The two faces of the space industry

Episode 10 takes a look on what is #newspace and what is not. In this bonus episode we are looking on two common archetypes of the industry. The beggar who will go to their government and plea for money and the don who will demand it. Let’s have a look.

This is not the free market we have been hearing about

In my discussions with key actors I am always puzzled how far the space industry is actually away from a being a proper market economy. In fact I sometimes wonder whether it is maybe me who gets it all wrong?

I was born in East Germany in 1979, why does the space industry remind me more of those days then of a free market?

I was born in the Democratic Republic of Germany (GDR) in 1979, a country whose government controlled industry was known for being notoriously inefficient. It is common knowledge that because the improper way it was run the whole system collapsed and consequently mounting pressure by people on the street allowed long sought peaceful re-unification of the two Germanys in 1990.

State run economy has proven to be an ineffective way of doing business. Why are we allowing this for space?

As a result for most of my education I was brought up with the idea that a free market is better than the alternative I lived through in my early childhood days. You are probably able to imagine my surprise when I was first exposed to the space industry: in my eyes the whole system looked very like things that I thought had already proven not to work in the past.

The beggar and the don

In my almost 20 year career in the industry I was thus both a keen observer as well as an outspoken critic of the way how things are run. And lately the image that has formed in my mind is that there are generally two types of actors in this “market”: the beggar and the don.

There are two archetypes in the space industry: the beggar and the don.

The beggar represents those who go up to the government or funding agency and plea that a certain amount of the entire budget should be spent on them. Recent examples that I know are the open letters from the German space SME working group (AKRK) as well as the group of start-ups who wrote to Commissioner Breton that they want to participate in the broad band initiative of the European Commission. I know however for a fact that it is a sport of almost all companies to go to their national delegation (to ESA) to speak on their behalf for this or that project.

If you go to your government and ask for budget increase, if you beg or demand funds, then you are not #newspace

The “don” that came to my mind for the other group is Don Corleone, who is famously known to make an offer that you cannot refuse. Sure, this seem to be a drastic image but put yourself in the shoes of the politician that is being told that this project needs to go to a certain company otherwise jobs are in danger of being lost. In other words: do you really want to be the one seen in the news as being responsible for killing 1000s of high tech jobs. Many outraged families, voters, no less. If that is not blackmail worthy of a don, what is?

My Recommendations

To Politics

Don’t be an enabler of these structures. You don’t want to an industry made out of beggars and dons. Not least in Germany we know exactly where this road leads to. So, if somebody comes to you and asks for a certain percentage to be spent on their peer group, kick them out. If somebody argues with the gain or loss of many high tech jobs, kick them out, too.

1) Don’t spend on space – spend on solutions

2) If somebody request to increase budget or spend on them – kick them right out

3) Jobs created or EUR multiplier are only used when inherent value is uncertain.

The sad truth is, that because of answering to these calls in the decades prior, politics has deprived industry from all incentive to do better. And due to the lack of these incentives we are now in this quagmire. Considering how deep we are in the morass, there should be no illusions it will be painful to get out of there no matter what.

Space is one of the least innovative environments possible: entry barriers are high, it literally does not pay to be innovative and contracts go to those with the right connections or who are very simply at the right location. We need to do better!

Instead, I recommend to focus more what it really is you need from space. The answer should better not be jobs or lever investments (EUR gained for EUR spent) as those things come forward only if inherent value is uncertain. Instead, look for the applications that you need to be done. Support those who have the best solutions irrespective to who they are and where they are from.

To Industry

Don’t be a beggar, don’t be a don. You might think of losing out if you don’t do it because everybody does. This is however the reason why things don’t get better. While it is important to look for other customers, I am the first to admit that governments will for the foreseeable future still be a major player. That does however not change the fact that you need find the best solution for their problems.

Don’t be a beggar. Don’t be a don.

If after that customer still does not buy your product, consider that you may not have a convincing solution yet or that you are barking up the wrong tree. Go back to the drawing board and try again.

How can you help:

This text is part of a series of articles in which the author sets the framework to start a discussion about the wrongs of the space industry. If you have experienced similar things, leave a comment. Other views and opinions are very welcome, too, as they may present a way forward. Please be kind to each other.


The author’s views are his own do not represent the views of Berlin Space Technologies.






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