientists, business professionals, and government officials—to explore the practically limitless opportunities that space promises.

SpaceRepFig2 Space Products + Services
Space products and services are an integral part of daily life, expanding each year into new areas of human activity. In one dramatic example, space technology and expertise helped to ensure the survival and rescue of a group of Chilean miners trapped underground. This experience was but a single instance of how the knowledge gained from human activity in the challenging environment of space can be applied to life on Earth. In more commonplace situations, new space applications are helping people communicate with each other and access entertainment as they travel by ground, sea, or air. Satellite-enabled internet connections are becoming commonplace as airlines outfit their fleets with the latest equipment. Navigation applications for cell phones can combine input from built-in cameras and GPS chips, enabling users to view directions as an overlay on an image of their surroundings. GPS tracking systems installed on race cars allow people playing computer games to participate in virtual competitions against professional drivers during real-world racing events. Whether during work or leisure hours, most people reap the benefits of space systems and technology on a regular basis.

The commercial sector continues to incorporate space technology both in its manufacturing processes and in its products. The glass manufacturing industry is incorporating techniques used in the analysis of data from the Hubble Space Telescope, and the semiconductor industry is creating more powerful microchips using technology developed for building ESA’s XMM-Newton X-ray observatory. Consumers can purchase clothing made from textiles originally developed for use by astronauts or have their hair styled with tools that smooth and soften hair using nanoceramic technology developed by NASA. Not only does space contribute to the wealth of products available to consumers, it also enables companies to estimate consumer activity by observing the ebb and flow of customer traffic in the parking lots of retailers such as Walmart by means of satellite imagery.

AVL_ad_SM0611.jpg On a more global scale, satellites offer a unique perspective that helps to explain the human relationship with the environment. From enabling forestry managers to track the spread of tree-destroying Rocky Mountain pine beetles to helping coordinate cleanup efforts after the Gulf of Mexico oil spill, satellite data is critical to managing natural resources and the response to manmade disasters. It is almost unthinkable now to consider the prospect of facing a natural disaster without the communications and imaging capabilities provided by space systems.

Individuals, companies, and nations continue to create new space-related products and services, capitalizing on the intellectual and financial investments made in space technology. Many governments have realized the benefits of using space technology as a tool for carrying out their responsibilities and as a means of generating economic growth. These governments play an important role in developing new space technology, with methods such as financing commercial companies, transferring government technology to the commercial sector, and creating a supportive regulatory regime. Regardless of the exact measures undertaken, it is clear that governments recognize the need for further growth of space capabilities.

The Space Economy
The space economy continued to grow for the fifth year in a row, seemingly unaffected by the economic turmoil that brought losses to many other industries during the height of the recession. The space economy increased by 7.7 percent in 2010, accelerating from annual growth rates of approximately 5 percent that were observed in 2008 and 2009. The space economy increased by nearly $20 billion during 2010, reaching an estimated total of $276.52 billion. Some of this growth came from increases in government spending, but the vast majority occurred in the commercial sector.

Revenue from commercial infrastructure and support industries increased by 13 percent in 2010, reaching a total of $87.39 billion. The majority of this growth came from ground stations and equipment, including personal navigation devices, which added nearly $11 billion in value, a 16 percent annual increase. The commercial space products and services market expanded by 9 percent, adding $8.55 billion in revenue for a total of $102 billion.

A large part of this increase is tied to direct-to-home (DTH) broadcasting, which grew by 10 percent, adding more than $7 billion. The commercial space transportation services sector declined by 88 percent in 2010, as there were no seats available for purchase by private individuals who wished to travel into orbit. However, companies working to provide suborbital travel options continued to collect deposits for flights expected to take place starting in the next several years.

SpaceRepFig3 Government space spending increased to $87.12 billion in 2010, a 1 percent increase from 2009. The U.S. space budget, which accounted for 74 percent of all worldwide governmental space spending, remained steady at $64.63 billion. Meanwhile, the budgets of other governments that were counted in both 2009 and 2010 increased by 0.3 percent. With the addition of eight national budgets counted for the first time this year, non-U.S. government expenditures reached $22.49 billion. Although government spending on space grew in aggregate terms, fiscal concerns meant that some major spacefaring nations decreased or made no change to their spending.

