COVID-19 challenges and opportunities for the space economy

As the reality of the COVID-19 pandemic sets in, the effects on organizations present many challenges and for some, opportunity.

The first challenge – health and workplace protocols

The first challenge to any organization during the pandemic is the health of their employees.

Next comes the setup of their workplace. For some, teleworking is possible, for others, those who need employees in place to manufacture goods, the challenge is greater. New workplace protocols need to be instituted.

An example is Sinclair Interplanetary which has a 5,000-square-foot manufacturing facility in Toronto. Work is proceeding for the time being, as employees work far enough away from each other.

The second challenge – health of the business

Another challenge is how will the bottom line of any organization be affected. If orders for goods and services slow down, does the company have a plan in place to deal with the downturn? Can, or will an organization keep employees on?

Does an organization have the resources to weather the pandemic for 3 months, 6 months or a year? Can they tap into government programs recently announced?

There is one overarching problem every organization is facing today and that’s uncertainty.

The good news

If we look at the value chain of Canada’s space sector as per the 2018 State of the Canadian Space Sector Report from the Canadian Space Agency (CSA), it indicates that 84% of the chain is in the downstream side. 48% is services, 18% is satellite operations and 18% is products and applications. This indicates that there is likely a good percentage of the people employed in these areas that can telework. That will lower the impact on many companies.

Looking at the upstream segment the data indicates that 7% work in ground segment manufacturing, 6% in space segment manufacturing and 3% in research, engineering and consulting. Once again there’s a percentage here that can telework.

The need for data

It’s clear already that government agencies in particular are, and will be, clamouring for more data from the space sector, particularly satellite data.

Companies like GHGSat, SkyWatch, UrtheCast etc., could see an uptick in demand for their services. Of course, GHGSat currently has one satellite sitting in Kourou, French Guiana, grounded and waiting for Arianespace to resume launch operations. Once that satellite is launched and commissioned, I’m sure data from that satellite and another they are launching later this year will be in demand.

Innovating specifically for COVID-19

So far SpaceQ has come across one company in the space sector that’s shifting gears to help the medical community.

Space Engine Systems of Edmonton has designed a respirator that can be used by 20 people at a time. They’ve submitted a proposal to the government through the COVID-19 Challenges Procurement Program and other channels and are waiting to hear back. Pradeep Dass, the owner of the company told SpaceQ they aren’t looking at profiting from this, they’re happy to contribute to the cause and build the respirators at cost. Dass has another company that has years of experience of building pumps, compressors and other equipment for other sectors.

SME’s at risk

Uncertainty is why the federal government is providing unprecedented stimulus to the economy. How much more stimulus will be injected into the economy is unknown. I don’t think even the government knows at this point. And not all sectors will be affected the same.

There are space companies at risk. An example is Magellan Aerospace which has the majority of its revenue coming from the aviation side of the business. Magellan will likely be helped out if the aviation sector receives some sort of bailout.

In 2017, the CSA stated that “the top 30 Canadian space organizations, which included 4 universities and 18 small and medium-sized enterprises (SMEs), generated 97% of total space revenues”. That’s a considerable amount of revenue in very few organizations.

It also means there are well over 100 organizations that are part of the 3% that generate significantly lower revenues. Do these small businesses have the ability to weather the pandemic? I think the answer is for the most part yes, as most are in the downstream. It’s a matter of whether the demand of for their goods and services will be enough.

Other organizations that are at risk include non-profits. These include small organizations that generate a portion of their operating revenue from events. This includes the AIAC, CASI and many others.

The CSA’s role

The CSA is still hard at work, though it’s almost completely stopped issuing public updates on its projects and programs. In the short term they have no choice, it’s a government directive. However, the CSA must at some point start issuing public statements to keep everyone informed on their activities and status. Even though they get their direction from Innovation, Science and Economic Development (ISED), ISED needs to allow the CSA to show some leadership during this crisis.

About Marc Boucher

Boucher is an entrepreneur, writer, editor & publisher. He is the founder of SpaceQ Media Inc. and CEO and co-founder of SpaceRef Interactive LLC. Boucher has 20+ years working in various roles in the space industry and a total of 30 years as a technology entrepreneur including creating Maple Square, Canada's first internet directory and search engine.

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