STUDY ON AUSTRALIAN SPACE CAPABILITIES AND · PDF fileearth observation, ... future industry opportunities the Department of Industry, ... ASIA PACIFIC AEROSPACE CONSULTANTS Pty Ltd,

STUDY ON AUSTRALIAN SPACE CAPABILITIES AND GLOBAL SUPPLY CHAINS

ASIA PACIFIC AEROSPACE CONSULTANTS Pty Ltd, 2015 Page 2 of 111

CONTENTS

1 Executive Summary ..................................................................................... 7

Background and Context of Study .......................................................................................................... 7

The Changing Global Space Economy ..................................................................................................... 7

Scope of Study ........................................................................................................................................ 9

Methodology ........................................................................................................................................... 9

Space Capability of Companies Interviewed ........................................................................................... 9

Character of Business Type of Companies Interviewed ....................................................................... 10

Industry Sectors Served by Australian Space Capabilities .................................................................... 11

Revenue Generated by Australian Space Activities .............................................................................. 11

Workforce Size Involved in Australian Space Activities ........................................................................ 11

Staff Demographics of Workforce Involved in Australian Space Activities .......................................... 11

Business Trends Identified By Companies Interviewed ........................................................................ 12

Current Australian Space Capabilities ................................................................................................... 12

Domestic and International Supply Chains ........................................................................................... 15

Supply Chain Opportunities for Australia ............................................................................................. 15

Regional Markets .......................................................................................................................... 16

New Space Markets ...................................................................................................................... 16

Key Issues for Australian Participation in Global Supply Chains ................................................... 16

Growth Opportunities in Space Applications Markets ......................................................................... 17

Conclusion ............................................................................................................................................. 18

2 Background and Context of Study ............................................................. 19

3 The Changing Global Space Economy ........................................................ 20

3.1 The Changing Face of Global Space Activity ................................................................................... 21

3.2 Evolutionary Phases of Global Space Activity ................................................................................. 21

3.3 The Growing Global Space Economy .............................................................................................. 22

3.4 The Changing Nature of Space Activity ........................................................................................... 23

3.5 The ‘New Space’ Era ........................................................................................................................ 27

4 Selective Review of Australian Companies Involved in Space .................... 29

4.1 Scope of Study................................................................................................................................. 30

4.2 Methodology ................................................................................................................................... 30

4.3 Overview of Companies Interviewed .............................................................................................. 32

4.3.1 Geographic Dispersion of Companies Interviewed .............................................................. 32

4.3.2 Categories of Space Capability of Companies Interviewed ................................................. 32

4.3.3 Character of Business Type of Companies Interviewed....................................................... 36

A SELECTIVE REVIEW OF AUSTRALIAN SPACE CAPABILITIES


4.4 Industry Sectors Served by Australian Space Capabilities .............................................................. 38

4.5 Revenue Generated by Australian Space Activities ........................................................................ 40

4.5.1 Overall Revenue Generated by Australian Space Activities ................................................. 40

4.5.2 Export Revenue Generated From Australian Space Activities ............................................. 41

4.6 Workforce Size Involved in Australian Space Activities .................................................................. 42

4.7 Staff Demographics of Workforce Involved in Australian Space Activities .................................... 43

4.8 Business Trends Identified By Companies Interviewed .................................................................. 48

5 An Overview of Current Australian Space Capabilities ............................... 55

5.1 Defining Space Capabilities ............................................................................................................. 56

5.2 Classification of Space Capabilities ................................................................................................. 56

5.3 The Breadth of Australian Companies’ Space Capabilities ............................................................. 59

5.3.1 Overview of Australian Company’s Space Capabilities ........................................................ 59

6 Domestic and International Supply Chains ................................................ 79

6.1 Background and Definition of Supply Chains .................................................................................. 80

6.2 Where Australian Space Capabilities Map on Global Supply Chains .............................................. 80

6.2.1 Satellite Communications .................................................................................................... 80

6.2.2 Earth Observation ................................................................................................................ 82

6.2.3 Satellite Position Navigation and Timing ............................................................................. 85

7 Supply Chain Opportunities for Australia .................................................. 88

7.1 Opportunities for Australian Companies by Supply Chain Segment .............................................. 89

7.1.1 Supply Chain Opportunities in Satellite Ownership and Operations ................................... 89

7.1.2 Supply Chain Opportunities in the Space Systems Segment ............................................... 89

7.1.3 Supply Chain Opportunities in Launch Systems ................................................................... 90

7.1.4 Supply Chain Opportunities in the Ground Systems Segment ............................................ 91

7.1.5 Supply Chain Opportunities in Space Enabled Services and Applications ........................... 92

7.2 Regional Markets ............................................................................................................................ 99

7.3 New Space Markets ........................................................................................................................ 99

7.4 Key Issues for Australian Participation in Global Supply Chains ................................................... 102

8 Growth Opportunities in Space Applications for Domestic and International Markets ..................................................................................................... 105

8.1 Key Growth Markets in Space Applications .................................................................................. 106

8.1.1 Satellite Communications .................................................................................................. 106

8.1.2 Earth Observation .............................................................................................................. 107

8.1.3 Position Navigation & Timing ............................................................................................. 107

9.0 Conclusion ........................................................................................... 109

Appendix A – Companies Interviewed and Their Space Capabilities ........... 111



TABLES

Table 1 Space Capabilities of the 46 Companies Interviewed for this Study........................................ 10

Table 2 Breakdown of Key Subsectors in the Commercial Space Sector .............................................. 26

Table 3 Number of Companies Interviewed by State & Territory ........................................................ 32

Table 4 Number of Companies with Space Capabilities by Segment ................................................... 33

Table 5 Companies with Space Enabled Service Capabilities by Service Domain ................................ 34

Table 6 Interviewed Companies by Business Type ............................................................................... 36

Table 7 ANZSIC Industry Segments Served by Space Capabilities of Interviewed Companies ............. 39

Table 8 Number of Staff by Employee Category ................................................................................... 43

Table 9 Level of Qualification of Staff ................................................................................................... 44

Table 10 Workforce by Age Category ................................................................................................... 46

Table 11 Distribution of Workforce by State & Territory ..................................................................... 47

Table 12 Companies Revenue Growth .................................................................................................. 48

Table 13 Companies Export Revenue Growth ...................................................................................... 49

Table 14 Companies Staff Growth ........................................................................................................ 50

Table 15 Companies Highly Skilled Staff Growth .................................................................................. 50

Table 16 Skills Shortages in Australia .................................................................................................... 51

Table 17 Reported Skills Shortages in Australia .................................................................................... 52

Table 18 Countries Supplying Space-Related Skills Staff to Australia ................................................... 53

Table 19 Categories of Space Capabilities ............................................................................................ 58

Table 20 Capabilities of Australian Companies in the Space Systems Segment ................................... 60

Table 21 Capabilities of Australian Companies in Launch Systems ...................................................... 63

Table 22 Capabilities of Australian Companies in the Ground Systems Segment ................................ 67

Table 23 Capabilities of Australian Companies in the Segment of Space Enabled Services ................. 71

Table 24 Capabilities of Australian Companies in the Space Support Services Segment ..................... 74

Table 25 Capabilities of Australian Companies in Space Research & Development ............................ 76

Table 26 Capabilities of Australian Companies in Space Education & Training .................................... 78

Table 27 Global Supply Chain for Space Services ................................................................................. 80

Table 28 Global Supply Chain for Satellite Communications ................................................................ 81

Table 29 Global Supply Chain for the Earth Observation Segment ...................................................... 84

Table 30 Global Supply Chain for Satellite Position Navigation and Timing ......................................... 86



FIGURES

Figure 1 Global Space Revenue ............................................................................................................. 22

Figure 2 Composition of Global Space Activities .................................................................................. 24

Figure 3 Composition of Commercial Space Activities ......................................................................... 25

Figure 4 Number of Companies Interviewed by State & Territory ....................................................... 32

Figure 5 Number of Companies with Space Capabilities by Segment .................................................. 33

Figure 6 Companies with Space Enabled Service Capabilities by Service Domain ............................... 34

Figure 7 Interviewed Companies by Business Type ............................................................................. 36

Figure 8 ANZSIC Industry Segments Served by Space Capabilities of Interviewed Companies ............ 38

Figure 9 Number of Staff by Employee Category ................................................................................. 43

Figure 10 Level of Qualification of Staff ................................................................................................ 44

Figure 11 Space-Related Workforce by Gender.................................................................................... 45

Figure 12 Workforce by Age Category .................................................................................................. 46

Figure 13 Distribution of Workforce by State & Territory .................................................................... 47



CASE STUDIES

Case Study 1 – Space Systems: Silanna Semiconductor ....................................................................... 62

Case Study 2 – Launch Systems: Teakle Composites ............................................................................ 64

Case Study 3 – Ground Systems: Electro Optic Systems ....................................................................... 68

Case Study 4 – Satellite Communications: Skybridge ........................................................................... 93

Case Study 5 – Earth Observation: Tidetech ......................................................................................... 95

Case Study 6 – Position Navigation and Timing: Pod Trackers ............................................................. 98

Case Study 7 – New Space: Saber Astronautics .................................................................................. 100



1 Executive Summary

Background and Context of Study

Since the early days of the space age Australia has been an active participant in space activities. Australia’s geography and demographics define it as a country particularly well suited to the utilisation of space based technologies and consequently Australian companies and institutions are active across all three primary areas of space-enabled services, namely satellite communications, earth observation, and positioning, navigation and timing (PNT).

In recent years the Australian Government has recognised that space-related technologies are critical to the operation and ongoing productivity of a wide range of Australian industries and the broader fabric of Australian society. The Australian space sector encompasses diverse functions incorporating both services and production however, few Australian organisations have space-related activities as their dominant output. Therefore, statistics that are based on dominant outputs do not fully capture space activities as an industry.

In order to better understand the current capabilities of Australia’s commercial space industry and future industry opportunities the Department of Industry, Innovation and Science (the Department) engaged Asia Pacific Aerospace Consultants Pty. Ltd. (APAC) to perform a study of Australian space capabilities. The study was tasked to report on: Australia’s industry capability in commercial space; domestic and global supply chain opportunities in commercial space; growth opportunities in space applications for domestic and international markets; and case studies of Australian companies that have found success in commercial space activities.

The Changing Global Space Economy

When most Australians hear the words “space” or “space industry” or “space economy” it is usually the big Government space projects that first come to mind – the International Space Station (ISS), the Hubble Space Telescope, the NASA rovers on Mars, the New Horizons flyby of Pluto and the Rosetta Mission landing on a comet. However, this natural and understandable association of “space” with these big government missions actually masks a transformation that has taken place in the space industry over the last 50 years. Few people realise that these big government space projects are no longer the primary space activities. Government space projects are now dwarfed by the commercial activity taking place in the space industry. The inflection point took place around 15 years ago. Since then the quiet evolution of the commercial space industry has turned into a revolution with massive commercial growth that today is transforming the industry and has significant ramifications for Australia.

The process of opening new domains to industrial development typically goes through three distinct phases – the Exploration Phase, the Experimentation Phase and the Exploitation Phase1. The Exploration Phase is as described – a journey into the unknown. This phase is characterised by the high risks of addressing the unknown accompanied by high costs associated with attempting to access the new domain often with unproven technology. This phase is typically the realm of Governments which can accept the high costs and risks in the pursuit of national interests. The Experimentation Phase builds on the successes of the Exploration Phase. It is usually driven by the goals of understanding the new domain and learning to operate in the new environment including the development and perfection of new equipment. Activities in this phase are also generally led by

1 The authors wish to recognise Ms Doris Hamill for her introduction of these concepts in her paper

“Transitioning to the Commercial Exploitation of Space”, UNISPACE III, 27 July 1999.



Governments. The Exploitation Phase marks a major shift in the business paradigm for the new domain. At this point the technology and science of the new domain is generally well understood and there is a demonstrated value of operating in the new medium. Often unique products and services are possible. At this point industry takes over and begins to invest. In 1998 commercially derived space revenue equaled revenue from direct government expenditure in space. Since then space has well and truly entered the Exploitation Phase and the changes are dramatic.

According to the 2015 ’Space Report’, produced annually by The Space Foundation in the US, the global space economy, consisting of launch and ground services, satellite manufacturing and operations, satellite television and communications, government exploration, military spending, and other interests grew by 9% in 2014 reaching a total worldwide revenue of USD $330 billion. Since 1998 commercial space revenues have dramatically outpaced revenue from direct government space expenditure. Commercial space activities grew by 9.7% in 2014 and now constitute 76% of the global space economy. Commercial space revenues have achieved a compound annual growth rate over 15 years of 13.7% - which exceeds the compound annual growth rate of 9.7% that the Chinese economy sustained over the same time period2. This is the commercial exploitation of space and it is attracting serious attention from investment and venture capital firms worldwide.

Just as it is important to recalibrate the association of space being dominated by big government funded projects to reflect the modern commercial activities that drive the space economy today it is also important to recalibrate the common association that space is only about rockets and satellites. Today commercial space products and services – the use of the space systems and data derived from space or Space Enabled Services – generates 70% of space economic activities worldwide, based on the 2015 ‘Space Report’.

It is interesting to note that the three current largest space revenue streams – Satellite Direct to Home (DTH) TV, Global Navigation Satellite Systems (GNSS) equipment and services, and Satellite DTH Broadband & Mobile equipment - did not exist 30 years ago. They represent one of the massive transformations that has been taking place in the space industry - the move to the consumer market. This trend of providing space enabled services to the mass market has been the major driver of the commercial space industry over the last 15 years as it continues to introduce new services such as satellite broadband and GNSS positioning equipment and services.

There are now literally billions of devices in use around the world that incorporate satellite PNT data as part of their functionality which places space enabled services in to the hands of small businesses and individual consumers and not just Governments and large corporations. Ubiquitous access to this type of information allows innovative use of space enabled services and applications in ways never contemplated in the past.

There is another significant trend that has been gaining traction in the space industry over the last several years - the emergence of what is often referred to as ‘New Space’. The ‘New Space’ era was ushered in by a number of billionaires primarily in the United States (US) who chose to spend their own private wealth to pursue personal space ambitions but within the context of a commercial space business. A key facet of this new era of space activity was a change in the philosophy of product development which adopts more traditional commercial acceptance of risk and moves away from the previous Government procurement approach of ‘cost-plus’ contracting that existed within the aerospace industry for decades.

