Third World Activities in Space Commercialization: A Note

By Goodrich, Jonathan N.; Haar, Jerry et al. | Multinational Business Review, Fall 1996 | Go to article overview

Third World Activities in Space Commercialization: A Note


Goodrich, Jonathan N., Haar, Jerry, Mindreau, Manuel A., Multinational Business Review


The last decade has witnessed a pronounced increase in space commercialization, as multinational companies have expanded their business activities in transportation and launching services, communication satellites, and remote sensing. A previously underreported phenomenon is third world activities in space commericalization: technology transfer, technical cooperation, and marketing and sales--especially communications satellites. This article addresses that shortcoming by reviewing third world activities in space and business opportunities for multinationaal companies. As large corporations search for new uses and new markets for space technologies, it is expected that cooperation with developing countries, including North-South joint ventures, will expand significantly, especially in communications satellites.

INTRODUCTION

The birth of the space age is often traced back to October 1957 when the Soviets successfully launched Sputnik I, the first artificial satellite to orbit the Earth. After that, outer space -- generally regarded as 60 miles above the Earth and beyond-- has been explored primarily by the United States and the former Soviet Union. However, beginning in the 1980s more and more countries, especially the members of the European Space Agency (ESA), engaged in space research and exploration. It is only in the last decade with the end of the Cold War, that developing countries started to get involved with space commercialization. Among the latest and most active are China, India, Brazil, Israel and Pakistan. More recently, the announcement in June 1994 of a third UN conference organized by the UN's Office for Outer Space Affairs aimed at reaching a more equitable use of space technology has been qualified as a victory for most of the developing countries who have long pushed for greater access to outer-space technological advances. The conference is scheduled for late 1996.

Nevertheless, there is little literature on the third world activities in space. This article will try to address this shortcoming by providing an overview of recent third world engagement in space commercialization; of the business opportunities for multinational enterprises in this industry; and of the obstacles in performing such activities, namely conflicts between developing and industrialized countries and technology transfers between North and South.

BUSINESS OPPORTUNITIES IN SPACE COMMERCIALIZATION

Space commercialization refers to efforts on the part of governments and companies to use the space environment to (i) make better and less expensive products for sale on Earth, as well as for use in space; and (ii) perform space related services, such as satellite construction and launching, for example (See Table I).

World-wide, the space industry makes approximately US$100 billion a year, with the U.S. and the former Soviet Union representing together 52 % of the world's space budget. Last year, Euroconsult --an independent consultant firm based in Paris-- predicted the market for commercial outer space services will be US$115 billion through 2004. (Couvalt 1995) However, lured by more optimistic projections of a US$160 billion market over the next decade, U.S. companies large and small, along with a smattering of partners and feisty rivals in Europe and Asia, have begun investing billions of dollars in new generations of satellites, launching and earth stations, ground receiving systems, as well as in advanced rockets to put those satellites into orbit.

In general terms, space commercialization can be divided into seven major industries: (i) transportation and launching services; (ii) communication satellites; (iii) remote sensing satellites; (iv) manufacturing and materials processing in space (MMPS); (v) space stations and space platforms; (vi) defense and (vii) ground-based support. While developed countries are still the uncontestable actors in all of these categories, developing countries have been particularly active in the former three lately. …

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