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New Zealand and ISS
New Zealand’s Cook Strait viewed from the International Space Station. (credit: NASA)

Is the New Zealand commercial space success story a model for other countries?

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These remotely located group of islands in the South Pacific with a population of just five million people has a tradition of punching above its weight. New Zealand is a primary industries powerhouse; probably hosts the best known and successful rugby team on Earth, the All Blacks; and is seen internationally as a champion in the fight against COVID-19. The space sector is emerging as another such area—ironic, considering that locals refer themselves as kiwis, the name of a local flightless bird!

The New Zealand space sector model is in fact quite unique because it’s mostly based on commercial space. It is NewSpace-driven, characterised by a mix of start-up and well-established, small and large, entrepreneur-driven and privately-funded space companies that service both government and non-government customers. NewSpace is in contrast to traditional space economies where large-scale government activity has been a major driver, like the United States or Russia. This model draws on local as well as international talent, and has strong connections with the global space sector. It has also been so successful that it has drawn attention from other spacefaring nations aiming to join the most competitive race in the 21st century.

The New Zealand space sector model is in fact quite unique because it’s mostly based on commercial space.

Rocket Lab, with its small launch vehicles powered by 3D-printed engines, and its aim to launch a private mission to Venus by 2023, might just be New Zealand’s best-known space company, but it has been joined by many others. Dawn Aerospace and Fabrum Solutions are among the other New Zealand-registered companies operating overseas. The country doesn’t just manufacture rockets, though: it also uses space-derived data for innovative applications and fosters research expertise on space all around the country. According to a 2019 Deloitte report on New Zealand’s space sector, the economic contribution of the space sector to New Zealand was NZ$1.69 billion (approximately US$1.1 billion.) This sector directly supports an estimated 5,000 full-time equivalent roles (FTEs). Total employment, including indirect effects, is 12,000 FTE jobs: impressive numbers for a small nation.

According to the 2019 OECD report on the space economy, New Zealand’s location provides access to some of the largest numbers of launch azimuths in the world. Even though New Zealand is located far away from the Equator, its location in Oceania offers a series of advantages. Apart from the low levels of air traffic, the country enjoys low light pollution, a wide choice of launch angles, low population density, and is in a geopolitical region with limited political tensions, especially when compared with the neighboring North Pacific region, where China and the United States are fighting for global hegemony. But these advantages are not unique to New Zealand. In fact, many other South Pacific nations also enjoy such geographical advantages.

The South Pacific region is quite an active area of our planet when it comes to space-related activities. Recently, Australia’s space economy has crossed the AUS$5 billion (approximately US$3.51 billion) revenue mark. Indian Prime Minister Narendra Modi acknowledged back in 2014 the role played by Fiji in the success of India’s first Mars mission and offered to make it the hub for regional collaboration in space. French territories in the Polynesia have been used for satellite tracking, not just by France but also the US and even Ukraine. Last but not least, the European Southern Observatory (ESO), a 16-nation intergovernmental research organization for ground-based astronomy, has its state-of-the-art observatories located in northern Chile.

Could other small nations inside and outside the Pacific follow New Zealand’s successful path? Let’s have a look at the other ingredients that make the New Zealand space economy a success.

New Zealand means business

New Zealand’s economy was doing well before COVID-19 and has not fared as badly as others during the pandemic, especially when comparing it with other Western liberal democracies. Why? Some impressive achievements in the economic and political field might give us some clues.

New Zealand is the easiest country to do business in the world according to the latest World Bank ranking. Impressively, the country has held that position since 2015. You just need one procedure to open a business and it takes half a day. New Zealand also ties for first place in the World Bank’s strength of legal rights index. On the other hand, even at its peak of around 56%, New Zealand’s net debt is considerably lower than other economies around the world. Many of the most advanced economies went into COVID-19 with national debt averaging about 80% of GDP.

No less important is political stability and the amount of political corruption. New Zealand is ranked the least corrupt nation out of 180 countries, according to the 2019 Corruption Perceptions Index reported by Transparency International.

New Zealand is seen as a reliable partner in the space sector by several nations.

