In a report commissioned by the European Union, former European Central Bank chief Mario Draghi called for ESA to scrap its geographical return policy to ensure the continent’s space industry remains competitive in the global market.
Published on 9 September, Draghi’s The Future of European Competitiveness report offers in-depth analysis and recommendations on the future of key European industries, including space. It notes that while sales to European public entities have seen growth, the space industry’s commercial and export sales have suffered a notable downturn.
The report states that the industry’s combined sales have decreased from €8.6 billion in 2021 to €8.3 billion in 2022. In a historical context, Europe’s 2022 results represent a figure not seen since 2009 and have been on a steady decline since 2017. According to the report, the primary source of the losses in revenue comes from launcher systems and satellite application systems.
On the launcher systems side, the report details an industry “in crisis” and uncertainty with its potential for future competitiveness. A primary reason identified for this outlook is Europe’s failure to adapt to the technological changes in the market.
“The launchers and space transportation programmes driven by the ESA and its member countries have failed to react to this global technology evolution, due to complex decision-making, a governance structure characterised by a ‘geographical return’ principle, and the absence of a European preference approach.”
Another significant factor identified in the report limiting the potential future competitiveness of the European space industry is financing. It highlights insufficient investment in research and development and limited access to public and private funding.
The report provides a set of ten recommendations split into short, medium, and long-term timeframes.
In the short term, it recommends doing away with ESA’s geographical return policy, establishing a European single market for space with a common legislative framework, improving access to funding for startups and small to medium enterprises, creating targeted European preference rules, and defining an EU policy framework for launchers to ensure autonomous access to space.
Medium-term recommendations include reforming European space governance to reduce complexity and fragmentation, establishing a multipurpose EU space fund, exploiting synergies between the space and defence industries, and promoting improved access to international space markets.
The only long-term recommendation outlined in the report is the definition of joint strategic priorities for research and innovation supported by increased coordination and funding.
