Critically assessing space sector development in Africa – Part 1
Governments in Africa will likely be influenced by the trend of governments around the world increasingly intervening to develop their national space sectors. They should, however, carefully consider their approaches to intervention before committing to them. Stakeholders, in turn, should critically assess government initiatives; they should assess how these initiatives align with their own goals and then react to them accordingly. One way to critically think about space sector development initiatives is to consider whether they are “enabling” or “steering” market activity. Both approaches have potential positive and negative consequences. Stakeholders can better assess how to react to space sector development initiatives if they consider the extent to which the initiatives “enable” or “steer” market activity.
Below is the first part of a three-part article on this subject. Read part two here and part three here.
The pressure to develop national space sectors
As the global space sector continues to grow, many governments are building up their space programs. Eight countries have created space agencies in the last decade. No longer do we live in a world with a handful of space powers; space engagement is diversifying among countries.
There are a few reasons why governments want to intervene to develop their space sectors. Three stand out. First, having a space program improves national prestige. Like hosting an international sporting event or a well-known multinational corporation, having a space program gives a country a reputational boost that policymakers can use to advance other objectives.
Second, the space sector is rapidly “commercialising”. Big names in the space sector today are those of private firms, not government agencies. SpaceX launches rockets, for instance, and Planet Labs collects Earth imagery. Though firms still depend on government contracts, the space sector is maturing to the point that government contracts may no longer be necessary; firms can succeed simply by engaging with other firms. This is attractive to governments since it implies that growing the space sector costs less government resources than it used to.
Third, the space sector depends on a variety of next-generation technologies. Artificial intelligence will play a more important role in managing constellations of satellites, for instance, as orbits become more crowded. Futuristic ion thrusters are being built to help satellites maintain orbit. Internet-of-Things services are fundamentally space-dependent; they rely on interconnectivity of devices that are tracked through space and time, which is in turn enabled by satellites. There is thus a lot of “bang for the buck” in terms of growing a national space sector; it builds expertise in technologies that will be important in tomorrow’s global economy.
“No longer do we live in a world with a handful of space powers; space engagement is diversifying among countries. ”
Governments in Africa will likely feel pressure to participate in the space sector for the above reasons and others. Certainly, there is already interest on a regional level, as evidenced by the progression (albeit frequently stalled) towards an African Space Agency. South Africa is often noted as being particularly ambitious – with its hosting the Square Kilometre Array, for instance – though it is but one of several African countries seeking to polish its space sector credentials.
“Enabling” versus “steering” space sector development
Governments in Africa – indeed, governments everywhere – should think carefully before embarking on any significant initiatives to develop their space sectors. So, too, should stakeholders in those space sectors, whether they are inside or outside of government. Space sector development has potential benefits if done right, but it also has potential negative consequences if done wrong; public money can easily be wasted on ill-conceived plans.
There are two potential approaches to space sector development which, for convenience’s sake, can be described as “enabling” and “steering”. The first approach focuses on removing barriers to doing business, supporting firms with solid business plans, and helping firms further refine their strategies. This is a typically ‘laissez-faire’ approach to intervention. The second approach focuses on cultivating desired areas of business activity, supporting firms already in those desired areas, and providing firms with financial incentives to grow the desired areas. This is a typically statist approach in which government intervenes to guide business behavior.
Representative of the “enabling” approach are New Zealand and Australia, which each recently established space agencies. This is not to say there are no differences between them – the Australian space agency tries to guide business activity more than the New Zealand space agency, for instance, by offering more financial incentives in key business areas. That being said, the general thrust of both intervention approaches is to support competitive firm’ success. Both agencies are reducing bureaucratic requirements to doing business in the sector, and the firms they support have a significant amount of independence in choosing their business plans.
South Korea and Taiwan, on the other hand, represent the “steering” approach. They both have long-standing space programs in which government agencies prioritize certain business areas. The agencies decide which business areas to develop – satellites or launch vehicles, for instance – and then contract firms to provide components. A long-term goal of both programs is to transition from contracting foreign firms to contracting domestic firms, using the former to enable knowledge transfers which then facilitate the latter. There are differences between South Korea and Taiwan – South Korea, for instance, seems more willing to contract domestic firms that do not yet have expertise, as is the case for the conglomerate developing rocket engines for a state-built launch vehicle. That being said, the overall thrust is similar: the government chooses what needs to be done and then promotes related business activity.
