In an effort to assess the development of Europe’s downstream space market, as well as identify public and private uses for space-based applications and services, the European Parliament recently conducted an in-depth study that included interviews with over 30 policy makers, public authorities, and industry representatives – along with the GSA.
According to the report, entitled Space Market Update in Europe, the EU has already allocated EUR 6 billion towards the Galileo and Copernicus programmes, with an additional EUR 11 billion earmarked for 2014-2020. The report suggests that key rationales for EU intervention in the space sector include the development of an independent satellite infrastructure, the benefits of gathering knowledge and resources from ESA and Member States, and the potential contributions of satellite-based services and applications to Europe’s 2020 objectives.
In regard to market-specific findings, the study found rapid growth in the downstream GNSS market, with great potential for future growth. The report specifically recognises the GSA’s work in achieving this. “After seven years of combined activities of the European Commission and the GSA, the penetration rate of Galileo in all GNSS equipment models sold worldwide stems at 40%,” states the report. “This shows that industry is investing significantly in developing Galileo solutions well ahead of the programme’s full availability.”
The report also finds that demand originates primarily from the private sector. For example, the signal currently in use is provided by the US Global Positioning System (GPS). However, the report makes the case that the added Galileo signal, which will launch initial services this year, will greatly improve both service precision and reliability.
That being said, the study’s market-specific findings for the European downstream space market raised numerous challenges. For example, the report describes a highly-fragmented market comprised of limited large players and many specialised micro, small and medium enterprises working primarily with local suppliers. The most dominant players in the market are US IT giants like Google, who have handled, processed and distributed Earth Observation (EO) data to large audiences of users.
The report also identified several barriers to the achievement of the Europe 2020 objectives, including policy, market fragmentation, governance issues, technical concerns and a lack of skills/awareness. With regard to policy, for example, a focus on institutional and scientific needs leaves the commercial sector deficient, and a lack of an appropriate space industry policy means an absence of a proper regulatory framework for the market.
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Market fragmentation, according to the study, has been caused by an excess of stakeholders and the implementation of several different space related policies. In addition, funding of European R&D is low, at less than half of what the US provides (albeit with Europe representing a smaller market).
More so, governance of EU space programmes is still unclear, with the roles of the public and private sector remaining somewhat vague. Conflicting policies and issues of EU Member States have also played a role in governance concerns. On the other hand, such technical issues as delays in the Galileo launch schedule and in overall system and service availability were found to have negatively affected public perception of the programme.
In addition, some EU official documents suggest that Europe faces a challenge in securing sufficient human resources to support the EU's space industry. It is important to note, however, that the present study's interviews did not consider skill shortages as a major constraint.
The GSA Perspective
In order to promote the market uptake of the EU’s space programmes, the report suggests that the EU needs to provide stronger assistance to market development, supporting enterprise-appropriate timing, funding to non-academic, non-institutional players and increased commercialisation.
Additional recommendations include developing an EU space industrial policy, raising market awareness, avoiding further programme delays, providing equal access to EO data across EU member states, improving regulations and expanding dissemination activities.
All of these recommendations reinforces the key messages and findings of the GSA, including those of its own GNSS Market Report. In particular, the GSA is in agreement with the study's assertions that the GNSS downstream market has grown significantly, and that it is poised for further growth.
“Only a strong market uptake of European satellite-based services and applications can guarantee a return on investment sufficient to support Europe’s objectives,” says GSA Chief Executive Carlo des Dorides. “Clearly, these findings validate our commitment to market development and the need that our many successful activities not only be continued, but potentially intensified, to address the issues of market fragmentation and immaturity.”
Furthermore, the GSA strongly agrees that additional infrastructure-related programme delays must be avoided to ensure proper market uptake for Galileo. As a result of previous delays, some actions have not yet been taken with regard to targeting certain types of users and bolstering Galileo’s market adoption. “Achieving a fully-functioning infrastructure will be key to achieving proper market uptake, as it provides the ability to fully showcase Galileo’s capabilities to stakeholders,” says des Dorides. “Certainly, a stakeholder cannot assess innovation solely on future expectations.”
As to the report's suggestion that EU support for the downstream sector has been insufficient, it points to its own focus on user needs as a solution. The Agency has long sought to establish direct relationships through such means as the GNSS Service Centre Nucleus, periodic EGNOS surveys and the European GNSS User Consultation Group, to name only a few examples.
“This isn’t just talk,” notes des Dorides. “The GSA has already achieved relevant results in terms of E-GNSS market adoption, well ahead of Galileo readiness.” For example, the top 14 global chipset and receiver manufacturers all are currently working with the GSA to include Galileo in their products, and EGNOS is integrated in more than 70% of off-the-shelf receivers. More so, 86 FP7 projects have been effectively managed, and projects funded by the Horizon 2020 framework programme for R&D and innovation and new the Fundamental Elements funding mechanism are sure to add to this list of successes. In addition, the GSA has seen results in the most important market segments, with strong steps forward being taken in aviation, road tolling and rail.
In light of the European Parliament’s findings, and in combination with its experience and knowledge, the GSA is now ready to discuss the means to increasing market development with EU stakeholders.
“Increasing the appeal of R&D programmes to private companies, intensifying relationships with other institutions, developing an integrated space policy, reviewing existing EU regulations and increasing dissemination activities are all potentially valuable methods of increasing uptake,” says des Dorides. “By combining these solutions with previous and current GSA activities, the EU can build a strong private sector, drive demand for commercial services in Europe and become a major player on a global scale.”
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