Last month, news broke that the European Space Agency (ESA) had signed a contract with SpaceX to put Europe’s four Galileo satellites into orbit in 2024. The decision to turn to Elon Musk’s US-based company came following delays to Europe’s own Ariane 6 rocket, meaning the continent has no its own means of carrying large payloads into space.
This is a disappointing development for the European space technology community, as it was designed solely to fill a gap in current capabilities, but one that, unfortunately, many of us expected.
Why Europe is lagging behind in space
Europe currently lags behind the rest of the world when it comes to space technology, and the SpaceX contract represents a frustrating situation that is hindering opportunities to advance European capabilities.
So why has Europe had to turn to US-based companies? After all, there’s no shortage of demand, nor is the region lacking the top engineering talent needed to develop its own rockets.
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One of the main problems is that there is no competition to drive the development of new capabilities, and I would argue that governments are not helping the situation either.
European space tech companies face a huge funding gap compared to the US and China, where most of the funding comes from NASA and the Department of Defense, with over $62 billion invested in 2022.
The situation is similar in China, where government support totals $12 billion. Compare this to ESA, which has an annual budget of just €7.5 billion, and it’s easy to see why the region is lagging behind.
How did we get here?
It is clear that dependence on foreign imports and companies like SpaceX weakens European sovereignty in the long run. So why have we fallen so far behind?
ESAs suffer in part from “geographical return” restrictions, meaning that if a country contributes money to an ESA, it must reinvest an equal amount of money into its own domestic industry.
“Geographical returns” were originally introduced to encourage investment and share burdens (and revenues) between large and small countries, but in recent years have come under intense scrutiny for hindering the competitiveness of the European space sector – in short, because innovation and competition are not evenly distributed. Funds should be directed to the best products, the best ideas and the most scalable commercial innovations, regardless of geography.
Earlier this year, ESA Executive Director Josef Aschbacher wrote that the region should move towards a “principle of fair contributions”, which would mean adjusting the contributions of each European member state according to the results of industrial competitions and the share that each industry actually gets in these competitions.
This is definitely a step in the right direction, but I don’t think it’s enough. Abolishing “geographical returns” altogether would be the kind of game changer that Europe needs to keep up with the global space technology race.
The power of partnerships
Another reason why Europe lags behind the rest of the world is the lack of public-private partnerships to support the growth of the continent’s space sector.
In the United States, for example, NASA’s Commercial Orbital Transportation Services (COTS) program helped SpaceX develop the first (and cheapest) partially reusable rocket, the Falcon 9. The success of the Falcon 9 laid the foundation for the enduring atmosphere of public-private partnership that fosters American competitiveness today.
NASA Administrator Bill Nelson has also said he supports fixed-price contracts with space exploration companies, where unexpected expenses are paid for by the companies building the technology systems, rather than by NASA, creating a more competitive market for growth-stage companies selling low-cost services to NASA.
But here in Europe, there is no atmosphere of public-private partnerships, in part because there is no common defense initiative, and in part because there is no Elon Musk or Jeff Bezos willing to invest billions. According to figures independently verified by NASA, the combined development costs of SpaceX’s Falcon 1 and Falcon 9 rockets came to about $390 million.
Unlike the US, no single European country is big enough to act alone. This is where public-private partnerships and collaborations between like-minded companies can make a big difference. After all, pan-European success stories such as Airbus and defense systems specialist MBDA have made this process thrive.
Europe needs to ignite its space technology sector
Space technology has the potential to advance innovation in every aspect of our lives. Europe is home to many companies developing technologies that will not only advance our extraterrestrial ambitions, but also improve life here on Earth. But to succeed, these companies need the support and backing they need to thrive.
If the current disparity continues, Europe risks being left merely as a bystander while the space industries of countries such as the United States and China grow rapidly – a situation that, if left unchecked, could not only impair its ability to launch satellites into space, but also endanger its economy, security and even defence capabilities.
And it’s a space race that we cannot afford to lose.
Jean-François Moriseur, founder and CEO of Cailabs. Photo courtesy of Cailabs
Jean-François Morizur is the Founder and CEO of Cailabs and a Forbes 30 Under 30 Science and Healthcare honoree. Prior to founding Cailabs in 2013, he was a Senior Associate at the Boston Consulting Group and is the co-inventor of Cailabs’ groundbreaking Multi-Plane Light Conversion technology.