Concurrent with the fundamental philosophical change associated with the ‘New Space’ era is the growing capability of small satellites. As the capability of small spacecraft has grown and the costs decreased it has allowed a dramatic increase in the number of players capable of owning their own

2 Based on World Bank Statistics



space assets. The emergence of very low cost cubesat technology has placed the potential of satellite ownership into the hands of innovative small businesses, universities and even schools and individuals. A fundamental difference associated with this new class of satellite technology is a shift away from an emphasis on long life and high reliability towards shorter product cycles, achieving lower cost by accepting lower reliability with a plan to use the cost savings to build more satellites for quick replacement of the space assets. This new facet of the industry is often referred to as ‘Space 2.0’ and as the name connotes draws the moniker from the Information Technology (IT) world and the innovators and investors who see the potential of this new paradigm of space activity.

It is against this backdrop of the dramatic growth of the global space industry with increasing demand for innovative services and with technological breakthroughs lowering the barriers to entry that this report examines the space capabilities of Australian companies and their ability to participate in this rapidly growing space economy.

Scope of Study

This study is not a comprehensive look at the Australian space scene. While the Department recognises that many sectors play a role in the Australian space landscape the purpose of this study was to understand the aspects of the purely commercial space marketplace hence the terms of reference specifically excluded government and not-for-profit space activities as well as the research and academic sectors. The focus of this study was solely on Australian corporations with space capabilities with a goal of understanding their space capabilities, the markets they serve and the potential to expand both domestically and globally. This type of information is best collected directly from the company hence the study is based on direct interviews with Australian companies involved in space.

Methodology

Based on these terms of reference the results of this study are based on direct interviews conducted by APAC with 46 Australian companies active in the space industry.

The selection of the companies to interview was a key element of this study. The creation of a target list of companies to interview was determined by several considerations:

The goal of capturing the widest range of Australian space capabilities,

The goal of including a wide geographic spread of companies,

The goal of including a diverse range of businesses – small, medium and large as well as multinationals with operations in Australia,

At the specific request of the Department the goal of including businesses that represent some of the new applications and innovations in space.

The final aspect was timing and availability – the ability of companies to meet and complete the face-to-face interview process with APAC.

Space Capability of Companies Interviewed

APAC interviewed companies with space capabilities headquartered in every state and territory

except the Northern Territory that collectively had staff in every state and territory. The data shows

that Australian companies have space capabilities in all the seven major space segments targeted for



this study and across all three service domains of Satellite Communications, Earth Observation and

PNT.

Table 1 Space Capabilities of the 46 Companies Interviewed for this Study

No. of Companies with Capabilities by Segment

Space Systems

Launch Systems

Ground Systems

Space Enabled Services

Support Services

R&D Education & Training

Primary Activity 6 3 19 32 7 6 7

All Responses 15 10 38 42 23 33 14

The highest concentration of capabilities is in the Space Enabled Services segment which comprises Satellite Communications, Earth Observation and PNT. Of the 46 companies interviewed 91% had capabilities in this segment showing that Australian industry mirrors the focus on Space Enabled Services seen globally. Satellite communications is most prominent with 57% of interviewed companies having capability in this area followed by PNT where 39% of interviewed companies have capabilities and Earth Observation where 26% of interviewed companies have capabilities.

The segment of Ground Systems also stands out where 83% of the respondents have capabilities. Also of note is that 32% of the companies interviewed indicated capabilities in Space Systems and 22% cited capabilities in Launch Systems.

A telling statistic to emerge from the interviews is that 72% of companies interviewed have capabilities in Space Research and Development (R&D) and 13% consider it a primary capability for the work they do in space. From the interviews it is clear that most of the companies feel that R&D is an essential part of their business and a critical means of gaining a competitive edge and maintaining differentiation in the marketplace. The other surprising result is the prominence of Space Education & Training capabilities where 30% of the interviewed companies indicated capability and 15% cited it as a primary capability for their organisation.

An interesting feature that emerged from the interview process is that some of the companies do not see themselves as part of the space industry per se but associate themselves more with the industry they serve such as Telecommunications or Defense. This occurred most often in the Space Enabled Services segment and it highlights the difficulty in capturing useful data about the space sector. It also highlights the fact that Space Enabled Services in particular have embedded themselves into the fabric of modern society and are a key element underpinning many significant industries.

Character of Business Type of Companies Interviewed

In terms of business characteristics, the data also shows that 33% of the companies interviewed were Australian operations of multinational or overseas entities, while 50% of the companies interviewed were Small or Medium Enterprises (SME). It is clear that the Australian space industry is primarily comprised of SMEs or small to medium pockets of space capabilities within larger organisations.

It is also clear that this is a dynamic industry in terms of business activity. New companies are being formed, other companies are being bought, sold or merged. Of the 46 companies interviewed four have been founded within the last five years, 12 have been started within the last 10 years and 21,



nearly half of those interviewed, have been founded within the last 15 years since the start of the Commercial Exploitation Phase of space. There is also evidence from the interviews that North American and European companies are actively watching the Australian space SME and university sectors with a view to acquiring space intellectual property (IP) and incorporating it into their overseas operations.

Industry Sectors Served by Australian Space Capabilities

During the interview process the companies were asked to nominate the industry sectors that utilise their space products and services. The responses reveal that space-related products and services are used in every sector of the Australian economy. Defence is the major industry sector for space companies in this study as 72% of the interviewed companies have Defence as a customer. Mining is the second most important industry sector for companies in this study with 67% of respondents providing space services to the mining sector while the Federal Government was the third largest sector with 59% of interviewed companies having the Federal Government as a customer for space products and services. Agriculture, Forestry & Fishing (54%), State & Local Government (54%), Professional, Technical and Scientific Services (52%), Electricity, Gas & Water Supply (50%) and Information, Media & Telecommunications (50%) are the other industry sectors that at least half of the companies interviewed have as customers.

Revenue Generated by Australian Space Activities

The 46 companies interviewed collectively generate nearly $2 billion in annual revenues from their space products and services. This matches the upper bound of Australian space industry revenue in APAC’s 2011 study that was based on revenue from 180 organisations indicating that the Australian space industry has grown since 2011. This growth has been led by the Position, Navigation and Timing sector as well as the satellite communications sector. Based on the data from the 2011 study and the more specific information on corporate revenue gained from this study APAC estimates that the total Australian space industry is now generating revenue in the range of $3 billion - $4 billion per annum. Most of the revenue generated by the 46 companies interviewed is earned in Australia. Although 63% of the companies interviewed generate revenue from overseas this export revenue constitutes only 8% of the nearly $2 billion in total revenue from the interviewed companies.

Workforce Size Involved in Australian Space Activities

Collectively the 46 companies employ 1,314 staff in space-related jobs by headcount and 1,190 Full Time Equivalent (FTE) staff in space-related jobs. Based on the data from the 2011 study and the more specific information on companies’ staff numbers gained from this study APAC estimates that the total Australian space industry employs between 9,500 – 11,500 staff

Staff Demographics of Workforce Involved in Australian Space Activities

The 46 companies interviewed have a highly technical workforce. Nearly all companies employ engineers and scientists which comprise 42% of the total space-related workforce of these companies. Technicians comprise another 24% of the total workforce. This is a high technology



industry where often the Sales, Marketing, Business Development and Business Management staff have technical backgrounds.

The space workforce is a highly educated workforce. The data reveals that 66% of the staff in these companies have tertiary qualifications and another 23% have certificates. Nearly half of the companies have staff with PhD’s. This is clearly an industry with very high levels of staff education and qualifications.

The space-related workforce within the 46 companies is predominantly male with women comprising only 16% of the workforce. The data shows that 73% of the space-related workforce is over 30 years old and 41% of the workforce is 40 years of age or older. Only 39% of the companies have space-related employees that are younger than 30 years of age. This is an industry where experience and longevity in the industry is valued. The workforce of these companies is spread across every state and territory in Australia with New South Wales (NSW) having the largest concentration of 30%.

Business Trends Identified By Companies Interviewed

The predominant business trend and sentiment of the interviewed companies is for revenue growth. Of these companies 78% reported revenue growth during the last three years with 61% of companies reporting more than 25% growth over that timeframe. Likewise 78% of companies are predicting revenue growth next year with 91% predicting growth over the next three years. Many companies anticipate significant revenue growth with 41% expecting revenue growth greater than 25% next year and 74% expecting revenue growth of greater than 25% over the next three years.

The Export Revenue Growth figures are slightly less robust with 52% of companies reporting export revenue growth over the last three years and 54% reporting export revenue growth last year. Export growth is a focus for most companies with 61% expecting export revenue growth next year and 67% of companies anticipating revenue growth over the next three years.

Staff growth is also a trend. Nearly three quarters of the companies reported staff growth over the last three years with 59% reporting staff growth of greater than 25% over the past three years and 28% reporting staff growth of greater than 25% last year. Staff growth is widely anticipated over the next three years with 89% of the companies expecting to increase their space-related staff and half of the companies expecting to grow their staff by more than 25% over the next three years. These company views indicate strong growth prospects for the Australian space industry consistent with global trends.

Current Australian Space Capabilities

In this study APAC analysed company space capabilities in the following functional segments:

1) Space Systems 2) Launch Systems 3) Ground Systems 4) Space Enabled Services 5) Space Support Services 6) Space Research & Development 7) Space Education & Training



Each of these segments of space capability is subdivided into categories and sub-categories of capability which cover the essential elements of capability necessary to produce the main output of the segment e.g. a satellite in the case of the Space Systems segment. The segment of Space Enables Services is subdivided into the three major space service domains: Satellite Communications; Earth Observation; and PNT. This tiered approach facilitates a detailed understanding of space capabilities of the interviewed companies.

The results show that the 46 Australian companies interviewed have capabilities in all seven space capability segments; have capabilities in all categories of space capability within each segment except for Launch Services; and have capabilities in most sub-categories of space capability within the segments.

While capabilities in most space segment subcategories exist within these Australian companies they tend to be concentrated in certain niche sub-categories of capability. To understand the extent of Australian space capabilities APAC has analysed them by segment of capability

Space Systems One third of the companies interviewed reported capabilities in ‘Space Systems’. The key areas of capability are in the category of system engineering and technical support services. There is also a strong representation of companies that either own or operate satellites. Other prominent areas are capabilities in supplying space subsystems including payloads, instruments and on-board computing, and capabilities to provide electronic and optical components.

Launch Systems The segment of ‘Launch Systems’ is the area where Australia has the least representation of space capabilities with only 22% of companies reporting capability in this segment. While Australia has been a significant user of launch services it has essentially no orbital or sub-orbital launch capability of its own. While there is a range of capabilities amongst the interviewed companies including niche capabilities in small launch system design and manufacture there is very little depth of capability. Most of the capability in this segment is in the area of Launch Support Services with the greatest capability concentration in the area of launch vehicle tracking.

Ground Systems The ‘Ground Systems’ segment is one of the two key areas where Australian companies have significant capabilities. Nearly 85% of the interviewed companies have capabilities in this segment across every sub-category of capability. The greatest concentration of capability is in the category of ‘Systems Engineering and Technical Support Services’ where more than half of the interviewed companies have capability. A similarly high percentage of the companies have capabilities as a ‘Ground Segment Prime Contractor / Integrator’. Australian companies have capabilities in the entire provision of ground systems from prime contractor through the systems engineering and technical support skills necessary for this work. A significant number of companies also report capability in the category of ‘Ground Segment Subsystem & Equipment Supplier’ including manufacturing of ground subsystems and development of software for ground systems. One of the key drivers behind the high presence of capability in the ‘Ground System’ segment is the extensive use of satellite communications in Australia which is in part driven by its unique demographics and global geographic location. As a consequence nearly one quarter of the companies have capabilities as ‘Ground Station /Teleport Owner / Operator’. Another corollary of Australia’s sophisticated involvement in owning and operating satellites is the fact that Australian companies have significant capabilities in the area ‘Tracking Telemetry & Command Operations’ necessary to operate the satellites in orbit.



Space Enabled Services Space Enabled Services is the largest sector of the space industry worldwide and it is also the largest sector of the space industry within Australia. This is the other major segment where Australian companies have significant space capabilities with 91% of interviewed companies reporting capabilities in this segment across almost all subcategories.

The greatest areas of strength for Australian companies in this segment are in the provision of services and applications although there are small pockets of manufacturing and the supply of user equipment. Australia has significant capabilities in each of the three service domains of Space Enabled Services namely Satellite Communications, Earth Observation and PNT. Of the 46 companies interviewed over half had capabilities in Satellite Communications, over one quarter had capabilities in Earth Observation and approximately 40% had capabilities in PNT.

Satellite communications is the major space activity worldwide and also in Australia so it is not surprising to find considerable local capability. Like the Ground Systems segment all capabilities needed to provide satellite communications services are available among the companies interviewed for this study.

Earth Observation is another area with considerable local expertise where Australia has longstanding capability serving significant users in the mining and environment sectors. All capabilities needed to provide earth observation services are available among the companies interviewed for this study including satellite image providers based in Australia.

Satellite PNT services have been one of the key areas of major growth for the space industry over the last 15 years. Australia is one of the few countries that have access to all GNSS constellations and has developed significant GNSS capabilities across all subcategories in this area. Capabilities include Australian development centres for multinational companies providing software for major product lines of precision GNSS equipment sold globally to the mining, construction and agriculture industries; development and manufacture of equipment detecting GNSS signal interference; development of local PNT reference systems for precision agriculture and construction.

Nearly two thirds of the interviewed companies identified capabilities in ‘Technical Support Services’– the highest single capability category for ‘Space Enabled Services’. Over 40% of the companies interviewed reported capabilities as a ‘User Equipment Supplier’ and 17% of the companies have capabilities as a ‘User Equipment Manufacturer’.

Space Support Services Half the companies interviewed reported capabilities in this segment with the greatest areas of emphasis being in technical consulting and services relating to satellite communications and earth observation. Australian companies have considerable capabilities to support local space projects with technical consulting.

Space Research & Development Previous studies have shown that Australia does have significant capability in ‘Space Research & Development’ generally centred around the academic and research sectors. One of the surprising results of this study was the extent of Space R&D capability among the 46 companies interviewed where 72% of the companies reported active R&D capabilities as a key element of their commercial success. The prominent areas of capability are in engineering research in the Satcoms, EO and PNT domains.

