Volume 2: Reaching Higher: Canada's Interests and Future in Space – November 2012

Part 2
Context (continued)

Chapter 2.3
Global trends

The space sector, like the aerospace sector, is profoundly affected by the following changes in global conditions:

Global rebalancing. We are witnessing a rapid rise in the economic and geopolitical power of regions and countries other than those that dominated during the second half of the 20th century. North America, Europe, and Japan are being joined by China, Russia, Brazil, India, and other rising powers across Asia, the Middle East, Latin America, and Africa. Many of these countries are populous, geographically large, geopolitically ambitious, and willing to use state power and resources to build sectors considered to have strategic importance.
Figure 4: Share of world GDP – 2000 to 2020

Description of Figure

This line chart shows the projected evolution of the share of global gross domestic product (GDP) from 2000 to 2020 for the United States, the European Union, China, India, Brazil and Canada. The share of the Chinese economy has risen rapidly from less than 4% of global GDP in 2000 to about 10% in 2011, and is projected to reach almost 20% in 2020. During this period, the shares of the United States and the European Union are projected to decline steadily. The share of the United States peaked at 32% in 2001 and is projected to fall to under 17% by 2020. Similarly, the share of the European Union peaked at 31% in 2004 and is projected to decline to under 21% by 2020. China's economy is projected to become larger than the U.S. economy by 2018 and almost reach the size of the European Union by 2020. The shares of India and Brazil are also rising, but at a much slower pace. By 2020, India is projected to represent almost 6% of global GDP while Brazil should rise to almost 4%. Canada's share is declining slightly and should fall below 2% by 2020.

Source: IHS Global Insight.

GDP = gross domestic product

The hunger for natural resources and agricultural production. As hundreds of millions of people move from a rural, subsistence existence to more urban, middle-class lifestyles, there are significant increases in the demand for fuel, the raw materials from which consumer goods are manufactured, water, and food.

Figure 5: World energy consumption – 1990 to 2035

Description of Figure

This stacked bar chart shows the projected growth of world energy consumption until 2035. In 1990, member countries of the Organisation for Economic Co-operation and Development (OECD) consumed about 200 quadrillion British thermal units (Btu) of energy, while the rest of the world consumed about 155 quadrillion Btu. By 2008, consumption in OECD countries had been surpassed by the rest of world (244 vs. 260 quadrillion Btu). By 2035, consumption by OECD countries is expected to have grown only slightly, to 288 quadrillion Btu, while consumption in the rest of the world will have almost doubled 2008 levels, to reach 482 quadrillion Btu.

Source: U.S. Energy Information Administration.

OECD = Organisation for Economic Co-operation and Development

Climate change and environmental concerns. As the day-to-day effects of climate change are felt, and as potential environmental impacts related to economic development and resource extraction gain visibility, citizens and political leaders are seeking effective means of monitoring developments and designing responses to them.

Decrease in Arctic sea ice, 1979 and 2011

Sea ice extent

September 1979 (7.2 million km²)

September 2011 (4.6 million km²)

Source: Adapted from an image by Matt Savoie, National Snow and Ice Data Center, University of Colorado, Boulder, using SSM/I data overlaid onto the NASA Blue Marble.

The decline in military expenditures and advent of non-conventional security threats. In a climate of fiscal restraint, Western countries are reducing defence budgets while national security planners focus increasingly on managing non-conventional threats as well as the risks of traditional war.
The digital revolution. We are in the middle of an epochal communications transformation driven by exponential increases in computing power, the advent of wireless technology, and an explosion of social media. The economic, social, and political impacts are already profound—and they are just beginning.
An aging population. Shifting demographics are creating new challenges—and necessitating new strategies—for companies that rely on a highly educated, highly skilled workforce.

These general trends underpin and will continue to shape developments in the global space business. Perhaps most significant is the rapidly expanding use of space for civil purposes. As a result of technological advances—in particular, the increasing precision of satellite-based observation—and rising demand in both developed and emerging countries for natural resources, food, water, environmental oversight, and broadband telecommunications, the civil space economy continues to grow. Satellites and space-based applications have become essential tools for governments and private companies to satisfy this demand.

Figure 6: Global revenues of the satellite industry — 2001 to 2011

Description of Figure

This vertical bar chart shows annual global revenues of the satellite industry from 2001 to 2011. Global revenues grew steadily from about US$64 billion in 2001 to US$177 billion in 2011.

Source: Satellite Industry Association.

"Global satellite industry revenues grew by 175% for the period from 2001 through 2011, an average of 10.7% growth per year."

Satellite Industry Association, State of the Satellite Industry Report: September 2012.