During 2010, major new space policies or planning documents were announced in numerous countries, including Canada, Germany, Israel, Japan, and the United States. As these policies cascade into budgets and program activities, they are likely to affect the amount of total governmental spending on space as well as the specific areas of programmatic activity.

The health of the space industry is reflected in the Space Foundation Indexes, which grew at rates of 10 percent to 43 percent during 2010. This upward trend continued the recovery that began in early 2009. The indexes track the performance of space infrastructure and services companies listed on U.S. stock exchanges. As the broader financial markets improved, the flow of capital into the space industry increased considerably. The aggregate value of mergers and acquisitions in 2010 was more than double that of 2009, even though the number of transactions remained steady. This was due to several high-value transactions in excess of $500 million, indicating investors are interested in taking large stakes in the space industry.

Space Infrastructure
The space industrial base emerged as an important topic during the year, with much of the discourse surrounding structural changes to the U.S. space program. There is growing interest in developing commercial crew vehicles, with several companies putting forward proposals to provide access to the International Space Station (ISS) and other planned space stations. Work has continued on both new and upgraded spaceports, including the completion of the runway at Spaceport America in New Mexico and the final stages of construction of the Soyuz launch complex in Kourou, French Guiana.

SpaceRepFig4 The global launch industry carried out 74 orbital launches in 2010, compared to 78 launches during 2009. This 5 percent decrease is due in part to the 2009 bankruptcy of commercial launch provider Sea Launch, although the company plans to resume operations in 2011. In spite of the lower launch rate in 2010, more payloads were launched than in 2009; 118 payloads were carried into space in 2010, up from 111 the year before. Russia remains the world launch leader, conducting 31 launches in 2010, followed by the United States and China, each with 15. Two new vehicles, the Minotaur IV and the Falcon 9, were launched for the first time in 2010. With its Dragon capsule, the Falcon 9 is intended to provide cargo transportation for the ISS.

As of the end of 2010, there were an estimated 957 active satellites in orbit around Earth. One of the recent growth areas is the field of satellite-based broadband internet connectivity. Commercial operators are seeking to provide broadband internet to consumers in underserved areas, sometimes with support from government programs. Meanwhile, mobile satellite service providers are pressing ahead with the deployment of next-generation satellite constellations to replace those reaching the end of their lives. The rapid expansion in the number of devices that use satellite-based positioning, navigation, and timing services has provided additional impetus for countries to field their own satellite navigation systems or augmentation services. The coordination of these systems, as well as infrastructure to enhance the accuracy of navigation systems used by the aviation and transportation industries, has emerged as an important area for international cooperation.

SpaceRepFig5 Workforce + Education
Despite the recession, U.S. core space employment remained relatively stable at about 260,000 workers in 2009, the latest year for which data was available. Average U.S. space industry wages continue to be more than double the average U.S. private sector wage, suggesting that the demand for skilled employees remains high. It remains to be seen how these figures will be affected by the end of the Space Shuttle Program and the termination of the Constellation Program, which have resulted in the loss of more than 2,700 space jobs between October 2008 and March 2010. Further cutbacks are expected, such as the reduction of the Kennedy Space Center contractor workforce from 15,000 employees in 2009 to approximately 7,000 by the time the shuttle ceases operations. Various retraining programs have been set up to ease the transition of these workers into other jobs, and it is also hoped that commercial operators will create jobs as they seek to provide NASA with crew and cargo services. In the U.S. military space workforce, the number of space professionals declined by 6 percent, from 16,830 in 2008 to 15,791 in 2009.

SpaceRepFig6 The U.S. space industry is also facing demographic challenges as significant numbers of employees approach retirement. A plurality of the civil servant workforce at NASA is between 45 and 54 years of age, and the broader space workforce peaks at 50 to 59 years of age. To ensure that critical knowledge is handed on to the next generation, NASA is emphasizing the hiring of new science and engineering (S&E) employees “fresh out” of university programs, but there are questions about whether the supply of graduates is sufficient for a growing industry.

