Following up on their recent reports on satellite demand and space exploration, Euroconsult released a new report in mid-December on the future of spending on government space programs.
The report, entitled “Government Space Programs: Benchmarks, Profiles and Forecasts to 2031” looks at government spending on space-related activities. While this includes more traditional space development and exploration, Euroconsult has found that it may be defence spending that drives growth.
The release for the report said that there will be a “continued increase in global governments’ space budgets.” They said that government space budgets reached USD$103 billion in 2022, “a 9% increase since last year and a record high for the sector.”
In the executive summary for the report, they said that the COVID-19 pandemic actually had a strong effect on space spending, but that it had a bolstering effect instead of a restraining one: that “growth has been observed since the end of the pandemic, notably driven by recovery plans, with governments injecting cash into the space sector to support industry.”
They also pointed to global inflation as encouraging further spending to sustain growth and ambitions, at least in the short term. In the long term, Euroconsult predicts that “governmental space budget growth is expected to be sustained in the coming years before decreasing to approximately 1% – 2% annual growth between 2024 and the end of the decade.”
Nevertheless, they predict a shift in government spending away from civil spending and towards defence spending. Regional defence conflicts and “the militarization of space” will keep defence budgets up, while “public budgets may come under increasing strain due to macroeconomic conditions, putting downward pressure on civil space expenditures.”
In their release, Euroconsult said that “current geopolitical tensions have confirmed space as a strategic operational theatre for hybrid warfare tactics,” which push governments towards investments in defence-related applications. Traditionally, that would include applications like “Telecommunications, Navigation and Earth Observation,” but Euroconsult said growth will be more prominent in “Space Security & Early Warning systems to further protect their space assets.”
At the moment, 54% of total spending ($55 billion) is made towards civil spending, while defence expenditures make up the other 46% ($48 billion). Euroconsult predicts that this ratio will slowly decline, and they project that it will reach 50/50 parity by 2031. Space-focused defence spending grew by 16% in 2022, higher than the overall budget growth.
Euroconsult Senior Consultant Charlotte Croison elaborated on this trend in an email exchange with SpaceQ. She said that “Space militarization has never been stronger, and that new military branches, more or less similar to the US Space Force, are being stood up in different countries to manage the development of new capabilities,” pointing to Canada’s own 3 Canadian Space Division as an example. She said that “space has indeed become a warfighting domain and a proper operational theatre for hybrid warfare tactics over the past few years,” and that “although we do not expect frontal attacks in orbit, satellites are more and more subject to cybersecurity attacks due to their strategic importance.”
In terms of comparative spending, Euroconsult said that the Americans remain “confirmed as the leading space program,” spending $62 billion on space and 60% of the world’s total. China is second at $12 billion, Japan and France “battle for 3rd” at $4.9b and $4.2b respectively, while Russia “trails at $3.4 billion,” following a “decade-long drop in ranking.”
And as stated in their other reports, they forecast “strong growth in satellite launches.” Governments launched 987 satellites over 50kg over the last ten years—of which 377 were for defence—but are set to quadruple that number over the next 10 years. That number doesn’t include SmallSats under 50kg, which are becoming increasingly ubiquitous in low Earth orbit and may well grow in numbers far more owing to their low cost and comparative ease of launch. Â
They said that “the number of countries developing/procuring satellites will also increase, with 60 countries launching satellites during this period.”