Global Space Defense and Security investment set to continue major growth trend over coming decade

• Launch rates for defense and dual-use satellites are expected to see a significant surge over the next 10 years as countries ramp up spending in response to geopolitical concerns.

Washington D.C. 08 April 2024. Novaspace, a merger between Euroconsult and SpaceTec Partners, the leading space consulting and market intelligence firm, is forecasting that the worldwide launch rate for defense and dual-use satellites will jump by 160% over the coming decade.

Novaspace estimates that worldwide government expenditures in space defense and security reached over $58 billion, a historic high. Government expenditures are driven by an increasingly fragmented geopolitical context, the growing rivalry between the US, China and Russia, as well as the growing integration of space-based services in conventional military forces on land, air and sea.

The new data is part of Novaspace’s Space Defense and Security report (1st edition), an in-depth analysis of current and emerging space defense trends, dynamics and demand drivers, which offers vital insights into the space defense and security landscape, and showcases the significant contributions of leading nations.

Four countries emerged as frontrunners in 2023, each with investments exceeding $1 billion. The United States led with $38.9 billion, followed by China with $8.8 billion, Russia with $2.6 billion, and France at $1.3 billion. Japan, the United Kingdom, the European Union and Germany also made substantial investments, each surpassing $500 million.

Of the $58 billion allocated in total by governments, an estimated $40 billion was contracted to industry for the provision of crucial space defense and security capabilities. These include the manufacturing and launch of government satellites, the provision of user terminals, commercial operation of government systems, and delivery of commercial space defense and security products, data, and services to defense organizations.

OVERVIEW OF THE SPACE DEFENSE AND SECURITY LANDSCAPE  

A majority of funding is for the manufacture of government systems as countries seek to maintain control over proprietary systems for sovereignty reasons, while the acquisition of commercial data to augment or complement government-owned systems is identified as a growing trend, particularly in the United States. Procurement of services remains more limited as most defense organizations carry out data analytics in-house, though this is also showing early signs of change.

The report highlights industry revenues across four value chain segments totaling $40.2 billion. These include the manufacture and launch of defense and dual-use satellites ($24 billion), provision of user terminals ($3.3 billion), operation of government systems and sale of data ($10.2 billion), and provision of managed and value-added services ($2.7 billion).

In 2023, some 107 defense and dual-use satellites were launched by 17 governments, a 40% increase from the previous year. The US logged 44 launches, followed by China (30) and Russia (11). Other countries combined launched a total of 22 defense and dual-use satellites. The top capability domains were Intelligence, Surveillance and Reconnaissance, (29), Secured Satellite Communications (24), Signal Intelligence (23), and Technology Demonstrators (16).

Novaspace’s report forecasts an on-going and substantial increase in the number of new defense satellites over the next decade, with over 2,600 launches projected, an increase primarily driven by the need for system architectures to enhance the resilience of space-based services and, to a lesser extent, by the growing number of countries investing in space defense and security.

“An increasingly fragmented global geopolitical context is a major driver of space defense and security expenditures,” said Principal Advisor Simon Seminari, editor of the report. “This is marked by high-intensity conflicts in Ukraine and the Middle East as well as contained tensions in the South China Sea, the Pacific, the Indian subcontinent, and Africa. “As space becomes more contested, congested and competitive, countries worldwide are bolstering their defense readiness. Space is integral to modern warfare, with militaries relying on space-based capabilities for battlefield awareness, navigation in low visibility conditions, and secured connectivity in hostile environments,” he added.