Space Education & Training Another surprising finding of the study was that 30% of companies identified capabilities in ‘Space Education and Training’ as a commercial operation. Prominent capabilities include delivery of Professional Training Courses and Commercial Training Courses on space topics.



Domestic and International Supply Chains

The global space supply chain reaches from the owner / operator of a satellite through the companies that supply the spacecraft that flies in space, the launch service that launches it, the ground equipment that supports it, and the services that it enables. Australian space capabilities map onto these supply chains in almost all of the categories used for the key service domains of Satellite Communications, Earth Observation and Position Navigating and Timing. Australia is already participating in these supply chains at some level, either domestically or internationally. The highest concentrations of Australian capabilities for all three of these service domains are in the ‘Ground Systems’ and ‘Space Enabled Services’ segments which correspond to the areas of highest space industry activity and revenue generation in the international space industry. From this perspective Australia has capabilities concentrated in the appropriate areas to grow its participation in the global space industry internationally.

Supply Chain Opportunities for Australia

Australian space capabilities provide opportunities for Australian companies to participate in global space supply chains in all major segments and service domains.

In the ‘Space Systems’ segment the greatest potential opportunities lie in the areas of payloads, space components and space qualified testing. There are also opportunities for Australian companies in the construction, ownership and operation of small satellites.

In the ‘Launch Systems’ segment the opportunities for Australian companies lie predominantly in early tracking of satellites launched overseas and manufacture of components for small launch systems. Australian capability in tracking space debris also presents a significant opportunity for launch and satellite support given the growing problem with space debris.

The ‘Ground Systems’ segment represents both an area where Australian companies have significant capabilities and where there are real opportunities for further penetration of the global supply chain both domestically and internationally. Software and network management systems for ground stations; local suppliers for hardware in ground systems; and local suppliers for long term maintenance and support were areas identified where Australian companies fit well in the global supply chain. Experience in Australia working with large international companies then opens the door for partnering with those same companies in other countries.

The ‘Space Enabled Services’ segment is effectively the end of the overall global supply chain and is the point of interface with actual end markets and customers in each of the three primary service domains of satellite communications, earth observation, and position navigation and timing. All of the companies with satellite communications capability in Australia are involved in the supply chain for satellite communications in the domestic market and are actively expanding these opportunities in the international market. There are opportunities in working with multiple equipment suppliers and adding value by developing software and equipment to enable different equipment to operate seamlessly. Other opportunities exist in expanding overseas by partnering with telecommunications and satellite service providers and in the Machine-to-Machine (M2M) market in mining and transport for tracking of remote assets.

Australian companies already are part of the global supply chain associated with delivery of earth observation data as local capability is required to distribute and manipulate the data coming into



Australia. Developing products from earth observation imagery is one of the real growth areas of the space industry. The majority of planned and announced cubesat constellations are focused on providing earth observation imagery in new and more pervasive ways such as virtual real time imagery. Another strong growth trend in this area is the collection and presentation of earth observation imagery to the consumer market. An additional strong trend is the fusion of various sensors to create a composite picture such as a combined picture using optical and infrared sensors or hyperspectral sensors. There is a lot of growth in the new uses of earth observation imagery worldwide. Australia has significant expertise in this sector particularly in the development of products for specific industries and hence is well placed to deliver new earth observation imagery and data presentation into global supply chains.

The PNT domain is the fastest growing sector in the global space industry. Demand for increasing accuracy in precision location continues to grow in many different industries including mining, construction, agriculture and transport. Australia has significant capability in PNT particularly in GNSS software and firmware development. By partnering with the OEMs on Australian projects Australian companies have already become part of the PNT global supply chain and will continue to expand into international markets as a result.

Regional Markets

The space activities of countries in the Asia-Pacific region present unique supply chain opportunities for Australia. Many Asia Pacific countries are developing domestic satellite programs based on the growth in capability of small satellites. While these countries intend to develop domestic space capabilities most have not been able to develop a spacecraft exclusively with domestic capabilities. Inevitably some capabilities of the spacecraft and its deployment have been acquired through the global marketplace. Many people working in these national programs have received part of their space education in Australia and hence there is greater openness to Australian participation and acceptance of Australian capabilities presenting potential opportunities for Australian company involvement in regional supply chains.

New Space Markets

The ‘Space 2.0’ revolution centred on exploiting the lower cost capabilities of smaller spacecraft, whether that be cubesats, small satellites, or swarms of spacecraft is an important emerging opportunity. It is based on the rapid development of new capabilities with much lower technology thresholds leading to much lower capital costs and faster time to market. Often these ventures seek to serve completely new niche markets with very simple technology or explore new dimensions to an existing market. The ‘Space 2.0’ revolution is extremely important for the Australian space industry as it lowers the capital cost to participate and also lowers the technology threshold to a level where Australian companies can directly compete globally.

Key Issues for Australian Participation in Global Supply Chains

Australian companies do face challenges in participating in global supply chains. At a global level the space industry is a highly regulated industry due to the potential military applications of space technology. Constraints on technology transfer can be an impediment for international business and can cause issues for many companies, particularly SMEs who struggle with the costs associated with



compliance. However, they might also present opportunities for Australian companies as one multinational company observed that it was easier for their corporation to operate into Asia from Australia than from the US due to International Traffic in Arms Regulations (ITAR) restrictions on their US staff. Regulatory issues were also something singled out within the satellite communications domain. One of the key inhibitors cited in the interviews for Australian companies pursuing opportunities in international markets are difficulties in obtaining licenses to operate in overseas countries.

Given the high number of SMEs in the space industry some of the most pervasive issues were those that relate to difficulties that confront SMEs due to their limited staff size, revenue and balance sheet. It should be noted that many of the challenges confronting space industry SMEs are common to SMEs across many industry sectors. SMEs often face challenges dealing with large prime contractors with more elaborate business processes and major contract work with significant compliance requirements and costs.

Industry credibility is an important factor and Australia is generally not perceived by the companies as being active in space which creates a credibility hurdle for Australian companies trying to participate in global supply chains. Participation with major partners on space projects is one of the key methods to gain recognition by global supply chains in this industry. Companies felt that Australia is not perceived as a contributor in these ventures hence Australian companies find it harder to gain experience and credibility that is visible to prospective international partners.

In spite of these various issues and challenges this study shows that there are examples of Australian companies that are operating successfully in the global space industry.

Growth Opportunities in Space Applications Markets

In the satellite communications domain the main growth applications are based on the corporate arena and enhancing communications in the consumer markets. Key applications are associated with: the growing need for connectivity in remote locations; the ever growing demands for data; the rapidly burgeoning machine-to-machine (M2M) market; and mobility services via satellite.

In the earth observation domain new sectors are emerging such as insurance, agriculture, maritime surveillance, and environmental monitoring along with growth in the resources sector. The EO industry is growing worldwide particularly with the emergence of more consumer oriented applications including the development of systems providing near real time EO data. These readily available images are generating new applications, management tools and ways of doing business.

The mining industry, agriculture and intelligent transportation systems are some of the key existing markets for satellite derived PNT. New areas of focus are automated ports, construction and the use of autonomous vehicles. The mass market penetration of GNSS enabled devices delivers geospatial data at the consumer level enabling many new applications. One Australian example is the integration of Global Positioning Satellite (GPS) enabled tags to monitor the location of pets which has turned into a rapidly growing business with international markets. The ubiquitous availability of GPS enabled devices combined with other data sets means that a huge array of potential markets are waiting to be identified and developed by innovative companies.



Conclusion

This study has shown that Australian companies have relevant capabilities and world class skills in areas that feed into the rapidly growing global space economy. While there are certain challenges to entering the space global supply chains this study has identified a number of Australian companies that have already achieved various levels of success and that there are exciting opportunities for Australian companies in the space industry of the future.



2 Background and Context of Study

Since the early days of the space age Australia has been an active participant in space activities. Australia’s geography and demographics define it as a country particularly well suited to the utilisation of space based technologies and consequently Australian companies and institutions are active across all three primary areas of space-enabled services, namely satellite communications (Satcoms), earth observation (EO), and positioning, navigation and timing (PNT). In fact Australia was among the first nations to have international satellite communications and was one of the first countries to have its own domestic satellite. To this day Australia continues to be a contributor to and user of space systems and services.

In recent years the Australian Government has recognised that space-related technologies are critical to the operation and ongoing productivity of a wide range of Australian industries and the broader fabric of Australian society. Between 2009 and 2011 the Department of Industry, Innovation and Science (the Department) commissioned several studies to provide an evidentiary base for the formulation of a new space policy for Australia. In that context, Asia Pacific Aerospace Consultants Pty. Ltd. (APAC) was engaged to conduct studies in 2010 and again in 2011 to identify Australia’s current space activities at that time and to perform an assessment of the (then) current value of these space activities to the Australian economy and associated trends.

These reports were the first extensive investigation of Australian space activities since the early 1990’s. They identified 631 organisations involved in space activities in Australia generating collectively around $2 billion revenue per annum.

It has been recognised that the Australian space sector encompasses diverse functions incorporating both services and production. However, few Australian organisations have space-related activities as their dominant output. Therefore, statistical collections that are based on dominant outputs do not fully capture space activities as an industry.

In order to better understand the current capabilities of Australia’s commercial space industry and future industry opportunities the Department engaged APAC in 2015 to conduct this study of current Australian space capabilities with a focus on the commercial sector. The objective was to report on: Australia’s industry capability in commercial space; domestic and global supply chain opportunities in commercial space; growth opportunities in commercial space applications for domestic and international markets; and case studies of Australian companies that have found success in commercial space activities.

This report covers the findings of this study.



3 The Changing Global Space Economy

This chapter examines the evolution of the global space economy describing trends in the type of activity taking place, the size of the market in general, the major shift from Governments to commercial entities being the vastly predominant share of the global space economy; and the fact that consumer markets are now a major driver behind the growth in space activity. This chapter also examines the ‘New Space’ era, the key elements that are different about it and the implications that flow from it. It also notes the changes that arise from the increasing capability of smaller and smaller satellites.

In This Chapter: - 3.1 The Changing Face of Global Space Activity - 3.2 Evolutionary Phases of Global Space Activity - 3.3 The Growing Global Space Economy - 3.4 The Changing Nature of Space Activity - 3.5 The ‘New Space’ Era



3.1 The Changing Face of Global Space Activity

When most Australians hear the words “space” or “space industry” or “space economy” it is usually the big space projects that first come to mind – the International Space Station (ISS), the now retired Space Shuttle, the Voyager missions to the outer planets and the New Horizons spacecraft flyby of Pluto, the Hubble Space Telescope, the National Aeronautics and Space Administration (NASA) Spirit, Opportunity and Curiosity rovers on Mars, the Rosetta Mission with the landing of the Philae space probe on comet 67P/Churyumov-Gerasimenko. This association of “space” with these large government funded missions is completely understandable – these large government funded space exploration missions are incredibly challenging, push the boundaries of existing science by attempting things never done before and captivate people worldwide with their technological achievements and scientific breakthroughs. These government funded space missions first brought major attention to space with the launch of Sputnik in 1957, amplified this attention with the Space race and Moon landings in the 1960’s and 1970’s and have continued to dominate our collective consciousness of space ever since.

However, this natural and understandable association of “space” with these big government missions actually masks a quiet evolution and transformation that has been taking place in the space industry over the last 50 years. Few people realise that these big government space projects are no longer the primary space activities. Government space projects are now dwarfed by the commercial activity taking place in the space industry. The inflection point took place around 15 years ago. Since then the quiet evolution of the commercial space industry has turned into a revolution with massive commercial growth that today is transforming the industry and has significant ramifications for Australia.

3.2 Evolutionary Phases of Global Space Activity

In order to understand what is currently taking place in the space industry it is useful to recognise that this is the evolution of a new industry in a new domain. Examples of this type of evolution include the discovery and opening of the New World of the Americas and Far East in the 1500’s, the development of Aviation, Undersea Exploration and of course Space. The process of opening new domains to industrial development typically goes through three distinct phases – the Exploration Phase, the Experimentation Phase and the Exploitation Phase3. The borders between these phases are not necessarily well defined (they can often overlap and can certainly coexist) and are really more of a continuum rather than distinct boundaries. The phases are recognisable by a different paradigm and mindset which determines the drivers and rationale for business engagement.

The Exploration Phase is as described – a journey into the unknown. This phase is characterised by the high risks of addressing the unknown accompanied by high costs associated with attempting to access the new domain often with unproven technology. Given the high cost, high risk nature of this phase generally governments must take the lead in these endeavours and supply the funding for the basic infrastructure of exploration. Business is generally willing to assist by being paid to produce equipment and services in support of the mission but governments drive the agenda often driven by military, national security or national prestige considerations. This was certainly the case with space in the 1940’s, 1950’s and 1960’s.

The Experimentation Phase builds on the successes of the Exploration Phase. It is usually driven by the goals of understanding the new domain and learning to operate in the new environment

3 The authors wish to recognise Ms Doris Hamill for her introduction of these concepts in her paper

“Transitioning to the Commercial Exploitation of Space”, UNISPACE III, 27 July 1999.



including the development and perfection of new equipment. This phase is generally still characterised by high cost but with a lower risk aspect due to the achievements of the Exploration Phase. Governments typically remain the key drivers and financiers of this phase but industry, in addition to supplying the government’s needs, begins to examine and cautiously pursue ideas for commercial exploitation. This was the case with the space industry in the 1970’s, 1980’s, and 1990’s.

The Exploitation Phase marks a major shift in the business paradigm for the new domain. At this point the technology and science of the new domain is generally well understood and there is a demonstrated value of operating in the new medium. Often unique products and services are possible. At this point industry takes over and begins to invest. The costs might remain high but industry perceives that it can produce a superior commercial return that is worth the investment. Industry leverages off existing government infrastructure or begins to build its own. At this stage it is market forces that become the dominant factor. This is an industry in a new domain that is reaching maturity and often explosive growth is possible. This is the state of the space industry today. Space has well and truly entered the Exploitation Phase and the changes are dramatic.

