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Space: The new frontier for economy and research

Digital format, 22/11/2021, National Roundtable

The history of human presence in space consists mainly of two phases. The first of these, more political – and in hindsight, military – in nature, was entirely in the hands of the United States given the high cost of investments. In the second phase, which spawned the “new space economy”, has reduced government participation and opened the doors to private interests eager to offer auxiliary services to institutional operators as well as to develop new activities.

The current space economy has an estimated value of between 370 and 450 billion dollars and, considering the rapid growth of the past decade, that figure is predicted to surpass 3 trillion by the end of 2040. This diversified and multidisciplinary sector has a value chain stretching from research and development, to the construction of major infrastructures, to the generation of products and services for sectors such as navigation, telecommunications and monitoring systems to cite just a few examples.

Italy occupies top positions in many categories in this sector, ranking seventh in 2020 among the G20 countries for government-budgeted space program (in percentage of GDP) and second in the world for R&D investments in the space sector. No less than 7% of Italian international trade is in this sector and the country ranks 5th for international patents; in both cases performance is noted as superior to that recorded in the overall categories.

Italy’s nearly 300 companies operating in this sector are young – most having started up after the turn of the millennium – and generally small, with total revenues of less than two million euros. By contrast, they boast an extremely high level of specialization and are capable of interfacing with traditional economic sectors such as agrifood, fashion and automotive.  Moreover, in recognition of its importance as a driver of development, the PNRR has earmarked a significant share of its resources for space development.

As opposed to the United States, the number of private operators in Italy, and in Europe more generally, is still quite limited. Over the medium-term, this fact could potentially widen the gap between the two main protagonists of the space economy and lead to the emergence of new actors. Despite the EU’s strong regulations and clear strategy – factors underlying its most successful programs – problems do persist. Supply and demand are still fragmentary, the approach to investments differs considerably to that of the US due to limited centralization and institutions are struggling to dialogue with and support private business. Nevertheless, since technological independence is strategic to maintaining international standing, one solution would be to further cultivate synergies, at least between the three principal nations on the continent – Italy, France and Germany. This could contribute to increasing the Union’s dynamism in what has become an increasingly complex and fraught geopolitical and economic framework.

In any case, there is widespread awareness of the fact that investments in space have a significant impact on many aspects of daily life and the economic and social fabric. NASA itself has calculated that the activities that led to the moon landing paved the way for at least 150,000 patents. Countless applications developed for space are destined to multiply in the future to the benefit of institutions, business and the society. Thus, space is confirmed as a formidable enabler of economic development and, at the same time, a context within which to test new solutions for resolving, or at least mitigating, some of the planet’s main dilemmas: first and foremost, climate change and its consequent extreme weather events, but also pollution, hunger, the spread of disease and so forth. Naturally, a new legislative framework is going to be needed to make that possible.