Another factor is the New Zealand Space Agency itself. It was founded in April 2016 (almost two years before its neighbor Australia) under the country’s Ministry of Business, Innovation and Employment. The aim of the agency is to specifically promote the development of a space industry in New Zealand and to reap its economic benefits. The government also established a space agency to regulate the country’s growing commercial space industry, and specifically to allow space launches by Rocket Lab. Business ventures are the core of the New Zealand Space Agency.

New Zealand has many friends

Other nations in the region could follow New Zealand’s path with political reforms and the perseverance to apply them. But there is something else that New Zealand adds to the table, and that is its foreign policy assets. New Zealand is a member of Five Eyes, a very powerful and selective intelligence network that also includes the United states, the United Kingdom, Canada, and Australia.

New Zealand also has a Technology Safeguards Agreement with the United States, enabling the transfer of technology necessary to operate a New Zealand-based launch industry. In fact, it allowed Rocket Lab to launch satellites and carry payloads for the US Defense Department, including its spy agencies. On top of that, New Zealand students are doing internships at NASA’s Ames Research Center in Silicon Valley, with financial support from the New Zealand Space Scholarship.

Still, many countries see New Zealand as the most approachable member of the Five Eyes network. According to the 2019 Deloitte report on New Zealand Space Sector, the country’s space-related companies have partnerships with several other countries like Japan, Germany, and France, as well as the European Space agency. New Zealand is seen as a reliable partner in the space sector by several nations.

Not everything is good news. As in many other countries space related activities are seen with interest but as unnecessary by a large part of the public. The COVID-19 pandemic and the enormous economic impact that is having worldwide is reshaping government priorities everywhere. It is a challenge for the global space sector to show the benefits that investment in this sector can bring to the majority of the population during these troubled times, from job creation to providing tools for the fight against climate change.

There are some concerns in New Zealand about the ecological impact that the industry might have but also that new technologies related to the space sector could be weaponized. Rocket Lab launches of US intelligence gathering satellites early this year were not welcomed by all New Zealanders. The New Zealand Green Party said it was “concerned” about the launch, especially as tensions with Iran rise, and the former director of New Zealand’s center for peace and conflict studies, Prof. Kevin Clements, declared to the British newspaper The Guardian he was “alarmed” as New Zealand has no real control over what the US intelligence satellite reconnaissance were used for.

“While these rocket launches are not delivering weapons into space they are playing an absolutely critical role in enhancing the surveillance and intelligence systems for space-based nuclear warfare,” he added, “they make us complicit in Donald Trump’s desire for a ‘military space force’. I think they challenge the spirit of our anti-nuclear legislation and tie us ever closer into our alliance with the United States.”

Can this unique combination of factors be replicated?

As outlined above, New Zealand’s commercial space model success is a result of geographical, economic, and political factors. The geographical factors are shared with other island nations, but only partially. New Zealand is isolated enough and small enough to rest in a peaceful place and be under the radar when it comes to geopolitical turmoil. But at the same time, it is big enough to have open spaces for hangars for rockets, satellite control infrastructure, and to create a strong enough local economy able to be connected economically and politically at a global level. It is also well-connected enough to attract local and international talent. With an area of 268,021 square kilometers, New Zealand its bigger than the United Kingdom but smaller than Japan.

What can other small nations imitate from the New Zealand commercial space model? Focus on your own strengths and play them well.

The right economic framework to attract local and foreign investment can be reached through political reform and a persistent will to implement it. Still, that takes time, even generations. New Zealand doesn’t just perform well; in some international rankings it has been the undisputed champion for years.

Maybe the most difficult part to imitate could be New Zealand’s diplomatic assets. Even though New Zealand belongs to a mighty intelligence network, Five Eyes, it is seen also as a peaceful and amicable nation. It is well connected not just with countries in Oceania and Asia but also in America and Europe. This seemingly contradictory combination, especially in the super-competitive space sector, is extremely beneficial to business but very difficult to replicate. We are living in times of geopolitical change and international actors are trying to get into better positions on the chess board.

What can other small nations imitate from the New Zealand commercial space model, then? Focus on your own strengths and play them well.

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