3.3 The Growing Global Space Economy

Figure 1 illustrates the explosive revenue growth of the global space industry in recent years. The chart is based on three discrete data points of total space industry revenue in 1973, 1998 and 2013. The use of only three data points creates straight lines hence is not a true reflection of the common fluctuations that total revenue numbers tend to have, however these provide a very graphic representation of the space industry revenues through the Experimentation Phase and the Exploitation Phase and the dramatic effect that occurs once an industry reaches the Exploitation Phase.

Figure 1 Global Space Revenue



1973 is a good approximation for the start of the Experimental Phase of space. Apollo 17, the last moon landing, had completed its mission in December 1972 and the Apollo program was winding down. The Soviets and the US were moving to the phase of space stations in Low Earth Orbit (Salyut 1 and Skylab) with the objective of learning how to live and work in space. At the same time the initial traces of the exploitation of space began to appear. Telesat Canada launched the first domestic telecommunications satellite in 1972 followed in 1974 by Western Union and AT&T in the US and then Palapa in Indonesia in 1976 (Australia became the 7th nation to launch a domestic satellite with Aussat-A1 in 1985). According to Euroconsult, the leading European space consulting firm, the global space revenue in 1973 was USD $15 billion. Of this revenue, 80% was derived from direct government expenditure on space.

3.4 The Changing Nature of Space Activity

1998 marks a watershed year for the space industry. According to Euroconsult 1998 is the first time that commercially derived space revenue equalled revenue from direct government expenditure in space. This marks the end of the Experimentation Phase and the start of the Exploitation Phase. At this point global space revenues reached USD $68.8 billion. In the 25 years since 1973 global space revenue had grown at a compound annual growth rate of 6.3% - a very healthy growth rate.

Figure 1 clearly shows the massive growth in space revenue that has occurred since the space industry entered the Exploitation Phase. In the 15 years since 1998 global space industry revenues have grown from USD $68.8 billion in 1998 to USD $314 billion in 2013 according to the 2014 “Space Report”, produced annually by The Space Foundation in the US. This represents a compound annual growth rate of 10.7%. But the bulk of this growth has come from the commercial sector. Figure 1 illustrates the dramatic growth in commercial space revenue over the last 15 years compared to the much more modest growth in government expenditure. Commercial space revenue has grown from a position in 1973 when it constituted only 20% of global space revenue to a position in 2013 where it accounts for 75% of global space revenue despite the fact that government spending has continued to increase. Since 1998 commercial space revenue has grown from USD $34.4 to USD $235 in 2013. This represents a compound annual growth rate over 15 years of 13.7% - which exceeds the compound annual growth rate of 9.7% that the Chinese economy sustained over the same time period4. This is what the commercial exploitation of space looks like and it is attracting the serious attention of Wall Street and the venture capital firms in Silicon Valley who are now actively looking at the space sector as a hot new market with lots of upside.

The latest figures show a continuation of this trend. The 2015 edition of “The Space Report”, , reports that the global space economy, consisting of launch and ground services, satellite manufacturing, satellite television and communications, government exploration, military spending, and other interests grew by 9% in 2014 reaching a total worldwide revenue of USD $330 billion. Commercial space activities continue their trend of outpacing government activities in space. Revenue from commercial space activities grew by 9.7% in 2014 and now constitutes 76% of the global space economy. Revenue from Government space activities continue to play an important role and grew at a very respectable rate of 7.3% in 2014 but they now constitute less than a quarter of global space revenue. The transition to the Exploitation Phase is evident with commercial activities based on market conditions now the dominant features of the space economy.

Figure 2 illustrates the predominance of the commercial space sector by showing the breakdown of the global space market into its three principle categories: Military space activities, Civil space activities (defined by the industry as non-military Government activities – generally agencies like

4 Based on World Bank Statistics



NASA, The European Space Agency (ESA), Japanese Aerospace Exploration Agency (JAXA), etc.) and Commercial space activities. Military space activities comprise 11% of the total space economy with the US military alone generating nearly 7% of the global space revenue. Civil space activities (non-military Government activities) account for 13% of global space revenue with the US Government alone generating 6% of global revenue. Commercial space activities, as noted above, constitute 76% of the global space economy.

Figure 2 Composition of Global Space Activities

Source: Figures derived from data in “The Space Report 2015”

Just as it is important to recalibrate the association of space being dominated by big government funded projects to reflect the modern commercial activities that drive the space economy today it is also important to recalibrate the common association that space is only about rockets and satellites. The launch systems that transport objects to space, the satellites that operate in space and the ground stations that communicate with space are the key infrastructure that underpins the industry – they will always be an essential part of the space economy. But the economic activity associated with the construction and operation of these space, launch and ground systems is small compared to the products and services produced by these systems both from space and on the ground. Commercial space infrastructure (manufacture and operation of satellites, launch vehicles and large earth stations for commercial space activities) constitutes around 6% of global space activities by revenue. Government space infrastructure (both military and non-military) is not as easily identified



but probably is in the range of 10% - 15% of global space activities by revenue. Commercial space products and services – the use of the space systems and data derived from space or Space Enabled Services – generates 70% of space economic activities by revenue worldwide.

Figure 3 provides a breakdown of the activities of the Commercial Space Sector. It is no surprise that the three major activities of Space Enabled Services: Satellite Communications, Earth Observation and Position, Navigation & Timing Services (PNT or Global Navigation Satellite System (GNSS) services) dominate the commercial sector highlighting the unique products and services that can be provided by space. Commercial satellite communications as a whole is the major area of activity comprising 41% of global space activity by revenue. This reflects the fact that satellite communications was the first space activity to be commercialised and it continues to play an important role in global communications. What is of note is the size of the GNSS equipment and services sector which has grown dramatically over the last several years including growth by 18% in 2014 alone and now constitutes 28% of global space revenue.

Figure 3 Composition of Commercial Space Activities



Table 2 Breakdown of Key Subsectors in the Commercial Space Sector

Commercial Space Activities USD Billions Percentage of Global

Space Activities

Total 250.83 76%

Commercial Space Infrastructure 18.42 6%

Satellite Communications

Satellite Direct to Home TV 95.00 29%

Satellite Communications 21.70 6%

Satellite TV, Broadband & Mobile Equipment 17.90 5%

Satellite Radio 4.18 1%

Earth Observation 2.40 1%

GNSS Equipment & Services 91.33 28% Figures derived from data in “The Space Report 2015”

It is interesting to note that four of the seven activities listed in Table 2, including the two biggest activities, did not exist 30 years ago. The activities associated with Satellite Direct to Home TV, Satellite TV Broadband & Mobile Equipment, Satellite Radio and GNSS Equipment & Services are all new areas of activity which highlight the ability of this industry to continue to innovate and provide unique services. They also represent one of the massive transformations that has been taking place in the space industry - the move to the consumer market.

Thirty years ago commercial satellite activities were almost exclusively a wholesale activity where operators sold satellite bandwidth to large telecommunications companies as part of a telecommunications network or Earth Observation images to large Government mapping agencies. The development of higher power satellites and small rooftop mountable dishes changed all this. With these new technologies satellite became the preferred method to provide point to multipoint communications – ideal for television broadcasting – and the satellite Direct to Home TV industry was born. This is now the largest sub-segment within global space activities. This trend of providing space enabled services to the mass market has been the major driver of the commercial space industry over the last 15 years as it continues to introduce new services such as satellite broadband and GNSS equipment and services.

There are now literally billions of devices in use around the world that incorporate PNT data as part of their functionality which places space enabled services in to the hands of small businesses and individual consumers and not just Governments and large corporations. Ubiquitous access to this type of information allows innovative use of space enabled services and applications in ways never contemplated in the past. For example it is now possible for an individual consumer to receive a high resolution satellite image on their smart phone for US$20 which is a far cry from the days of only a few years ago where only large organisations could afford to use, or indeed gain access to, satellite imagery. Equally satellite PNT data is available so readily at a consumer level that it allows innovative businesses to emerge which make use of that availability. Over the last 15 years there has been an explosion of innovation across all aspects of the space market combining space derived services with other information sources to create new products & services for the consumer market generating massive economic growth. This is the power of the Exploitation Phase of space in full flight.



3.5 The ‘New Space’ Era

There is another significant trend that has been gaining traction in the space industry over the last several years - the emergence of what is often referred to as ‘New Space’. The ‘New Space’ era was ushered in by a number of billionaires primarily in the US who chose to spend their own private wealth to pursue personal space ambitions but within the context of a commercial space business. Many of these individuals had made their wealth in the Information Technology (IT) industry and they introduced many IT industry concepts of product development and rapid prototyping into the space industry. Many of these businesses were associated with the emerging space tourism scene (Virgin Galactic, Xcor, Blue Origin) but also incorporate conventional launch services (SpaceX, Virgin Galactic, Stratolaunch), and businesses associated with space infrastructure (Bigelow Aerospace). This first wave of new activity was then followed by more conventionally financed commercial space businesses which sought to be a part of the newly emerging commercial space ecosystem. A key facet of this new era of space activity was a change in the philosophy of product development which adopts more traditional commercial acceptance of risk and moves away from the previous Government procurement approach of ‘cost-plus’ contracting that existed within the aerospace industry for decades.

Concurrent with the fundamental philosophical change associated with the ‘New Space’ era is the growing capability of small satellites. The emergence of small satellites also started with a re-evaluation of the concept of risk in the space industry led by the University of Surrey in the United Kingdom (UK). Confronted with insufficient funds to build a big satellite they decided to test some of the “if it ain’t broke don’t fix it” paradigms of the space industry, in particular they decided to see how long their satellite would last by using non-radiation hardened commercial of the shelf (COTS) parts. It turned out that advances in integrated circuit (IC) manufacture had improved the quality of the IC’s and a small satellite designed for only months of operation continued to provide useful data for a few years. This spawned the small satellite revolution with its emphasis on low cost and a different approach to risk. As the capability of small spacecraft has grown and the costs decreased it has allowed a dramatic increase in the number of players capable of owning their own space assets. At first there was a dramatic growth in the number of countries able to develop and operate their own spacecraft which has stimulated the expansion of global space capability. The lower cost of these increasingly capable small spacecraft also encouraged the growth in commercial earth observation spacecraft and services. More tellingly though has been the emergence of very low cost cubesat technology that has placed the potential of satellite ownership into the hands of innovative small businesses, universities and even schools and individuals. A fundamental difference associated with this new class of satellite technology is a shift away from an emphasis on long life and high reliability towards shorter product cycles, achieving lower cost by accepting lower reliability with a plan to use the cost savings to build more satellites for quick replacement of the space assets. This new facet of the industry is often referred to as ‘Space 2.0’ and as the name connotes draws the moniker from the IT world and the innovators and investors who see the potential of this new paradigm of space activity.

The prospect of using low cost, easily renewable space platforms to deliver a wide range of new services has attracted serious attention. Planet Labs has attracted Silicon Valley venture capital funding to develop its smallsat constellation to deliver constant updates of Earth Observation imagery and launched 93 smallsats in 2014. Google spent $500 million to acquire Skybox Imaging to provide updates to Google Earth from its smallsat constellation. Elon Musk’s SpaceX and Richard Branson’s Virgin Galactic have both announced plans for large smallsat constellations to provide broadband services worldwide and the Virgin Galactic venture OneWeb has attracted wireless communications giant Qualcomm as a partner and satellite operator Intelsat as an investor.



A total of 158 smallsats were launched globally in 2014, an increase of 72% from the previous year and the smallsat market is projected by all analysts to be one of the next big growth markets in space. Industry analyst Markets & Markets predicts that the nanosatellite and microsatellite market will grow from USD $890 Million in 2015 to USD 2.52 Billion by 2020 – a compound annual growth rate of 23% - introducing a wide range of new applications in communications, earth observation, weather modelling and navigation. The Asia Pacific region is predicted to be the largest market in terms of revenue growth.

It is against this backdrop of the dramatic growth of the global space industry with increasing demand for innovative services and with technological breakthroughs lowering the barriers to entry that this report examines the space capabilities of Australian companies and their ability to participate in this rapidly growing space economy.



4 Selective Review of Australian Companies Involved in Space

This chapter describes the scope and methodology for this study and examines the broad findings about the size, character and capabilities of the companies interviewed for this study. It also identifies some high level trends reported by the subject companies providing some insight into the future for Australian companies involved in space.

In This Chapter: - 4.1 Scope of Study - 4.2 Methodology - 4.3 Overview of Companies Interviewed

- 4.3.1 Geographic Dispersion of Companies Interviewed - 4.3.2 Categories of Space Capability of Companies Interviewed - 4.3.3 Character of Business Type of Companies Interviewed

- 4.4 Industry Sectors Served by Australian Space Capabilities - 4.5 Revenue Generated by Australian Space Activities

- 4.5.1 Overall Revenue Generated by Australian Space Activities - 4.5.2 Export Revenue Generated From Australian Space Capabilities

- 4.6 Workforce Size Involved in Australian Space Activities - 4.7 Staff Demographics of Workforce Involved in Australian Space Activities - 4.8 Business Trends Identified By Companies Interviewed4.1 Scope of Study



4.1 Scope of Study

It is important to note that this study is not a comprehensive look at the Australian space scene. The goal of the Department was to gain a deeper understanding of the industry space sector in Australia, specifically the corporations involved in space. Hence the focus of this study was specifically and solely directed at Australian for-profit companies involved in the space sector with a view to understanding their space capabilities, the markets they serve and the potential to expand both domestically and globally. While the Department recognises that other sectors also play a role in the Australian space landscape the purpose of this study was to understand the aspects of the purely commercial space marketplace hence the terms of reference specifically excluded government and not-for-profit space activities as well as the research and academic sectors. The focus of this study was solely on Australian corporations with space capabilities.

In 2010 and again in 2011 the then Department engaged APAC to conduct studies of the current Australian space activities and their impact on the Australian economy which included the space activities of corporations. The Department was now interested in more detailed information on companies’ space capabilities, the markets they serve, the way the business developed and their prospects for growth. This type of information is best collected directly from the company hence the study is based on direct interviews with Australian companies.

4.2 Methodology

Based on these terms of reference the results of this study are based on direct interviews conducted by APAC with 46 Australian companies active in the space industry.

The selection of the companies to interview was a key element of this study. APAC’s most recent previous study of the Australian space sector in 2011 identified 466 private sector organisations conducting space activities. APAC used these organisations as the starting point to select companies to interview for this study on Australian space capabilities.