A similar set of factors is contributing to the expanding use of space for military purposes. Satellites have become critical hardware in the arsenals of modern armed forces, particularly in the face of unconventional threats from small, secretive, militant groups. Satellites are used, for example, to gather intelligence through high-resolution ground observation and signals surveillance, to monitor borders and sovereign waters, to operate drones over unfriendly territory, and to support far-flung military deployments.

"Surveillance satellites are used on a daily basis for military planning and intelligence. The military operation against Osama Bin Laden in 2011 is a prime example of how these space assets are used. After the [Central Intelligence Agency] and U.S. military determined the potential location of Osama Bin Laden's compound in Abbottabad, Pakistan, satellite images were used to create a detailed map from above. The map was likely developed using assets belonging to the National Geospatial-Intelligence Agency, though a number of military and commercial satellites may have also provided relevant mapping data. This information included not only visible spectrum images, like those commonly seen on Google Earth, but also imagery in a variety of wavelengths. Using satellite imagery of the target over time can show the development of the site. In the case of the Bin Laden compound, images show an empty lot in 2001, a new building in 2005, and an expanded compound in 2011. When the operation was actually carried out, secure satellite communications were essential to connecting warfighters in the field with experts directing the operation."

Space Foundation, The Space Report: The Authoritative Guide to Global Space Activity, 2012, p. 25.

The expanding range of space-based applications—and the drive for national prestige and geopolitical leverage—is producing an influx of new sovereign players. Globally, government expenditures on space have increased, even as the world's largest space agency, the National Aeronautics and Space Administration (NASA), has had to cut spending. Russia is investing billions in revitalizing its space program. China is spending billions to turn itself into a major space power. The United Kingdom, Japan, and Brazil have re-engineered the governance of their space programs to advance national priorities. And dozens of other countries—among them, Israel, India, Iran, South Korea, Indonesia, Ukraine, Turkey, and Australia—have launched their own satellites or created national space programs where none existed.

Figure 7: Number of countries with satellites (launched independently or via a third party) — 1957 to 2009

Description of Figure

This chart illustrates the steady increase in the number of countries that have launched satellites into orbit, either independently or through the launch services of another country. In 1957, only one country had launched a satellite. This number had grown to 10 in 1970, with five countries possessing their own launch capability. By 1981, 18 countries had satellites in orbit and 8 had launch capabilities. By 1992, 26 countries had successfully launched satellites, with 10 countries having launched independently. In 2009, the most recent year for which data is available, 52 countries had launched satellites, of which 11 had independent launch capabilities.

Source: Organisation for Economic Co-operation and Development, The Space Economy at a Glance 2011.

Note: Data points are provided only for years in which an increase took place.

Accompanying the growth in the number of nations in space has been an appetite for international cooperation. Collaboration allows participating countries to share the substantial risks, costs, and benefits of developing, manufacturing, and operating space assets, whether for the delivery of public services or for exploration and science. Collaborative efforts are also driven by the need to manage an increasingly congested operational space environment.

The number of satellite-based applications used to deliver public services and support military operations means that most space activity is still funded by government budgets. Nevertheless, a key trend in the global space sector is the growth of private sector activity. The construction and operation of satellites for telecommunications purposes have long been commercially viable. Recent years, however, have witnessed an increase in the number of satellite-based applications for which private companies and citizens are willing to pay—notably in the areas of remote sensing, mapping, and navigation—and the development of small satellites that substantially lower the cost of entry into space for private businesses.

"Commercial Space" … refers to a paradigm that is gaining significant traction in both the US and internationally. Frequently also referred to as "NewSpace", it refers to the broadening of space-based businesses and industries beyond the traditional sphere of government space activities to develop significantly lower cost spaceflight technologies and open new markets that capitalize on the significant opportunities afforded by spaceflight. Accompanying this new trend is a rapidly growing community of relatively new, small to medium-sized aerospace companies working to minimize their overhead and streamline their business to achieve a large reduction in the cost of technologies for accessing and operating in space, and advocating progressive policies to facilitate the growth of the industry.

"… Commercial space or NewSpace refers not necessarily to new technologies, but rather to new applications, new markets, and non-traditional ways of funding and conducting space activities, and to the rise of a large number of small companies seeking to competitively pursue these activities."

Canadian Space Commerce Association, Fostering Innovation, Creating New Markets: Novel Approaches to Space Policy and Programs, submission to the Aerospace Review.

This period has also seen the establishment of private sector launch companies — in part in response to NASA's push to outsource the delivery of crew and cargo to low Earth orbit — and the emergence of investors ready to dabble in space tourism and space mining. Alongside their move into for-profit space activities, private companies are increasingly commercializing technologies developed for space through non-space applications in areas such as natural resource management and medicine.

These trends underscore the growing importance of space activity, and hint at the challenges and opportunities facing Canada.

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