Navigating Risks in the Expanding Space Economy

The space economy is a realm of immense potential, offering exciting opportunities for innovation, exploration, and economic growth. However, like any emerging sector, it is not without its share of risks and challenges. Our dependency on space has grown. We utilise space technology to monitor weather patterns, and the impacts of natural disasters, communicate across countries, sow crops, and move efficiently around the earth.  Critical infrastructure and services like 5G connectivity and GPS navigation rely on satellites, meaning nearly all of society has daily functions that are linked to space-based assets. These daily functions are transcribed across multiple industries and our dependence on them makes them potential targets for strategic adversaries. By understanding these risks and proactively addressing them, we can safeguard the long-term sustainability and success of this thriving industry.

The space economy, also known as the space industry or space sector, is rapidly expanding, presenting exciting opportunities and ushering in a new era of innovation that extends well beyond this sector into the broader economy. The space economy encompasses all activities related to space exploration, satellite technologies, space-based services, and commercial space ventures. It encompasses both public and private entities, ranging from government space agencies to aerospace corporations and startups. The space economy is driven by a multitude of sectors, including telecommunications, earth observation, navigation and timing systems, space tourism, research and development, and more.

Many describe these times as a ‘space renaissance’. A period that has coincided with the capture, collection, and sharing of data via space technology, including satellites, with the digital transformation of industries. Yet, this existential transformation creates new vulnerabilities that can be exploited, or mismanaged, creating a number of risks.

1. Cybersecurity Threats

As our dependence on space-based services grows, so does the risk of cyber-attacks. Satellites, ground stations, and space-based networks are vulnerable to hacking attempts, data breaches, and system manipulations, which can have major implication for any sector that relies on these technologies. Cybersecurity measures, including robust encryption, regular system updates, and threat monitoring, are essential to safeguard sensitive information, maintain operational integrity, and protect against potential disruptions. For example, a successful cyberattack against a satellite could have significant consequences. Blocking communications with the satellite could shut off vital communications and services for millions of people.

2. Space Debris and Collision Risks

One of the primary concerns for the space economy is the proliferation of space debris, seen only this week on a beach in Western Australia. Thousands of defunct satellites spent rocket stages, and fragments pose a significant collision risk to active satellites and spacecraft. The number of satellites in orbit is expected to increase from 9,000 in 2023 to over 60,000 by 2030. In addition to the increase in satellites is the ever-increasing space debris, estimated at 100 trillion untracked pieces circling the planet. Implementing measures such as active debris removal, responsible satellite design, and collision avoidance systems are crucial to mitigate this risk.

3. Regulatory and Legal Challenges

The space economy operates within a complex regulatory framework, which can pose challenges for emerging commercial players. Issues such as licensing, spectrum allocation, intellectual property rights, liability, and space traffic management require careful consideration and harmonisation of international regulations. Navigating these legal and regulatory hurdles is vital to ensure fair competition, protect investments, and foster industry growth. Neither space policy nor cybersecurity policy is prepared for the challenges created by the meshing of space and cyberspace, which could increase national security risks. Coordinated international action by government and industry is needed now to strengthen these frameworks.

4. Funding and Financial Risk

The Space Foundation’s The Space Report 2022 estimates that the space economy was worth US470 billion in 2021, with the USA and China as undisputed leaders. It has opened opportunities across private and startup communities and kickstarted new national programs like the Australian Space Agency.

Yet, the space industry requires significant new investment in research, development, and infrastructure. Uncertainty in funding sources and market demand can pose financial risks for both established companies and startups. Government budget fluctuations, changes in public policy, and market dynamics can impact investment decisions and project viability. Diversifying funding sources, strategic partnerships and prudent financial planning are essential to mitigate these risks.

5. International Collaboration and Geopolitical Risks

Space exploration and satellite operations often involve international collaboration. Geopolitical tensions and conflicts can impact these cooperative efforts and disrupt the space economy. Political disputes, export control regulations, and restricted access to space-based services can hamper international cooperation and limit market opportunities. Strengthening international partnerships, fostering diplomatic engagement, and promoting dialogue are crucial to minimising geopolitical risks.

While the space economy holds tremendous promise, it is not immune to risks and challenges. These can have significant flow-on effects on the broader economy if not managed well. Proactively addressing these risks is vital to ensuring the long-term sustainability and success of the industry. Collaboration between governments, private companies, and international organisations is crucial to developing robust frameworks, technologies, and regulations that promote responsible and secure space activities. By effectively managing these risks, we can navigate the evolving space economy and unlock its full potential for scientific discovery, economic growth, and societal benefits.