The creation of a target list of companies to interview was determined by several considerations:

The goal of capturing the widest range of Australian space capabilities,

The goal of including a wide geographic spread of companies (APAC’s previous studies indicated that Australian space activities exist in all Australian states and territories),

The goal of including a diverse range of businesses – small, medium and large as well as multinationals with operations in Australia,

At the specific request of the Department the goal of including businesses that represent some of the new applications and innovations in space.

One of the key objectives of the study was a more detailed understanding of the space capabilities of Australian corporations hence APAC selected capturing the widest range of Australian space capabilities as the starting point for the target interview list. In the 2010 and 2011 studies APAC developed a model of grouping space activities into nine broad segments:

1. Space Systems 2. Launch Activities & Support Services 3. Ground Systems 4. Space Enabled Services & Applications 5. Space Activity Support Services 6. Space Science and Research & Development



7. Space Education & Training 8. Space Related Associations and Public Information Activities 9. Other Space Related Activities

This model was adapted to focus on space capabilities and tailored to fit the business market. Due to the exclusive focus on companies in this study APAC did not collect data on the eighth and ninth segments noted above which did not relate to commercial activities. One of the advantages of adapting APAC’s previous model was that some of the data collected in this study could be directly compared with data APAC collected in previous studies thus providing another snapshot in time to enrich the data. For this study company space capabilities were grouped into the following seven segments

1. Space Systems 2. Launch Systems 3. Ground Systems 4. Space Enabled Services 5. Space Support Services 6. Space Research & Development 7. Space Education & Training

For the purposes of identifying companies to interview for this study, and with limitations on the number of interviews that could be conducted in mind, APAC focused on identifying companies with capabilities in the primary space segments of Space Systems, Launch Systems, Ground Systems, and Space Enabled Services – the development of products & services of space derived data. Space Enabled Services are comprised of three major service domains: Satellite Communications; Earth Observation; and PNT.

APAC thus targeted companies with capabilities in the following segments and specific service domains within the Space Enabled Services segment A) Space Systems B) Launch Systems C) Ground Systems D) Space Enabled Services i) Satellite Communications ii) Earth Observation iii) Position, Navigation & Timing The goal was to select the target companies to be interviewed so that a representative sample of capabilities in each of these categories would be identified. The segments of Space Support Services, Space Research & Development and Space Education & Training were not used in the compilation of the target list but if the interviewed companies were active in these categories this was captured and recorded during the interview process.

Using companies with capabilities in these areas as the initial filter APAC then looked to ensure a wide geographic spread, a mixture of business size, (small, medium, large), and business types including multinationals, start-ups and “New Space”, and companies using space services in new and innovative ways to develop a broad target list of companies across the Australian space sector. The final aspect was timing and availability – the ability to meet and go through the face-to-face interview process with APAC.



4.3 Overview of Companies Interviewed

Ultimately APAC completed interviews with 46 companies covering a sample of the Australian space industry across the various segments and service domains identified above. While recognising that this study cannot be considered a comprehensive study the data does reveal some interesting information about Australian space companies and the Australian space sector.

4.3.1 Geographic Dispersion of Companies Interviewed

APAC interviewed companies with space capabilities headquartered in every state and territory except the Northern Territory. It should be noted that these companies had space related staff in every state and territory including the Northern Territory. The geographic breakdown of the companies interviewed is shown in Figure 4 and Table 3.

Figure 4 Number of Companies Interviewed by State & Territory

Table 3 Number of Companies Interviewed by State & Territory

State ACT NSW NT QLD SA TAS VIC WA

Companies Interviewed 9 13 0 12 3 1 6 2

4.3.2 Categories of Space Capability of Companies Interviewed

The distribution of companies across the various space capability segments is shown in Figure 5 and Table 4.



Figure 5 Number of Companies with Space Capabilities by Segment

Table 4 Number of Companies with Space Capabilities by Segment

No. of Companies with Capabilities by Segment

Space Systems

Launch Systems

Ground Systems

Space Enabled Services

Support Services

R&D Education & Training

Primary Activity 6 3 19 32 7 6 7

All Responses 15 10 38 42 23 33 14

Many of the companies interviewed have capabilities in more than one category. To more clearly differentiate the focus of space capabilities in Australia all companies were asked to nominate the primary categories in which their space capabilities were used. This is reflected in the ‘Primary



Activity’ row in the table. The ‘All Responses’ row reflects the number of interviewed companies that have capabilities in the particular category.

The data shows that Australia not only has space capabilities in all the four primary space segments targeted for this study (‘Space Systems’, ‘Launch Systems’, ‘Ground Systems’, and ‘Space Enabled Services’) but indeed across all seven segments of capability. This is not unexpected because APAC’s previous studies found that Australia had activities in all these segments and APAC specifically targeted likely companies to identify capabilities in these areas. What is of interest is the magnitude of companies in some of the segments. The highest concentration of capabilities is in the ‘Space Enabled Services’ segment which comprises ‘Satellite Communications’, ‘Earth Observation’ and ‘PNT’. Of the 46 companies interviewed 42 (91%) have capabilities in ‘Space Enabled Services’. Figure 6 and Table 5 below show the further breakdown of capabilities within the segment of ‘Space Enabled Services’ based on these service domains. Satellite communications leads the way with 57% of interviewed companies having capability in this area followed by ‘PNT’ with 39% of interviewed companies having capabilities in this field. The prominence of capabilities in ‘Space Enabled Services’ is consistent with the findings from APAC’s previous studies and global space industry trends.

Figure 6 Companies with Space Enabled Service Capabilities by Service Domain

Table 5 Companies with Space Enabled Service Capabilities by Service Domain

No. of Companies with Capabilities by Service Domain

Satcoms Earth

Observation PNT

Primary Activity 14 8 13

All Responses 26 12 18



‘Ground Systems’ also stands out amongst the segments of capability with 83% of the respondents indicating capabilities in this area. At one level this is not unexpected because the operation of satellite ground stations has long been a noted strength in Australia but the magnitude is a bit surprising. It should also be noted that the ground systems capability includes systems for reception of all the ‘Space Enabled Services’ – ‘Satellite Communications’, ‘Earth Observation’ and ‘PNT’ systems and the growth of the ‘PNT’ sector is the principle explanation for the high number of companies in this category. Also of note is that 32% of the companies interviewed indicated capabilities in ‘Space Systems’ and 22% cited capabilities in ‘Launch Systems’. A more detailed breakdown of these capabilities will follow later in this report but these top level numbers indicate a wide range of space capabilities throughout Australia.

One of the more surprising findings of this data is contained in the last three segments of Table 3 – ‘Space Support Services’ (which includes consulting services), ‘Space Research & Development’ and ‘Space Education & Training’. APAC did not target companies in these segments, preferring to concentrate the interviews on the key space capabilities in the first four segments. Also in APAC’s previous studies the categories of ‘Space Research & Development’ (R&D) and ‘Space Education & Training’ were designed primarily to capture information about the academic and research sectors hence were not considered particularly relevant to this study. Nevertheless for a more complete study APAC decided to ask companies about their capabilities in these areas during the interviews.

The most telling statistic to emerge from these segments is that 72% of companies interviewed have capabilities in ‘Space R&D’ and 13% consider it a primary capability for the work they do in space. From the interviews it is clear that most of the companies feel that R&D is an essential part of their business and that it is a critical means of gaining a competitive edge and maintaining differentiation in the marketplace. Many of the companies developed R&D capability to meet the needs of their customers, often through taking products that were developed overseas and providing the smarts to adapt them to Australian conditions or to provide specific solutions and their success at this encouraged them to make this a key part of their business. In interview after interview companies talked about the importance of R&D to their business, particularly the smaller and newer companies that are introducing new innovations in the ‘Space Enabled Services’ area. Clearly strong capability in ‘Space R&D’ is seen as an essential ingredient for success by most of these companies.

The other surprising result is the prominence of ‘Space Education & Training’ capabilities where 30% of the interviewed companies indicated capability and 15% cited it as a primary capability for their organisation. This capability centres on specialist professional training and development courses in space conducted by these companies in both Australia and overseas, many of which lead to certified qualifications. The number of companies conducting these courses on a for-profit basis indicates a strong demand for specialist space knowledge both in Australia and overseas and a number of Australian companies have the capabilities to meet this need.

An interesting feature that emerged from the interview process is that some of the companies do not see themselves as part of the space industry per se. This occurred most often in the ‘Space Enabled Services’ segment – usually with companies having ‘Earth Observation’ and ‘PNT’ capabilities. Some of the companies active in these areas categorised themselves more in the information industry, the geospatial industry or the position and location industry rather than the space industry. Even some firms with ‘Satellite Communications’ or ‘Ground Systems’ capabilities categorised themselves as part of the Defence or Telecommunications industries depending on the primary customers they served. This highlights the difficulty in capturing useful data about the space sector. It also highlights the fact that ‘Space Enabled Services’ in particular have embedded themselves into the fabric of modern society and are a key element underpinning many significant industries. This is true of the information, telecommunications and geospatial industries but it is particularly true of the position and location industry where to quote one of the interviewees, “No



surveyor can do his job these days without access to the Global Positioning System (GPS)/GNSS signals from space”.

4.3.3 Character of Business Type of Companies Interviewed

For this study APAC also targeted a wide range of business types to ensure a broad sample of the Australian space industry. Figure 7 and Table 6 indicate the breakdown of the 46 companies interviewed by business type.

Figure 7 Interviewed Companies by Business Type

Table 6 Interviewed Companies by Business Type

Business Type Multinational Overseas Parent

Large Corporation

SME University Owned

Entrepreneurial

No. of Companies 10 5 5 23 1 2

Multinational refers to well known international organisations headquartered overseas which have an entity, often incorporated in Australia, that is operating with space capabilities in Australia. ‘Overseas Parent’ refers to organisations that have their headquarters overseas but are generally more regional operators rather than international operators and have an Australian entity with space capabilities. ‘Large Corporations’ are defined as companies with more than 200 employees. The term ‘SME’ refers to companies with 200 or less employees. The term ‘University Owned’ company is self–explanatory, while the term ‘Entrepreneurial’ company refers to start-up businesses that represent some of the new applications and innovations in space. Table 3 illustrates that APAC was able to interview companies across a wide range of business types to get perspectives from these different business entities.



The data also shows that 33% of the companies interviewed were Australian operations of multinational or overseas entities. It is clear that a significant number of overseas organisations active in space have established operations in Australia. Many are here to provide services to the Department of Defence and the Australian Defence Force ADF but a number are serving the commercial Satellite Communications, Earth Observation and Position, Navigation and Timing sectors. Some have established Australia as their regional headquarters for New Zealand and the Pacific Islands and even for Asia in some instances. It is clear that Australia is definitely considered favourably by many international space organisations as a market and as a potential base of operations in the region.

The other key finding illustrated in this chart is that 50% of the companies interviewed were Small or Medium Enterprises (SME). This is not particularly surprising since more than 90% of Australian companies are SMEs. This is also consistent with APAC’s findings in its 2010 and 2011 studies where the vast majority of Australian space organisations were identified as SMEs. It is clear that the Australian space industry is primarily comprised of SMEs or small to medium pockets of space capabilities within larger organisations.

It is also clear that this is a dynamic industry in terms of business activity. New companies are being formed, other companies are being bought, sold or merged. Of the 46 companies interviewed four have been founded within the last five years, 12 have been started within the last 10 years and 21, nearly half of those interviewed, have been founded within the last 15 years since the start of the Commercial Exploitation Phase of space. This is a significant amount of new company generation for this industry and shows that the industry is responding to international growth trends. Additionally, more than 75% of the newly formed companies have space capabilities in Space Enabled Services – Satellite Communications, Earth Observation and Position, Navigation and Timing. Again this is consistent with the international trends where Space Enabled Services have been the major growth area.

However new company generation is not the only business activity taking place. While preparing the target interview list, APAC discovered that two Australian companies which had been active in producing space-related hardware for a number of years, had been acquired by separate North American interests. In both cases the North American companies acquired the Australian Intellectual Property (IP) and moved these products into their North American operations and closed the Australian facilities leaving the Australian staff looking for jobs. During the interview process stories emerged about Australia being seen as a good hunting ground for space based IP and that North American and European companies are actively watching the Australian space SME and university sectors with a view to acquiring good space IP and incorporating it into their overseas operations. In some cases companies have been approached to move their operations offshore. There is a sense that Australian space capability and IP is undervalued locally and that overseas interests can obtain good bargains by mining Australian space capabilities.

Other business activities include acquisition by overseas organisations where the Australian operation remains largely intact, acquisition by overseas or domestic companies where the Australian operation is amalgamated into other existing Australian operations and mergers between companies with aligned interests but complementary capabilities. The amount of this activity has been surprising as 20% of the companies interviewed have undergone some sort of recent ownership change via acquisition or merger. And like any other industry sector the Australian space industry is not immune from business failures and companies exiting the sector due to lack of business. APAC has uncovered evidence of both these results during the course of this study.

Overall the picture that emerges is that the Australian space industry is a surprisingly active and dynamic sector in a business activity sense. This is a clear sign that the Australian space sector is squarely in the commercial marketplace where market forces are the dominant factor. And the high



level of activity clearly indicates that the Australian space industry is perceived by many, particularly by overseas interests, as having pockets of significant commercial value.

4.4 Industry Sectors Served by Australian Space Capabilities

There is strong evidence of the importance of the Australian Space Industry that emerged in another way as well. During the interview process the companies were asked to nominate the broad industry sectors that utilise their space products and services. To standardise the data and enable not only a comparison between companies but also comparison with previous studies APAC provided the interviewees with the list of industry sectors used in the 2010 and 2011 studies. This list was the Australian and New Zealand Standard Industrial Classification (ANZSIC) of industry sectors. The ANZSIC list does not directly list Government areas which are a major client base for space activities. APAC accounted for this by including Federal Government, Defence and State and Local Governments as separate additional categories to the ANZSIC list in this interview question consistent with 2010 and 2011 studies.

The sectors of the Australian economy that utilise space products and services provided by the 46 companies interviewed are shown in Figure 8 and Table 7 below.

Figure 8 ANZSIC Industry Segments Served by Space Capabilities of Interviewed Companies



Table 7 ANZSIC Industry Segments Served by Space Capabilities of Interviewed Companies

The responses reveal that space-related products and services are used in every sector of the Australian economy. This fact was revealed in the 2010 and 2011 studies but it is replicated here with a sample set of only one quarter the size of the number of respondents to this question in 2011.

