The Earth Observation market: a recap of the first ESA Earth Observation Commercialisation Forum

A few reflections after attending the @europeanspaceagency's first Earth Observation commercialisation forum (which by the way was fully booked - Well done!)

First we need to consider that, even if the worldwide data and services market has increased by 8% of the past 5 years to a value of almost $2B last year, the EO commercial sector remains a niche, emerging and somehow risky market. But there is a more positive note: the EO market is growing faster than the overall space economy: the upstream industry sector has grown by almost 50% in the past 10 years and represents $1.5B today. The downstream market is growing much faster and, in Europe, this is driven by startups and SMEs which now make up 85% of the EO downstream ecosystem in Europe.

So what’s our role as Institution in all of this?

We don’t have one, but THREE roles at the same time.

First of course, we are customers. The European Space Agency buys data for two main purposes: science and R&D and for public users need. Our Third Party Missions Programme comprises now over 50 missions with data sourced from more than 60 instruments which is supplied to users for research and development purposes.

For public users need we use the Copernicus Contributing Missions with and for the European Commission: the primary users of the Contributing Missions activity are the six Copernicus services - mainly the Land, Emergency, Security and Marine services, while other users, such as EU Public Authorities, are secondary users (currently over 3000 registered users). 

Commercial companies are playing an important part in both programmes as demonstrated by these recent success stories from Third Party Missions https://earth.esa.int/eogateway/news/third-party-mission-success-stories) and by the fact that this year 9 European emerging companies have joined Copernicus as Contributing Missions. The aim of bringing emerging European New Space companies into the programme is to help keep Copernicus ahead of the game in the rapidly changing sector of observing Earth from space. This reflects our internal policy: we made a decision to support European companies and, among those, the emerging ones.

I'd like to stress that buying EO data has two main benefits: it allows ESA to assess the quality of commercial EO data and it's a way to support and boost the market thanks to our well known branding and reliability as customer.

At the same time we are also partners to entrepreneurs, SME and large companies.

Through our Investing  in Industrial Innovation (InCubed) programme, a kind of private public partnership, we help the #EO industry to develop highly innovative and commercially successful Earth Observation based products with rapid co-funding to help reduce the financial and development risk of companies entering in  the market.

InCubed is supporting already 100s of companies and several of them are already generating revenue with the product developed with InCubed help.  We have under development about 10 new satellite constellations, 5 of them has been awarded a Copernicus Contributing Missions  contract

Recently the MANTIS mission (Mission and Agile Nanosatellite for Terrestrial Imagery Services), the first InCubed-supported satellite, secured a launch ride. MANTIS aims is to deliver  high resolution images particularly suitable for energy and mining applications.

Lastly, we are of course, enablers: , thanks to ESA #FutureEO, which is a 400M€/year ESA optional programme. The goal is to support EO applications at an early stage and turn concepts into implementable missions to then develop only the most promising ones. 

Of course, there are still barriers and risks within the growing EO market that are slowing its expansion:

1. Lack of awareness of the commercial potential of EO - Unserved demand/market creation
2. Price barrier
3. Product quality and scalability
4. Customer uncertainty

At ESA we are actively working to overcome those barriers. How?

To be competitive in a fast-changing market, we need a fast changing mechanism. We have two ways to address this: fostering innovative product/services and their uptake as unique competitive advantage to penetrate foreign markets (e.g. Φ-lab disruptive innovation, FutureEO, Scouts, Industrial Competitiveness and InCubed) and reducing development, financing and go to market risks (e.g. InCubed, Copernicus Contributing Missions and ScaleUP). Another important point is the question of demand: beyond technological development and private investment, focusing on demand is critical to the EO sector in Europe. Our role as customers is critical in this: by buying data from emerging ad established commercial EO companies we give them our "stamp of approval", guarantee high standards and thus boost the market. There is still so much untapped potential in commercial and public EO, our role as the  European Space Agency is to facilitate the work of companies so this potential becomes a concrete opportunity to expand Europe role in Earth Observation and become a competitive player in the worldwide market.