The European space industry continued to add jobs in 2009, increasing by 3 percent to reach a total of more than 31,000. In Japan, the space workforce grew by 22 percent in 2009, reaching a total of about 6,300 workers as it recovered from a sharp decline in 2008. Around the world, other regions continue to emerge as new centers of space-skilled workers. Nearly 1.7 million students receive their first degrees (equivalent to a bachelor’s degree) in space-relevant S&E fields worldwide per year, with considerable parity among the Americas, Asia, and Europe. China showed the most rapid growth between 2002 and 2006, more than doubling its number of first-degree S&E graduates from about 325,000 to 770,000. Emerging regions showed the highest ratios of gender equity in S&E first-degree graduation rates: 40 percent of Middle Eastern S&E first-degree earners were female, followed by 39 percent of African and South American S&E first-degree earners. Worldwide, one-third of bachelor’s-equivalent S&E degree earners are women.

Although the space industry faces challenges due to programmatic changes and demographic factors, the ingredients exist for future successes. New commercial ventures and national space programs have the potential to generate interest that will draw talented individuals into the space workforce. The nature of this workforce may well be more diverse than it has been in the past, requiring new management approaches to ensure that innovation continues to grow and flourish.

SpaceFound_ad_SM0611 Outlook
As the space sector matures, alternative business models are increasingly used to gain better access to known markets and to enable unconventional new markets. This evolution includes government policies that promote new ways for the public sector to engage with private actors, as well as the increasing use of financial tools to encourage commercial development of key capabilities. Successful examples include prize models, from the X PRIZE to the annual European Satellite Navigation Competition, as well as increased use of export credit agencies to support space projects. They also include innovative technical approaches, such as hosting government payloads aboard commercial satellites. Government-assisted programs to develop cubesats and micro-launchers could also alter the way space is utilized by reducing barriers to participation in space activity.

The number of countries participating in space activities continues to expand. By the end of 2010, more than 50 countries were operating a national satellite or planning to launch one by 2012. The broadening of the space community has been reflected in policy and programmatic reorganizations that focus on defining the future direction of international cooperation in space exploration, ISS utilization, and space applications. Many nations beginning to participate in space activity seek partnerships with more established nations or companies, particularly in immediately beneficial areas.

Earth observation remains a priority for government commitment, and it continues to develop as a key area for international cooperation and commercial sales. Space imagery and content are accessible by a broad base of civil and public sector users, allowing increased citizen participation in space exploration and science. With more than 1,000 Earth science instruments in orbit, a constant stream of information about the planet is now available. National and international organizations seek to ensure that these capabilities do not degrade over time as satellites are retired, and in some cases commercial companies are stepping in to provide new methods of gathering data for purposes such as weather forecasting.

Interest in space is a common feature of the human experience, from the early societies that named stars and constellations to the astronauts who walked on the Moon. As technology improves, access to space is available to an ever-widening group of people. University programs enable students to build small, very capable satellites that are then launched as secondary payloads when larger satellites go into space. Five such cubesats were launched in 2010, and at least seven more are scheduled for 2011. For those who prefer looking at the night sky, there are online participatory programs that invite space enthusiasts to sort and categorize the vast quantities of astronomical data produced by observatories.

Such efforts have produced results that go beyond the limitations of the small community of professional astronomers.

SpaceRepFig7 In the near future, a series of new spacecraft focused on planetary and cosmic exploration will study a number of interesting topics, such as searching for signs of life on Mars. New missions are planned to monitor the Sun’s behavior and even to probe its atmosphere, with a view to better understanding life on Earth as influenced by solar activity and its impact on weather. Looking further afield, the search for Earth-like planets orbiting other stars has already yielded several possible candidates and it is likely that even more will be found during the next several years. Each new discovery adds to our understanding of the universe and the planet on which we live.

The Space Report 2011 Data
The Space Report 2011 is the result of extensive research by the Space Foundation and an array of independent research organizations and individuals with expertise in space policy, financial markets, science, education, and technology. This combined effort involves identifying, gathering, analyzing, and synthesizing publicly available information from sources including government and corporate reports, congressional records, and data provided by trade associations and private research firms. The report also draws upon articles in news, business, and industry publications. Illuminating the text of The Space Report 2011 are scores of exhibits tracking industry sector activity, major sources of industry revenue, trends in education and training, employment, government investment in space, and market performance of space industries. More information and ordering at: http://thespacereport.org/