Earth at night viewed from space. Photo: ESA/NASA

Europe needs to adopt faster procurement mechanisms, invest more in emerging technologies, and have closer collaboration with non-space sectors to close an innovation gap with the global space sector, the European Space Policy Institute (ESPI) argues in a new report released this week. 

The report assesses the industrial landscape for Europe’s space industry, with recommendations for how Europe should increase speed, scale, skill, and vision of its space industry. Called “Blinded by the Light,” ESPI argues that Europe has been blinded by the light of disruptors like SpaceX and China’s rising space power, and that new competitors were dismissed for too long. 

It offers a sobering look at the European space industry, detailing a number of factors at play including a declining market for Geostationary (GEO) satellites which impacts Europe’s legacy manufacturers; a lack of European launch capacity; dominance of U.S. cloud providers impacting the sovereignty of space data; dependency on foreign commercial companies for Earth Observation (EO); and limited space-based missile tracking capabilities for defense. 

“Once a global export leader across a spectrum of products and services, Europe is now facing a massive challenge in terms of receding market shares, low profitability and an ecosystem that is no longer able to keep pace with global disruptions and evolving needs,” the report says. 

ESPI conducted two workshops this year with 33 leaders in Europe’s space sector, which contributed to its findings. Interestingly, 88.5% of respondents at the workshop said that Europe’s space sector is lagging behind global actors.

ESPI also reports that the cumulative gap between European and the U.S. space spending is worsening annually at a rate of 15%, and has doubled since 2019 from 29 billion euros ($34 billion) to 58 billion euros ($68 billion). 

The report makes a series of recommendations across procurement, innovation, economic security, talent, and future demand. One of which is for Europe to embrace a similar model of agile procurement used by the Space Development Agency (SDA) in the United States, integrating faster development cycles into Europe’s civil and military space development and procurement programs. 

It also calls for a more muscular attitude to buying European and maintaining European control of space companies, to “prioritize industrial bids and service offers of companies headquartered in Europe, and under European control,” and to take steps so that “Europe does not lose its key strategic assets to foreign buyouts and influence.” 

ESPI also recommends more funding of dual-use technologies in earlier stages and investing in long-shot technologies that could impact the future of space 10 years from now. 

Earlier this year, ESPI released a report on how a ramp-up in defense spending in Europe is leading to greater investment in space companies, and ESPI argues that it can have greater commercial influence as well. 

“The balance of power is still ours to influence, as long as Europe acts with bravery and intent,” ESPI says. “It should not only rely on increased defense expenditures for space as a cushion offering short-term relief, but as a springboard for new innovative products, solutions, and services with an ambition to reclaim global markets.”