Defence is clearly the major industry sector for space companies in this study as 72% of the interviewed companies have Defence as a customer. Mining is the second most important industry sector for space in this study with 67% of respondents providing space services to the mining sector while the Federal Government was the third largest sector with 59% of interviewed companies having the Federal Government as a customer for space products and services. This also indicates that the Commonwealth of Australia, through the Defence Department in particular, is a significant user of space services and a critical customer for this industry.

Agriculture, Forestry & Fishing (54%), State & Local Government (54%), Professional, Technical and Scientific Services (52%), Electricity, Gas & Water Supply (50%) and Information, Media & Telecommunications (50%) are the other industry sectors that at least half of the companies interviewed have as customers. Many of these sectors are multibillion dollar industries and a significant element of their productivity is dependent on space products and services, particularly on Satellite Communications, Earth Observation and Position, Navigation & Timing services. Clearly space services play an important part in the Australian economy.

Customers of Space-Related Activity by Industry Sector

Responses by Percentage

Responses by Number

Agriculture, Forestry and Fishing 54% 25 Mining 67% 31 Manufacturing 22% 10 Electricity, Gas & Water Supply 50% 23 Construction 43% 20 Wholesale Trade 7% 3 Retail Trade 11% 5 Accommodation and Food Services 22% 10 Transport, Postal and Warehousing 39% 18 Information Media & Telecommunications 50% 23 Financial and Insurance Services 30% 14 Rental, Hiring and Real Estate Services 15% 7 Professional, Scientific and Technical Services 52% 24 Administrative and Support Services 11% 5 Public Administration and Safety 43% 20 Education and Training 41% 19 Health Care and Social Assistance 26% 12 Arts and Recreation Services 17% 8 Federal Government 59% 27 Defence 72% 33 State and Local Government 54% 25 Other Services 11% 5

Total Number of Company Responses 46



4.5 Revenue Generated by Australian Space Activities

4.5.1 Overall Revenue Generated by Australian Space Activities

Most of the 46 companies interviewed provided revenue figures which sum to a collective annual revenue of nearly $2 billion for space products and services from this particular group of companies. This matches the upper bound estimate of the 2011 study which was based on revenue data provided by 180 organisations, of which only 86 were companies. Clearly in terms of revenue the Australian space industry is much larger than the numbers derived from the 2011 study.

There are some specific reasons behind this increase:

1) More Accurate Numbers - To encourage responses to the revenue question in the 2010 and 2011 studies the organisations were invited to nominate a revenue range. The direct interview approach used in this study enabled APAC to obtain more specific numbers than just a range.

2) Revenue Growth – There are 14 companies interviewed in 2015 that provided a revenue range in the 2011 study. The collective 2015 revenue figures for these companies are 15% higher than the top of the revenue range and 34% higher than the middle of the revenue range from the 2011 study. This confirms significant space revenue growth for these companies and suggests general revenue growth for the broader Australian space industry since 2011.

3) More Responses from Large Companies – Many large companies did not respond to the revenue questions in the 2011 study. The direct interview approach used in this study allowed APAC to capture revenue data from many of these large companies which was not available in the previous studies. These larger companies generally have larger space revenues and the lack of this data in previous studies effectively led to an underestimation of the size of the industry. This is the single biggest factor in the revenue increase compared to the previous studies.

Clearly Australia’s space industry is larger than identified in APAC’s last study in 2011. Individual companies have grown and specific sectors have grown, especially the satellite communications and PNT sectors. APAC notes that this study does not represent a comprehensive picture of the space industry and hence any estimates made from this small sample set must be treated with caution. However, based on the data gained in the 2011 study and the new, more specific information on companies gained from this study as a broad estimate APAC believes that the Australian space industry is now generating revenue in the range of $3 billion - $4 billion per annum.

In spite of these larger numbers the industry is still characterised by a small number of companies generating large revenue streams while the bulk of the companies generate much more modest revenues. The revenue profile matches the company profiles discussed earlier – the majority of the companies interviewed are SMEs.

An interesting facet to emerge from the study is that Australia’s contribution to the global space economy is larger than the pure revenue numbers would suggest. APAC identified at least three major GNSS product software development cells in Australia that are a key part of the internal supply chain for major multinational companies. As product development centres within their organisations they are not part of the sales process and hence do not generate revenue – they are a cost centre within their companies. But the companies’ products using the Australian developed software generates millions worldwide when sold by the multinationals through their normal sales channels including some in Australia (who were not interviewed in this study). APAC estimates that the worldwide revenues from product sales using software developed at these Australian development centres is in the range of $250 - $300 million. This is a substantial contribution by any measure but one that is not directly reflected in the revenue data obtained in this study.



4.5.2 Export Revenue Generated From Australian Space Activities

Export revenue is a feature and a target for most of the 46 companies interviewed for this study. Nearly two-thirds of the companies (30 out of 46) reported generating export revenue from sales of space goods and services overseas. Collectively the interviewed companies reported over $165 million in export revenue from space activities. However this export revenue constitutes only 8.4% of the total space related revenue of nearly $2 billion generated by the interviewed companies indicating that the vast majority of space revenue for these companies is earned in Australia.

The figure of 8.4% of space revenue generated from exports is comparable to the low end of the export revenue range of 11% - 20% of total revenue found in the 2011 study. There are 11 companies interviewed in 2015 that provided an export revenue range in the 2011 study. The collective 2015 export revenue for these companies is only 4% higher than the middle of the export revenue range they reported in the 2011 study suggesting very modest export revenue growth for these companies. This data would suggest that the significant increase in space-based revenue since the 2011 study stems more from an increase in the size of the Australian space market than from export driven growth.

During the interviews the companies cited various factors that can constrain export growth. One key factor that limits export revenue growth is that many companies have specifically defined sales territories imposed by their commercial arrangements or their corporate parent. This is particularly true for the Australian arms of multinational companies since these multinationals often have offices in other countries to pursue space business in those overseas markets. Almost half of the interviewed companies – 43% - reported commercial or territorial restrictions which limit the scope of their export business. Some companies are restricted solely to Australian operations hence are not able to export. Others have offshore sales territories that are limited to the relatively small New Zealand or Pacific Island markets which constrain export opportunities. On the other hand there are some companies, including multinationals, that see Australia as an effective base from which to target sales in the Asia Pacific region. While these two extremes were encountered within the 46 companies interviewed it is clear that commercial or territorial restrictions can certainly limit export growth for many companies.

The large number of interviewed companies with capabilities targeting the Defence sector also has an impact on export revenue. Several companies noted that many of the technologies and capabilities used to serve the Defence sector are not readily available for export due to their strategic and security implications. Companies indicated that these technologies and capabilities can generally only be exported to “friendly” markets and often those markets have their own technological solutions or preferences. Exporting Australian space technology in the Defence sector is not straightforward which can impact opportunities for export growth.

Another theme affecting export revenue growth that emerged during the interviews is that Australia is generally not perceived as being active in space hence Australian space companies suffer from a credibility gap when competing in international markets. Companies reported that this perception and negative bias is a hurdle that Australian companies must often overcome to gain traction in international space markets.

Half of the companies interviewed for this study were SMEs and many of them commented on the particular difficulties that SMEs face in exporting into international markets including the challenges of being constantly visible and present in overseas markets to gain credibility and the often long gestation times for contract award. In spite of these challenges 70% of SMEs interviewed reported some level of export success with this group collectively generating 23% of the reported export revenue.



4.6 Workforce Size Involved in Australian Space Activities

During the interview process the companies were asked for information about the number of staff in the company that worked in space-related jobs. The companies were asked to provide details of the total space-related staff by headcount as well as by Full Time Equivalent (FTE) staff. The intent of these questions was to specifically identify the space related staff separately from other staff within these companies. The companies were also asked a number of questions about staff demographics to help build an overall picture of the characteristics of the space staff within the companies.

Collectively the 46 companies employ 1,314 staff in space-related jobs by headcount and 1,190 FTE staff in space-related jobs. It should be noted that the majority of the companies indicated that the staff headcount and FTE numbers were the same. In a few cases the companies provided only headcount numbers and in these cases APAC assumed that the staff FTE numbers were equivalent to the staff headcount numbers.

These staff figures suggest that there is on average approximately 0.91 FTE staff for each individual engaged in space-related activities. This FTE to headcount ratio is much higher for this set of companies than the 0.66 FTE to headcount figure found in the 2011 study. The 2011 study noted that rather than indicating a high degree of part time work this figure was more likely to indicate that many individuals had other responsibilities within the organisation outside of their activities in the space domain consistent with space being only part of the activities of the organisation. The much higher FTE to headcount ratio of 0.91 for the 46 companies interviewed indicates that the space-related activities are generally a well-defined and self-contained subset of the companies’ overall activities for this sample set.

In APAC’s 2011 study 180 organisations provided staff numbers indicating a total headcount of 2,402 space-related staff and an FTE of 1,574 space-related staff. The 2015 figures show 55% of the 2011 staff headcount numbers from a respondent set only 26% of the size of that in 2011. This seems to indicate that the number of staff in space-related jobs has grown since 2011.

To test this APAC compared the data from the 15 companies that provided staff data in both the 2011 and 2015 studies. Virtually all of these companies indicate increases in space-related staff. The total staff numbers of these 15 companies has increased by 14% over their total staff numbers in 2011. This would seem to indicate that the total staff numbers for the Australian space industry have indeed increased since 2011.

As with the revenue numbers many larger companies did not provide staff figures in 2011 but the direct interview approach used in this study allowed APAC to capture staff data from all of the companies interviewed including the larger companies. These larger companies generally have larger space-related staff and the lack of this data in previous studies almost certainly led to an underestimation of the number of space-related staff in the industry in these studies.

Again, APAC notes that this study does not represent a comprehensive picture of the space industry and hence any estimates made from this relatively small sample set must be treated with caution. However, based on the data gained in the 2011 study and the new, more specific information on companies’ staff headcount gained from this study as a broad estimate APAC believes that the Australian space industry staff headcount is now in the range of 9,500 – 11,500.

The Australian Bureau of Statistics benchmark for SMEs applies to companies with a total staff size of less than 200 people. It is interesting to note that none of the 46 companies interviewed had more than 200 space-related staff. Clearly many of these companies have considerable numbers of non-space-related staff and revenue which qualifies them as larger corporations however the fact remains that the pockets of space-related staff within these companies is relatively small.



4.7 Staff Demographics of Workforce Involved in Australian Space Activities

During the interview process the companies were asked a number of questions about the demographics of their space-related staff which are presented in this section. Figure 9 and Table 8 give a breakdown of the space-related workforce based on job category.

Figure 9 Number of Staff by Employee Category

Table 8 Number of Staff by Employee Category

Employee Job Categories Headcount by Employee Type

Percentage of Total Staff

Companies Responding

Total Space Related Staff 1,314 100.0% 46 Engineers & Scientists 556 42.4% 44 Technicians 310 23.7% 33 Educators & Trainers 15 1.1% 5 Research Assistants 1 0.1% 1 Sales, Marketing & Business Development 214 16.3% 39 Administration & Business Management 133 10.1% 38 Legal & Financial 45 3.4% 16 Manufacturing Workers & Maintenance Staff 37 2.8% 4 Other/Unspecified 3 0.1% 2

Total Responses 46



The data in Table 8 shows that the 46 companies interviewed have a highly technical workforce. Nearly all companies have engineers & scientists on their payroll and these comprise 42% of the total space-related workforce for these companies. Technicians comprise another 24% of the total workforce and these figures do not include an additional 300 trained technicians not on staff but available for contract work with one company. These percentages are similar to the Job Category percentages from the 2011 study where 38% of staff were Engineers & Scientists and 18% of staff were technicians. This is a high technology industry where often the Sales, Marketing & Business Development staff and Business Management staff have technical backgrounds.

This is reflected in the education levels of staff in the space industry. Figure 10 and Table 9 show the highest level of qualification attained by staff numbers within the 46 companies interviewed for this study.

Figure 10 Level of Qualification of Staff

Table 9 Level of Qualification of Staff

Level of Qualification Number of Staff Percentage of Total Staff Companies Responding

Total Space Related Staff 1,314 100% 46 PhD 60 5% 21 Masters/Post Graduate 163 12% 37 Bachelors Degree 645 49% 44 Certificate 307 23% 34 Tailored Training 15 1% 2 Other/Unspecified 124 10% 0

Total Responses 46



All of the 46 companies interviewed have at least one person in the company with a Bachelors Degree or higher. The data shows that 66% of the staff in these companies have tertiary qualifications and another 23% have certificates. Nearly half of the companies have staff with PhD’s. This is clearly an industry with very high levels of staff education and qualifications.

Figure 11 shows the space-related workforce within the 46 companies is predominantly male. Women comprise only 16% of the workforce. This is the same as the 16% level of women in the space-related workforce found in the 2011 study.

Figure 11 Space-Related Workforce by Gender

The space industry workforce from the 46 interviewed companies is skewed towards the older end of the age spectrum. Figure 12 and Table 10 show Workforce by Age Category.



Figure 12 Workforce by Age Category

Table 10 Workforce by Age Category

Age Category Number of Staff Percentage of Total Staff Companies Responding

Total Space Related Staff 1,314 100.0% 46 Less than 20 years 2 0.1% 2 20 – 25 years 77 5.9% 18 25 – 30 years 216 16.4% 37 30 – 40 years 420 32.0% 39 40 – 50 years 299 22.8% 38 Over 50 years 238 18.1% 37 Not Specified 62 4.7% 0

Total Responses 46

The data shows that 73% of the space-related workforce is over 30 years old and 41% of the workforce is 40 years of age or older. Only 39% of the companies have space-related employees that are younger than 30 years of age. This is an industry where experience and longevity in the industry is valued. During the interviews many of the companies acknowledged the need to bring younger staff into the company but they are not prepared to sacrifice long term experienced staff to achieve this. These figures reflect the same profile found in the 2011 study where 63% of the space-related workforce was over 30 years old and 40% of the workforce was 40 years of age or older.

This workforce is spread across every state and territory in Australia. Figure 13 and Table 11 show the geographic distribution of the workforce for the 46 companies interviewed.



