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INSIGHT: The Futron Space Competitiveness Index
How Countries Invest In, And Benefit From, The Space Industry

The 50-year anniversary of the launch of Sputnik, humanity’s first venture into space, served to refocus global attention on the enormous progress made since the dawn of the Space Age. While space-related government programs and business activities have been more evolutionary than revolutionary on the whole throughout this era, human space activity has also been defined by sudden surges or changes driven by emergent forces.

In the 1950s, the Soviet Union’s unexpected entry into space caught the United States off guard. This prompted a major, national initiative to catch up technologically that permeated even into the classrooms of US schoolchildren. In the 1960s, the ongoing Cold War dynamic fueled a decade-long “space race”, culminating in the successful US landing of humans on the Moon.

In the 1970s, Asia asserted its space presence, as Japan, China, and India built on rocket tests during the prior decade to develop launch vehicles with indigenous technology. In the 1980s, the tragic Challenger accident called the US Space Shuttle program into question and encouraged alternative launch vehicle development efforts.

In the 1990s, the telecommunications boom led to a surge in space and satellite activity that provided, for the first time, a sustained rationale for a global space industry segment, based mainly on commercial, rather than government, imperatives. The collapse of that telecommunications boom in the 2000s, combined with a radically altered strategic environment for governments and militaries across multiple countries, has led to space industry restructuring, changes in government space priorities, the entry of small and agile private companies into the commercial space mix, and mounting international competition that has influenced all aspects of human space activity.

Against this backdrop, key strategic questions emerge that will define how the world engages in space in the future. In today’s rapidly changing space environment, how competitive are traditional space powers such as Russia, the United States, and Europe? What role will emerging space powers such as China and India play? Will Japan aspire to a larger role in space, or continue in its more secondary position? What is the competitive role for lower-tier space participants, including Israel, Canada, South Korea, and Brazil?

As the space economy diversifies, both in the globalization of space enterprise and the expanding number of countries engaging in space activity, decision-makers will require a more sophisticated understanding of the strategic, economic, and societal advantages of space industry. Factors requiring understanding include how to work the key levers of space power; how should leadership in space should be qualified; and how will space competitiveness be measured across military, civilian, and commercial sectors.

To address these questions, Futron Corporation has developed a Space Competitiveness Index (SCI) to examine the underlying economic determinants of space competitiveness across 40 individual metrics. Together, these elements provide a cogent and holistic framework for assessing national space competitiveness and assess national space competitiveness in three major dimensions: government, human capital, and industry. This approach has allowed Futron Corporation to produce an in-depth comparative analysis of 10 leading nations in space and space-related activity.

In addition to its country-level analysis, Futron’s 2008 Space Competitiveness Index also examines the competitive dynamics of three global industry segments of particular interest to the international space community: the military space arena; the positioning, navigation, and timing (PNT) sector; and the Earth observation (EO) market.

Futron’s 2008 Space Competitiveness Index ranks the relative competitiveness of the 10 leading space nations in each of these three segments, and also surveys the broader strategic challenges and opportunities that each global industry segment presents.

Why Have a SPACE Competitiveness Index? Currently, much of the vision surrounding the next generation of space missions and technology is tied to the perceived “second race to the Moon” and beyond. This civilian theme is complemented by an ongoing discussion about the military facets of space activity, as well as the role of both current and emerging commercial enterprises in space access and exploration.

