The Space Reviewin association with SpaceNews

Boeing 702
Can a multinational organization chart a successful course for the commercial space industry? (credit: Boeing)

Can the OECD figure out commercial space?

There has been no shortage of discussion and debate about the current downturn in the commercial space industry worldwide. The causes of the downturn are fairly well understood: overcapacity among existing communications satellites, the initial failure of ventures like Iridium and Globalstar, and a corresponding lack of demand for launch services that have driven some companies out of the market altogether and forced the rest to seek government support in one fashion or another to remain active. Those issues, coupled with a lack of additional markets requiring satellite and launch services, have put space companies in the US, Europe, and elsewhere in the doldrums for the last few years.

What is less certain, though, is what is needed to revive the industry and get it growing again. Some believe that additional military and other government spending will create a rising tide that will eventually lift the grounded boats of commercial space. Others argue that the creation and nurturing of entirely new markets, like public space travel, are needed for commercial space to rebound. There is no consensus on the general direction, let alone specific programs, required for commercial space to prosper, although there has certainly been no shortage of opinion.

The latest organization to add its voice to the debate—or cacophony—about the future of commercial space is the Organization for Economic Cooperation and Development (OECD). The Paris-based OECD consists of representatives of 30 nations in North America, Europe, and the Asia Pacific regions that focus on a wide range of economic and social issues. In 1990 the OECD established the International Futures Program (IFP) to “identify and explore new, emerging policy issues.” These topics have ranged from the risks faced by 21st century society to the entertainment industry to the future of money.

There is no consensus on the general direction, let alone specific programs, required for commercial space to prosper, although there has certainly been no shortage of opinion.

Last year the IFP took on a new issue: space commercialization. “The Commercialization of Space and the Development of Space Infrastructure: The Role of Public and Private Actors” officially kicked off last September with an exploratory meeting at OECD’s Paris office, although informal consultations had started a year before the kickoff meeting. Pierre-Alain Schieb, one of the leaders of the IFP’s space commercialization effort, discussed the status and future plans for the project before a small group at the OECD’s Washington, DC office in early August.

Five-phase process

There are several reasons why the OECD embarked on this study, Schieb explained. There is a growing strategic interest in space, and space-based industries have the potential for providing considerable economic, social, and environmental benefits. However, the current depressed state of the commercial market has created uncertainties in the public and private sectors about the role commercial space can play, he said. The OECD thus believes the time is right to conduct, in his words, a “broad-based forward-looking policy-oriented review of future commercial developments in the sector.”

The project will be carried out in five phases. The first phase, where the project is currently, is a review of the current state of the commercial space industry and its prospects for its future. The project will then select a number of promising applications, the subject them to a review of their business models. A fourth phase will look at legal and regulatory issues, concluding with general conclusions and recommendations in its final report.

Schieb said the project is casting a wide net when considering promising commercial space applications, in part because the project has a 30-year horizon. The project is looking at extensions of existing space applications, such as telecommunications, navigation, and earth applications. They are also considering new markets, including telemedicine, tele-education, microgravity research and manufacturing, space solar power, and space tourism. Schieb said the group is considering both orbital and suborbital applications, and even those commercial markets beyond Earth orbit. The project plans to narrow that list to ones that they believe are the most promising during a meeting scheduled for October 17 in Paris.

The OECD is considering a wide range of current and future commercial space markets in its analysis.

Once the group selects those applications, Schieb said they will look at both the standard considerations inherent in any business model—the number of customers, the costs of the business, and the potential for profit—as well as other considerations specific to space and other high-technology ventures. Those additional considerations include whether the technology and the market will materialize as expected, as well as how these space-based applications will be able to compete with any terrestrial alternatives. The degree of government support required and available for these applications will also be evaluated.

Beyond business models, the OECD will look at what Schieb calls “improving framework conditions.” These framework conditions include improvements in national and international space policy, changes to space law and related regulations, and strengthening of international cooperation. The project plans to then take these business and policy issues and issue a set of recommendations for action as part of its final report.

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