Figure 13 Distribution of Workforce by State & Territory

Table 11 Distribution of Workforce by State & Territory

State & Territory Number of Staff Percentage of Total Staff Companies Responding

Total Space Related Staff 1,314 100% 46 New South Wales 396 30.1% 27 Victoria 168 12.8% 19 Queensland 318 24.2% 24 Western Australia 142 10.8% 13 South Australia 78 5.9% 8 Northern Territory 5 0.4% 4 Australian Capital Territory 199 15.2% 15 Tasmania 7 0.5% 4 Not Specified 1 0.1% 0

Total Responses 46

The interesting aspect of this data is that these 46 companies collectively have space-related staff in all Australian States & Territories. This is consistent with the findings of the 2011 study but it is replicated here with a much smaller sample set. It is another example of how space services and products are embedding themselves into the fabric of modern society nationwide. It is difficult to draw significant conclusions from this distribution because of the manner in which the data was collected. While NSW again has the most space-related staff consistent with the 2011 study findings it is also the home state for the majority of the companies interviewed. The broader staff numbers from the 2011 study showed almost equal staff numbers in Victoria, Western Australia and South Australia whereas this data from fewer companies shows more staff in Queensland and differing



amounts in the other states. APAC believes that the home state location of the companies interviewed is the main cause for this apparent redistribution of staff numbers by state noting that the second highest number of companies interviewed were in Queensland. However, it is worth noting that NSW has a high level of concentration of space-related satellite communications staff while Queensland has a high concentration of space-related Position, Navigation and Timing companies and hence staff.

4.8 Business Trends Identified By Companies Interviewed

The majority of the companies interviewed experienced growth over the last three years and anticipate growth in their space businesses over the next three years. Table 12 shows the results of Company Revenue Growth over these time frames.

Only 9% of companies reported a decline in revenue over the past three years and 13% reported no change in revenue while 78% of companies reported revenue growth during the last three years including 61% of companies reporting more than 25% growth over that time period. Over the last year companies also reported significant growth. For the last year again 9% of companies reported a decline in revenue while 26% reported no change in revenue and companies reporting growth dropped to 66%. This implies a level of variability in the revenue streams which is typical for large project contracts. Overall this is a picture of a growing industry with 68% of companies reporting steady to high growth (growth over 10%) over the last three years and 44% of companies reporting steady to high growth over the past year.

Table 12 Companies Revenue Growth

Companies Revenue Growth

Last 3 Years Last 1 Year Next 1 Year Next 3 Years

Number of Companies

% of Companies

Number of Companies

% of Companies

Number of Companies

% of Companies

Number of Companies

% of Companies

Decline 4 9% 4 9% 0 0% 1 2%

No Change 6 13% 12 26% 10 22% 3 7%

Growth 1-10%

5 11% 10 22% 8 17% 3 7%

Growth 11-25%

3 7% 4 9% 9 20% 5 11%

Growth >25%

28 61% 16 35% 19 41% 34 74%

Total Responses 46

The near term revenue expectations provided by the companies mirrors the revenue distribution from the past one year and past three years. The expected growth over the next one and three years is biased towards growth with no companies reporting a decline in revenue over the next year and only 2% of companies expecting a decline in revenue over the next three years. Overall the projected one year and three year revenue expectations are broadly consistent with the revenue generated during the past one year and the past three years. There is a definite expectation of revenue growth with 78% of companies predicting growth over the next year and 91% predicting growth over the next three years. A large number of companies are expecting significant revenue growth with 41% of companies expecting growth greater than 25% over the next year and 74% expecting growth of greater than 25% over the next three years. These numbers suggest a trend of



steady to exceptional growth in the space industry over the next three years which is similar to expectations in this industry globally.

Growth in Export Revenue is also expected by some companies, as shown in Table 13.

Table 13 Companies Export Revenue Growth

Companies Export

Revenue Growth


Number of Companies

% of Companies

Number of Companies

% of Companies

Number of Companies

% of Companies

Number of Companies

% of Companies

Decline 0 0% 0 0% 0 0% 0 0%

No Change 22 48% 21 46% 18 39% 15 33%

Growth 1-10%

7 15% 8 17% 12 26% 7 15%

Growth 11-25%

4 9% 7 15% 7 15% 7 15%

Growth >25%

13 28% 10 22% 9 20% 17 37%

Total Responses 46

The Export Revenue Growth figures reflect a slightly different story than the overall Revenue Growth figures. It is interesting that no company has experienced a decline in space export revenues over the last three years and no company anticipates a decline in export space revenues over the next three years. It is also noteworthy that the most often selected response for export revenue is ‘No change’. Nearly half of the companies report no change in export revenue growth over the last three years and although this drops to 33% over the next three years it is still much higher for export revenue than for overall revenue. The high number of companies reporting no change in export revenue is driven by two factors: 1) many companies have not yet established themselves in export markets, and 2) many companies are limited to specific sales territories and some are confined to sales only within Australia which precludes export revenue. While there is some indication that companies plan to take steps to address the first factor there is generally little that companies can do to address the second factor where sales territories are imposed by the parent organisation or commercial rights to sell in certain territories. Hence this is likely to remain a limitation on export revenue for many of these companies.

In spite of these limitations 52% of companies are reporting revenue growth over the last three years and 54% reported export revenue growth over the last year indicating a slight increase in companies exporting. Some companies are doing very well with 28% reporting export revenue growth of more than 25% over the last three years and 22% reporting export revenue growth greater than 25% over the last year. It should be noted though that often these high export revenue growth percentages are often off a low export revenue base as the overall export revenue is only 8% of total revenue so still remains rather small.

Most companies without sales territory restrictions are planning to increase exports with 61% of companies expecting export revenue growth over the next year and 67% of companies expecting revenue growth over the next three years. While a lot of this growth will be organic expansion of existing operations some of these companies have significant plans for export growth. This is reflected in the data where 20% of companies anticipate export revenue growth of greater than 25% over the next year and 37% of companies anticipate export revenue growth of greater than 25% over the next three years.

The companies also reported on their staff growth as shown in Table 14.



Table 14 Companies Staff Growth

Companies Staff

Growth


Number of Companies

% of Companies

Number of Companies

% of Companies

Number of Companies

% of Companies

Number of Companies

% of Companies

Decline 4 9% 3 7% 0 0% 0 0%

No Change 8 17% 10 22% 11 24% 5 11%

Growth 1-10%

2 4% 9 20% 12 26% 4 9%

Growth 11-25%

5 11% 11 24% 12 26% 14 30%

Growth >25%

27 59% 13 28% 11 24% 23 50%

Total Responses 46

It is not surprising to see that the number of companies reporting staff growth over the last three years corresponds to the number of companies reporting revenue growth over the last three years. Just as with the revenue figures there is a general bias towards staff growth. Only 9% of the companies reported a decline in staff over the last three years and only 7% reported a decline over the last year while 17% over the last three years and 22% over the last year reported no change in staff numbers. Nearly three quarters of the companies reported staff growth over the last three years with 59% reporting staff growth of greater than 25% over the past three years and 28% reporting staff growth of greater than 25% over the last year.

Staff growth is generally expected over the next three years as well. No companies project a decline in staff while 24% expect no change next year and 11% expect no change over the next three years. Staff growth over the next year is expected from 76% of the companies while over the next three years 89% of the companies expect to increase their space-related staff with half of the companies expecting to grow their staff by more than 25% over the next three years. Again this indicates strong growth prospects for the space industry consistent with global trends.

Companies also provided information on the growth of highly skilled staff within their organisation which is shown in Table 15.

Table 15 Companies Highly Skilled Staff Growth

Companies Highly Skilled Staff

Growth


Number of Companies

% of Companies

Number of Companies

% of Companies

Number of Companies

% of Companies

Number of Companies

% of Companies

Decline 4 9% 3 7% 0 0% 0 0%

No Change 7 15% 10 22% 11 24% 5 11%

Growth 1-10%

3 7% 9 20% 12 26% 5 11%

Growth 11-25%

5 11% 11 24% 12 26% 13 28%

Growth >25%

27 59% 13 28% 11 24% 23 50%

Total Responses 46



It comes as no surprise that the figures for growth of highly skilled staff are almost identical to the figures for the growth of all staff for the space industry. Space requires a highly skilled workforce and these figures reflect this. Apart from two minor differences for the last three years in the ‘No change’ and ‘Growth 1-10% ‘responses (‘No change’ = 17% for total staff versus (vs) 15% for highly skilled staff, ‘Growth 1-10%’ = 4% for total staff vs 7% for highly skilled staff) the number of companies reporting total staff growth and highly skilled staff growth are exactly the same. This indicates that the space industry relies on highly skilled staff to fuel its growth.

Given the critical importance of highly skilled staff in the space industry companies were asked whether they have experienced significant skill shortages when trying to recruit staff for space-related positions. Companies reporting experiencing skill shortages when recruiting space-related staff were then asked if they had tried to recruit from overseas to find these skills. The results are shown in Table 16.

Table 16 Skills Shortages in Australia

Skills Shortages in Australia Yes % Yes No % No

Companies experiencing space skills shortage 24 52% 22 48% Companies that have looked overseas to fill shortages 12 26% 34 74%

Total Responses 46

Slightly more than half of the companies, 52%, reported experiencing skills shortages when trying to recruit staff for space-related positions in Australia. This number is perhaps understated because some of the companies not reporting difficulties indicated that although they had not actually recruited staff they anticipated they might have difficulties when they did try to recruit.

The key skills shortages reported by companies are listed in Table 17.



Table 17 Reported Skills Shortages in Australia

Basic Skills Shortages Generally hard to attract young people with STEM backgrounds. Security clearance issue takes 6-12 months and industry is now charged for this by Defence. Australia has good quality well educated technical labour but some gaps in space related aspects - technical knowledge is high Remote Sensing Skills Shortages Salesmen with knowledge of EO market Support staff for satellite tasking Knowledge of Geospatial technologies & Google Fusion platforms Spatial industry scientists with knowledge of imagery & how to interpret Technical skills GNSS & EO image analysis Spatial data interpretation skills GIS experience with web based IT skills using multidimensional environmental data Position, Navigation & Timing Skills Shortages Combination of GNSS knowledge, software skills & mining industry understanding Combination of RF design experience with GNSS software experience Web development for machine technologies Engineering Skills Shortages Experience in space manufacture & design Experience with launch campaigns Engineering – space-related Mechanical, Electrical, Optical & software Software testing specialists Space mission analysis Satellite engineering skills Satcom Skills Shortages Software developers with understanding of RF Technical engineering skills Satcom & broadcast RF & network experience with TCPIP caching Combined IT & Satcom skills. Real need to understand IT business systems like Citrix, SAP Satcom engineers with experience in Microsoft Exchange and IT cloud systems Satcom engineers with RF & ground station experience Network engineering & telecommunications skills Difficult to find combined skills in Satcom & IT Field support technicians with communications experience Technical Skills Shortages Skills in detector technologies Adaptive optics & optomechanical skills Optical designers Photolithography experience Management Skills Shortages Hard to find satellite skills in both engineering & sales Have struggled to find logistics engineers for system design & detailed management

While this table provides an interesting account of some specific space-related skills shortages encountered by the companies interviewed it must be viewed with a degree of caution. These skills shortages were based on responses from only 24 companies which is a small sample set. Other companies in the same sector did not report shortages at all. The responses in many cases are



highly specific which reflect issues with specific recruiting processes where other factors might also influence the outcome including location and remuneration. Indeed many companies talked about the difficulty of attracting suitably qualified staff in big cities where many other employment opportunities are available for technically trained individuals that can often provide better pay (an issue that has long been a noted problem for the space companies in Silicon Valley). During the interview process one SME commented that “It is hard to attract smart people to work for the salary that we are prepared to pay”. It is also important to note the potential constraint that security clearances play in attracting qualified staff to this industry given that 72% of companies reported having Defence as a customer.

It is clear that there are some potential space-related skill shortages within Australia that can be a constraint on growth. Australia does not yet have a broad and flexible space ecosystem like in some other countries and hence is more prone to space-related skill shortages constraining growth. However, it is also clear that the SME nature of most Australian space companies are also a factor in constraining growth as these SMEs generally do not have the balance sheet flexibility to bullishly chase growth by seeking to employ the most qualified staff. For most Australian space SMEs staff growth must be directly linked to immediate revenue growth which is a recipe for very measured growth in both staff and revenue.

One theme that does emerge from the reported space-related skills shortages is the importance of combined skills such as Satcoms & IT skills or GNSS & software skills or Geospatial knowledge with EO image analysis. The need for these combined skillsets is a direct reflection of the growing emergence of Space Enabled Services which combine the space derived data in new and innovative ways to meet customer needs. The importance of a blend of space-related skills with other industry skillsets – particularly IT, communications and Geographic Information System (GIS) – has been a worldwide trend for many years and is expected to grow in importance in future years.

Of the 52% of interviewed companies that reported skill shortages when recruiting for space-related staff 50% of them reported recruiting from overseas to fill the positions. Table 18 lists the skills and the countries where companies ultimately recruited these skills.

Table 18 Countries Supplying Space-Related Skills Staff to Australia

Skill Shortages Country Supplying Skilled Staff

Adaptive Optics & Optomechanical France, Germany, Canada, Belarus Geospatial & Google Fusion skillsets USA, Ireland, South Africa, Israel RF & networking skills South Africa Satellite communications & software engineers China but recruited in Australia after they migrated

independently GIS skills & EO imagery Columbia Specialist spatial processing skills SouthEast Asia, South Africa, India, NZ Photolithography skills Singapore Combined Satcom & IT skills Europe Software developers with modelling skills UK Spacecraft Manufacturing & Design skills Expat Australians in US & UK

A number of interesting themes emerged from this question. One key theme is that multinationals tend to solve their space-related skillset needs by seconding staff from their parents overseas. This is such a common occurrence that often multinationals do not even bother recruiting locally – they just assume they will fill any space-related skill shortages from elsewhere in their company. While for many companies this is a more expensive option than employing local staff they often find that with many contracts – particularly Defence contracts – that this expense is borne by the customer.



Also in many cases it is seen within the company as an employee perk to get a job rotation to Australia. These internal philosophies often diminish the focus on finding suitable local staff.