Together, the civilian, military, and commercial space sectors focus the broader space discourse around questions about the elements of space competitiveness, the relative competitive position of traditional space leaders, and the role of emerging space powers such as China and India. This study, and its future updates, seeks to address pivotal strategic questions about space power and competitiveness:
  • What are the core measures of space competition?
  • Is “space nationalism” on the rise, and if so, what are the implications?
  • What is the current positioning of traditional space powers like the US, Europe, and Russia?
  • What role will emerging powers such as India and China play? Partners or competitors?
  • What is the competitive role for lower-tier players like Japan, Brazil, Israel, and others?
  • What are the implications of a multi-polar space community?
  • What are the economic consequences of a commercial space environment based on multiple international providers of key technologies, systems, and services?
A brief overview of key findings is provided below.
2008 Space Competitiveness Index
Current Positioning
  • The United States (US) is the current leader in space competitiveness, followed by Russia, Europe, and China
  • The US leads significantly in each of the major categories: government, human capital, and industry
  • Russian space power is resurgent, ending its decline following the fall of the Soviet Union
  • Europe increasingly acts in concert via joint policy, multinational corporations, and the development of “European markets”
  • China is emerging as a major space power with ambitious and visionary goals backed by heavy investment, centralized decision-making, and techno-nationalistic programs
  • India is poised to be a major collaborative player, and is a global leader in remote sensing
  • Canada’s space program benefits from strong European and US relations, as well as solid human capital indicators, positioning it for advancement if space is more highly prioritized by national decision-makers
  • Japan has overcome recent difficulties and continues to be an important player focused on the exploration and earth observation segments
  • South Korea has significantly ramped up its space program, but its space sector remains small and immature
  • Israel continues to be a leader in space technology but has limited commercial scale
  • Brazil has seen its position decline relative to other leading space nations, and lacks a clear strategy and commitment to invest in space activities

2008 Space Competitiveness Index
Total Aggregate Scores by Country
  • Ability for Government to Provide Structure, Guidance and Funding
  • Transparency regarding space strategy, policy, and spending remains a significant issue with some countries, particularly in connection with military space activity. This reduces the ability of commercial space actors to optimize investment and participation in the industry
  • The US has the most robust government policymaking structure, which includes detailed strategies for military, civilian, and commercial applications
  • The US also spends more money—both military and civilian—on space capabilities, although investment is skewed toward military budgets

2008 Space Competitiveness Index Government Scores by Country
  • European governments, through the European Union (EU) and the European Space Agency (ESA), have well developed policymaking structures and are increasing spending, particularly within the civilian and commercial spheres
  • Japan recently reorganized its space agency and is considering significant updates to its space law
  • Ability for People to Develop and Use Space Applications and Technology

  • 2008 Space Competitiveness Index
      Human Capital Scores by Country
    • There is significant concern within industry and government regarding the development of adequate human resources supporting the space sector, particularly technically skilled personnel such as engineers
    • Data regarding human resources within the space industry is sparse, and lacks consistency across countries
    • Usage of and reliance on space-enabled services is skewed towards larger, advanced economies, particularly with the introduction of new satellite services, such as navigation and two-way Internet access
    • Canada ranks well in human capital indicators due to its strong academic network and large number of university aerospace programs and civilian research centers
    • Civil society interest and support is widespread, with a significant number of organizations throughout Asia, Canada, the EU, and the US, many of which have international components
    • Ability for Industry to Finance and Deliver Space Products and Services

    2008 Space Competitiveness Index Industry Scores by Country
    • Satellite communications is the one market segment that is principally in the hands of the private sector
    • There is a significant increase of commercial interest in Earth observation, as well as a rapidly rowing downstream market based on the US-operated Global Positioning System (GPS)
    • Despite its perceived export control burdens, the US commercial space industry is the clear leader, followed by Europe
    • Despite the relatively high overall position of Russia and China, the government sector dominates their national space industries
    • China has outlined a strategic objective to stimulate commercial space activity, but has not yet developed the legal and regulatory structure to support this goal
    • Israeli space activities remain dominated by state-owned companies, but there are a number of small component manufacturers and entrepreneurs seeking venture capital

    The remaining portion of Futron’s 2008 Space Competitiveness Index study features 70 pages of research with six sections and an introduction and a conclusion, ranging from country-by-country profiles to global military space, PNT, and EO segments.

    A convergence of space technologies combined with a divergence of space actors—among both national space agencies and commercial space companies—is stimulating competition, creating new products and services, and driving innovation throughout government, business, and society. As a result of these dramatic and worldwide changes to the information and communications landscape, access to space and space-based assets are no longer viewed as a luxury, but rather as a strategic necessity. Understanding space competitiveness, including government policy, human capital, and industrial innovation, is a daunting task—yet a vital one for national technological and economic strength.