The Financial and Social Impact of the Space Industry in Europe and the U.S.

Posted by in Leadership & Management

The space sector is changing in Europe and the U.S., especially with the emergence of NewSpace, a commercial industry in the sector that has experienced a boom in the past ten years. But the impact and the development of the sector is different on both sides of the ocean. What is happening in Europe and the U.S. in regards to space?

What’s Going on in the U.S.?

It’s worth noting that the U.S. is currently leading in terms of investments for NewSpace. More than two-thirds of investments come from the U.S., followed by Japan and the UK that account for less than 20% and 15% each. NewSpace is growing fast, and the U.S. is ahead of the game, having the most private companies dedicated to the sector, although it is closely followed by China in this regard. But it is still possible to see the biggest impact of the American space sector through the work of NASA.

Get Free Email Updates!

Signup now and receive an email once I publish new content.

I agree to have my personal information transfered to MailChimp ( more information )

I will never give away, trade or sell your email address. You can unsubscribe at any time.

NASA is still going strong. It produces over 1,200 technologies per year, collaborates with two-thirds of the world’s countries, and invests over $7 billion per year, $5 in manufacturing and $2 in science and technology development. It contributes to the space industry globally, but also advances economics, being above the national average in terms of investment. NASA generated over $64 billion in total output in 2019, supported over 300 thousand jobs, and generated around $7 billion in taxes. NASA continues to create and support jobs, leading to a higher return on everything that is invested, through the economy, science, technology, knowledge, and overall improvements to humanity. NASA benefits all states. The organization also contributes to inventions. In the pandemic, it created a ventilator for COVID patients in just over a month.

NASA is quite well-known. It frequently gets mentions in the news and other media, for instance, movies and shows, which helps people learn more about its work and trust its reputation, especially with the popularity American media has worldwide.

What’s Going on with Europe?

What is going in Europe, meanwhile? U.S. investors have been somewhat more expedient, but the growth of NewSpace is beginning to attract the attention of Europeans as well. The keyspace organization in Europe is ESA that is currently also a big player in the local and the global economy. ESA supports the European economy by investing in industry and academia, with every euro invested yielding up to 4 euros in the broader economy and attracting up to 2.8 euros in third-party investment. The European space sector has a large economic impact and fares well in comparison with others, and 90% of what ESA invests comes back to the government through tax. As happens with NASA that spends primarily on the U.S., ESA spends mainly on its European member states.

ESA has over three decades of data on the socioeconomic impact of its programs, so it’s possible to look at what is being accomplished and what has been accomplished. It’s possible to identify concrete applications, for instance, forest management in Sweden, the monitoring of water pipeline infrastructure in the Netherlands, or the navigation across the Baltic Sea that are all handled with the help of a single program, Sentinel. ESA developed specific projects, like the Ariane 5 rocket, and the development led to a sales multiplier of 4.1.

Not all programs have easily quantifiable effects, but many have qualitative ones. ESA and ESA-led projects have contributed to the growth of European industries, have shown effects through tax returns, and have significantly helped grow and develop human knowledge. Our understanding of space has been advanced by the ESA and its contributions.

On the European side, the current trends in the space sector reflect the global tendency towards private companies investing in the space sector and also for continued, steady growth.

ESA is a strong organization with a long history and billions in revenue. However, it could be said that it has received less publicity than NASA.

Conclusion

Both NASA and ESA promote technological innovation, research, and contribute significantly to the industries and the global economy. However, there is some faster forward motion on the side of the American market, and it seems likely that American space companies can have a small advantage in terms of investment. The U.S. has even taken measures to adjust its legislation to account for these new trends, while on the European side, only Luxembourg has done the same so far.

We can see that the space sector is robust on both sides of the Atlantic – it contributes massively to the economy, is very reliable in terms of investment, and does a lot to advance knowledge and improve life. However, it could also be said that ESA gets somewhat less publicity than NASA, in part due to the focus on media that their American counterpart has.