Industry Study 

Competitiveness, Innovation Lacking in The Space Industry 

12  2,008 

By Alan L. Gropman 

The nation’s space policy generally seeks to maintain U.S. leadership in technology, ensure self-defense and the exploitation of space for national security and economic prosperity. But there is still no cohesive or specific plan to invigorate the commercial space market.

These and other challenges that confront the space industry — such as declining innovation and competitiveness — were the subject of a study by the Industrial College of the Armed Forces.

One of the most significant policy issues that affect this industry are the export control rules, said the ICAF study. The International Traffic in Arms Regulations (ITAR) has been the source of ongoing debate among the State Department, Congress and the space industry. The State Department contends ITAR has had limited negative effects and has provided essential security benefits. Congress concedes there may be room for improvement but has consistently failed to act.
 
U.S. companies view ITAR as a significant barrier that stifles trade and weakens the ability of domestic companies to compete in the global market. The government must re-examine current export control policies to seek a better balance between assuring national security and fostering an innovative space industrial base, the study said.

Acquisition policies also are cause for concern. Poor acquisition decisions in past space programs have led to unrealistic cost forecasts and rampant requirements growth, said the ICAF study.

Budget and schedule overruns in strategic military space programs continue to generate high political and financial costs.

The space industry today evidences little innovation, little competition, low capacity and high costs. As U.S. reliance on space continues to increase, these industry conditions become growing concerns, the study said. Why haven’t newer technologies emerged in the last 40 years? Until new technologies are developed, which is not likely to occur without increased investment by government, the current decline will continue.

The Chinese test of a direct-ascent, kinetic kill anti-satellite weapon in 2007 raised legal, ethical and policy questions regarding the “weaponization” of space. This test forces the United States to confront the possibility of a challenge to its use of space. The 2006 U.S. space policy announces the government will take “actions necessary to protect its space capabilities; respond to interference; and deny, if necessary, adversaries the use of space capabilities hostile to national interests.” Since the potential for such attacks is manifest, senior leadership must address the scope of a national response.

The number of space-faring nations is rising because space is a fertile ground for economic development, international cooperation or perhaps conflict. Global space governance, therefore, is essential to prevent national conflicts from extending to space. With increased space use and exploration, a number of related challenges remain unsolved, such as the need to address space-based property rights, ownership and mining rights or non-earth colonies. U.S. policy calls on the government to pursue international cooperation, but it fails to address strategic goals for space relations with such countries which have the potential to rival U.S. space capabilities.

The nation’s success in space is dependent on government involvement, motivation and inspiration. The consolidation of the major industry players and a general downturn in the commercial market demand, combined with export restrictions, has left the United States space industry overly reliant on the government for revenue and technology development. Europeans are outdoing the United States in assisting this industry.

The European Space Agency has focused exclusively on civil space. The new European space policy includes important provisions suggesting a potential for a larger economic and political role for space in Europe. The European Union is also providing an economic stimulus by funding research programs.

The U.S. government’s attempt to revitalize a declining space industry has achieved some success. The space policy on commercial remote sensing capabilities is a case in point. It has been a catalyst to advance and protect national security and foreign policy interests by maintaining the nation’s leadership in remote sensing space activities, and by enhancing the remote sensing industry.           
    

Alan L. Gropman is a distinguished Professor of national security policy at the Industrial College of the Armed Forces, National Defense University. This article, as all others in this series, has been derived from an ICAF student/faculty industry study, which can be downloaded by clicking here.

The views expressed in this article are those of the author or industry study group and do not reflect the official policy or position of the National Defense University, the Department of Defense or the U.S. government.



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