The Lunar Transition

THE SPACE SECTOR HAS ALWAYS BEEN SUPPORTED BY PUBLIC MONEY AS SPACE IS A STRATEGIC INDUSTRY THAT IS FUNCTIONAL TO THE GEOPOLITICAL STANDING OF STATES. TO CONSOLIDATE THE POSITION OF PRIVATE ACTORS, INCREASINGLY ACTIVE IN A GROWING MARKET WHICH WILL BE WORTH UP TO $1 TRILLION IN 2040, ITALY NEEDS TO REDEFINE THE GOVERNANCE OF THE SPACE INDUSTRY AND ESTABLISH A NATIONAL LAW ON SPACE

by Andrea Conconi and Filippo Papamarenghi, Knowledge analyst at SDA Bocconi Space Economy Evolution Lab
Translated by Alex Foti

The economic value of the space economy is estimated to be at around $546 billion dollars in 2022 (Space Foundation, 2022), with an expected growth of up to $1 trillion by 2040. Military space programs and civilian space programs, traditionally funded by governments, are gradually joined by projects financed by private investors.
 
Europe is the world’s second largest space economy, for a total value of nearly $100 billion (Euroconsult, 2022); Italy is the third largest contributor to ESA, the European Space Agency, after France and Germany, but is ranked first for optional programs. The Italian space industry has formed an ecosystem of companies spread across the entire supply chain, from upstream (design and construction of launch infrastructure and space systems) to downstream (management of applications and services) sectors; this characteristic is found in few countries in the world. The companies are supported by research centers, universities, public institutions and other stakeholders who assist the evolution of the space sector.
 
Italy has allocated a total of approximately €7.2 billion to the national space industry over the next few years. At a private level, if Europe has attracted around 9.3% of capital between 2014 and 2023 (Q1), Italian investment is at around $62 million, corresponding to 0.25% of European capital investment in the same period.
 
These data paint an image of the importance and breadth of the Italian space industry, which remains a sector of excellence when compared with what happens in the rest of the world. Its development has so far been guided by the public hand which, by acting according to an entrepreneurial state model, proposes and directly funds a series of space programs which are then developed by the private industrial sector. The financing flows that support the sector, therefore, are largely of public origin; this is actually in line with what happens in almost all other countries in the world, as space sectors were born and developed as a nationally strategic industries directly functional to the geopolitical positioning of states. Today, the United States is the country that most of all is trying to stimulate the expansion of the private commercial market in space, both in terms of obtaining financing and in terms of the end customer base to be addressed. Looking ahead, the objective would be to have governments increasingly play the role of mere customers of a private product, financed at least mostly if not completely by private funds, designed and built with technologies developed by the private space industry.
 
This transition trend is generally shared on a global scale, at least at the level of intent; but the implementation of such a paradigm shift is anything but trivial. Following the global trend, the Italian system is also exploring ways to assist the expansion of the space sector to the private commercial market. One of these, and among the most important, is certainly the regulatory one: Italy needs a new law on space, which can take into account the development trends that the sector is experiencing and its economic, commercial and social expansion. Regulatory intervention would be essential, not only useful, because it would serve as the first element of structural innovation within which the private sector can imagine new possibilities for expansion, development of business models, approaches to private marketing - all avenues that would be difficult to imagine with the present structure. The point is therefore to intervene at a systemic level, with a top-down approach.
 
In the face of a series of works conducted jointly by the Space Economy Evolution Lab (SEE Lab) of SDA Bocconi in collaboration with the Leonardo Foundation and Sapienza University of Rome, it emerges that the ecosystem of Italian space actors (industry, associations, institutions, SMEs) hopes for a regulatory intervention that unfolds in five areas: national strategy, industrial policy, financial policies, redefinition of national governance and the structure of a national law on space.