Several companies stated that the issue of security clearances and to some degree International Traffic in Arms Regulations (ITAR) severely restricts where they can source staff with space-related skills. For work on most Defence space projects companies virtually cannot recruit from overseas except from acceptable nations like the US or UK and where the individual already has suitable security clearances. This is certainly a reason why many multinationals generally seek the necessary skills from within their parent company. There is also a general feeling that Defence welcomes this use of highly skilled space staff from overseas. The companies have the impression that Defence wants overseas skills because it feels they will have more overall experience and more recent experience which local staff do not have. This impression is another factor that diminishes multinational focus on finding suitably qualified local staff.

Another key theme is that most companies are realistic about the need to train staff to meet their space-related skillset needs. Like any business in a specialised field these space companies recognise that they will generally not find the required skillsets on the open market and will need to train and develop their staff. Most of the companies that did not report space-related skill shortages indicated either that they had not hired many staff or that they sought basically qualified engineers and technicians and then provided specific space industry training to meet their needs. Many of these companies indicated that they had specific internal training programs to develop their space-related workforce.

Another key theme is that Australia is an attractive destination for a wide variety of reasons. For some parts of the world like in Southeast Asia, India, China, South America, New Zealand and Eastern Europe it often represents greater opportunity including better wages and conditions. For Western Europeans, US and UK it often represents an interesting place to live while being in demand for their skillset. It is interesting to note that for expat Australians who have been working in the space industry overseas it represents a chance to come home although often with the trade-off of lower wages. The bottom line is that Australia is an attractive destination for staff with space-related skills for various reasons although it has difficulty matching the pay scales and high-level opportunities on offer in the major space nations in Europe and North America.

Finally several companies noted that recruiting space skillsets from overseas is not a one-way street. Many mentioned that one of the reasons they find themselves looking for space-related skills is that their own local staff have been recruited by overseas based space companies particularly if they have lodged patents in their name – these staff are often headhunted by overseas firms. In this sense Australia is already part of the global space scene and is often seen as a useful area to recruit suitable manpower by overseas firms. It is ironic that one of Australia’s most prolific space exports is that of well educated Australian citizens willing to work in the space industry overseas.



5 An Overview of Current Australian Space Capabilities

This chapter provides a more detailed analysis of the breadth of Australian space capabilities based on the companies interviewed for this study. It provides analysis of space capabilities at a more detailed level of categorisation and identifies the level of intensity of Australian activity surrounding each category of capability.

In This Chapter: -5.1 Defining Space Capabilities -5.2 Classification of Space Capabilities -5.3 The Breadth of Australian Companies’ Space Capabilities 5.3.1 Overview of Australian Company’s Space Capabilities

5.3.1.1 Space Systems 5.3.1.2 Launch Systems 5.3.1.3 Ground Systems 5.3.1.4 Space Enabled Services 5.3.1.5 Space Support Services 5.3.1.6 Space Research & Development 5.3.1.7 Space Education & Training



5.1 Defining Space Capabilities

The term space capability may conjure up different meanings depending on the background and space understanding of the audience. For some it covers only objects that go into space. For others it includes the ground systems that communicate with space objects, while some include the services provided by satellites within its scope. Within the space community it is generally accepted that space capabilities include the ability to produce and operate everything from the spacecraft that flies in space, the launch vehicle and service that takes it to space, the ground equipment that supports and communicates with it and the products and services that it enables. With the increasing movement of space enabled services into the consumer markets the issue becomes where to draw the line between a true space capability and someone who merely uses available services. A case in point would be the pervasive use of GNSS for precision location by the surveying profession. While virtually every surveyor relies on GNSS for precision location data it would be inappropriate to consider surveyors as having a space capability. However, it is more commonly accepted that the companies which provide GNSS location services and devices do have space capabilities. For the purposes of this study APAC has adopted the broader definition of space capabilities used in the guidelines for the Australian Government’s former Australian Space Research Program (2009-13) which includes:

a) the designing, building, testing, installation, deployment and/or operation of hardware, or systems developed: i. to be located in space; ii. for the purpose of getting into or returning from space; or iii. for the purpose of getting data or information to or from space;

b) the design, development, testing, installation and/or use of applications that require the operation of hardware or systems listed at (a);

c) governance arrangements (such as legal, management and advisory structures) to support space hardware, systems or applications listed at (a) and (b); or

d) research into the environment in which space hardware or systems listed at (a) operate

APAC also includes support services for Australian space-related activities (consulting, financial services, Education & Training, broad space-related research capabilities within this broad definition of space capabilities.

This definition is consistent with the definitions for space capabilities used in major international studies. In particular these definitions include services and applications of space-derived information as well as research to support these activities. Finally, for the purposes of this study APAC has defined the boundary of space capability to lie between the companies that provide a space enabled service or product, and the consumers that use that product or service.

5.2 Classification of Space Capabilities

As discussed at the start of Chapter 4 APAC has adapted its 2011 model for space activities for this study on Australian corporate space capabilities. APAC has divided space capabilities into specific broad segments reflecting the satellites based in space, the launch systems taking satellites to space, the ground systems communicating with space objects, the products and services produced by space systems, the support services for the sector and the research & development and education & training as the segments most suitable for capturing the space capabilities contained in the Australian corporate sector. These broad segments of space capabilities are summarized as follows:



1) Space Systems 2) Launch Systems 3) Ground Systems 4) Space Enabled Services 5) Space Support Services 6) Space Research & Development 7) Space Education & Training

The segment of ‘Space Enabled Services’ can also be separated into three different service domains: ‘Satellite Communications’; ‘Earth Observation’; and ‘PNT’.

Each of the broad segments of space capability also encompass various categories and sub-categories of capability that combine to constitute the broader segment. As a broad principle companies that have space capabilities in ‘Space Systems Segment’, ‘Ground Systems Segment’ or ‘Launch Systems Segment’ can apply those capabilities across any of the three service domains of ‘Satellite Communications’, ‘Earth Observation’ and ‘PNT’. The same is not generally true of companies with space capabilities in the segment of ‘Space Enabled Services’ where it is more typical for such companies to be specialised in one particular service domain. One area where this tendency becomes blurred is where some companies blend ‘Earth Observation’ data with ‘Precision Location’ services. Another is where large multinational companies have capabilities across the broader spectrum of space activities.

Table 19 below depicts the broad segments of space capability and the first level of category of capability that they comprise. It also indicates whether the 46 companies interviewed for this study have capability in those areas and if so the strength or intensity of capability in that area.



Table 19 Categories of Space Capabilities

Segment Category of Capability Intensity of Capability Amongst Companies

Interviewed

Space Systems Space systems prime / Systems integration Low

Space subsystems supply Low

Space component and material supply Low

Space qualified testing and facilities Low

System engineering and technical support services High

Satellite owner / operator Medium

Other Low

Launch and support Services

Launch services None

Launch vehicle manufacturing and assembly Low

Launch vehicle component and subsystem manufacturing Low

Launch support services Low

Other Low

Ground Systems Ground Segment Prime / System Integration High

Ground Segment Subsystem & Equipment Supplier High

Antenna / Ground Station Component or Material Supplier Medium

System Engineering and Technical Support Services High

Ground Station / Teleport Owner / Operator High

Tracking Telemetry & Command Operations High

GNSS Reference Stations & Fixed GNSS Receivers High

Other Low

Space Enabled Services and Applications

Satellite Broadcast Service Providers Medium

Satellite Communications Service Providers High

User Equipment manufacturer Low

User Equipment supplier Medium

Earth Observation Services & Applications High

Satellite Navigation Services & Applications High

Technical Support Services High

Space Support Services

Legal Services None

Financial Services Low

Insurance Services None

Consultancy Services High

Research & Development

Space Science Medium

Space Engineering High

Development of Applications for Space Derived Data High

Research Using Space Derived Data Medium

Space Related Socio/Economic Legal Research Low

Space Education & Training

University Course Provision Low

Vocational or Technical College Course Provision Low

Professional Development Courses High

Commercial Training Courses High

Professional Training Organisation Low

Other Low

Key:

High level of Australian capability (more than 7 companies out of 46 interviewed)

Medium level of Australian capability (3 to 6 companies out of 46 interviewed)

Low level of Australian capability (1 or 2 companies out of 46 interviewed)



It must be noted that the ‘Australian Capability’ column in Table 19 only reflects the space capabilities within the 46 companies interviewed for this study rather than a comprehensive picture of Australian Space Capabilities. As previously discussed APAC targeted companies for interviews that had primary capabilities in the first four segments (‘Space Systems’, ‘Launch Systems’, ‘Ground Systems’ and ‘Space Enabled Services’). APAC did not target companies with primary capabilities in ‘Space Support Services’, ‘Space Research & Development’ or ‘Space Education & Training’ but did record company capabilities in these areas when they emerged in the interviews.

This is relevant for the proper interpretation of the categories which record no capability, particularly in the ‘Space Support Services’ segment. Table 19 indicates no capability in the ‘Legal Services’ category under the ‘Space Support Services’ segment. This is because none of the 46 companies interviewed has legal services as a revenue producing capability (although some internal legal departments have space law and contract capabilities). APAC did not target Legal firms for this study hence the expected result however APAC is aware that there are several legal firms with space law and contracts capability within Australia.

The situation is similar for the ‘Insurance Services’ category. Again APAC did not target these companies hence the expected result of “No Capability” from the 46 interviewed companies. However APAC is aware that some brokerage firms do have space insurance capability although there is currently no space underwriting capability in Australia.

The situation is slightly different for the ‘Launch Systems’ segment. APAC did target companies in this segment and can safely say that there are currently no companies offering launch services in Australia.

Table 19 shows that the 46 companies interviewed have capabilities in every key space capability category except the three just discussed. The rest of this chapter will explore these space capabilities in more detail.

5.3 The Breadth of Australian Companies’ Space Capabilities

5.3.1 Overview of Australian Company’s Space Capabilities

In considering this analysis of Australian space capabilities it must be remembered that the methodology used for this study was intended to reveal the breadth of Australian space capabilities and was not intended to be an exhaustive review of all companies with such capabilities. While Australian companies have capabilities in all seven primary segments of space capability a more detailed review of those capabilities reveals that they tend to be confined to certain niche sub-categories of capability. To understand the extent of Australian space capabilities APAC has analysed them by segment of capability. Throughout the following sections the references to the number of companies with particular capabilities is a reference to the number from amongst the 46 companies interviewed as part of this study.

In order to develop a more detailed understanding of Australian space capabilities APAC developed a three-tiered model for space capabilities. Tier 1 is the broad segments of space capability discussed at the beginning of this chapter. Tier 2 is the next level of detail within each segment and labelled as categories within the segment as displayed in Table 18. Tier 3 is the more detailed subcategories of space capabilities contained within each category. These space capability categories and sub-categories are guided by the Technology Tree and Product Tree used by the European Space Agency (ESA) for categorising European space activities but adapted by APAC to more suitably capture the Australian space scene. In particular the ESA Product Tree is weak on the ‘Space Enabled Services’



segment hence APAC has developed more detailed categories and sub-categories to more accurately capture these capabilities.

APAC developed this three-tiered model into a space capabilities template for use in the company interview process. During the interviews APAC took the company systematically through the template to capture space capabilities at the segment, category and sub-category levels. The following sections focus on the company space capabilities identified through this process from the segment level to category level and down to the most detailed sub-category level. This approach leads to a much more detailed understanding of space capabilities of the interviewed companies at the detailed sub-category level.

5.3.1.1 Space Systems

Nearly one-third of the companies interviewed for this study reported capabilities in the ‘Space Systems’ segment with an interesting range of capability. At one extreme a number of Australian companies are sophisticated owner / operators of communications satellites and many companies have capabilities in ‘Systems Engineering and Technical Support Services’ for space systems including environmental testing. At the other extreme there are small pockets of capability for supply of space components and subsystems. However, while the overall number of companies with component and subsystem supply capabilities is relatively small among the companies interviewed some of these companies are already making substantial contributions to the global space supply chains. Based on the interviews Australian companies have the makings of a suitable base for broader participation in the development of ‘Space Systems’ particularly at the smallsat and cubesat level. Table 20 depicts the detailed sub-categories of space capabilities that the companies interviewed companies reported in the ‘Space Systems’ segment.

Table 20 Capabilities of Australian Companies in the Space Systems Segment

Category Sub-Category Number of Companies With Capability Amongst Companies Interviewed

Space systems prime / Systems integration

Satellite manufacture 2

Platform manufacture 1

Space subsystems supply Instruments 2

Payloads 4

On-board computing 2

Actuators 1

Power generation 0

Thermal control 0

Communications subsystems 1

Space component and material supply

Electronic components 3

Optical components 3

Solar cells 0

Fasteners & connectors 1

Advanced materials 2

Coatings 0

Software algorithms and embedded software 2

Space qualified testing and facilities

Thermal & mechanical analysis 2

Vibration testing 1

Thermal vacuum testing & support 1

Testing Support Services 3

System engineering and technical support services

Systems engineering 11

Mission and orbit analysis 8

Computer modelling 8

Product Technical Support 5

Satellite owner / operator Satellite owner / operator 6

Other Sales & technical support for satellites 1



Of the 46 companies interviewed 15 reported that they had capabilities relating to space systems. These 15 companies were comprised of four multinationals; one company with overseas parent; two large corporations; five SMEs; two entrepreneurial companies and one university owned company.

The most prominent areas of capability within the ‘Space Systems’ segment are in the category of ‘System Engineering and Technical Support Services’ with eleven companies describing capabilities in the sub-category of ’Systems Engineering’, while eight stated that they had capabilities in ‘Mission and Orbit Analysis’, and eight with ‘Computer Modelling’ capabilities relevant to space systems. Two of these companies own and operate their own satellites and these capabilities are a natural part of the skill base required for such operations. Three of the companies, each of which are part of larger overseas owned corporations, use their Australian capabilities to participate in Australian projects as an systems integrators and providing technical support. One of these companies uses Australia as their regional headquarters for the Asia-Pacific region and actively markets space services into this region from Australia. One company has developed a satellite system monitoring capability that can rapidly isolate the root cause of in-orbit system faults which has potential applications throughout the satellite industry. Another company has significant space qualified testing facilities and capabilities that are used in the testing of virtually all Australian space hardware and cubesats, while another has capabilities to provide mission support to customers flying payloads on their cubesats. One company is a specialist radio frequency (RF) component manufacturer that has experience in building RF communications subsystems for spacecraft; another has established itself as an authorised engineering authority in Satcoms with specialist skills in design, analysis, feasibility studies and implementation and testing; while another has capabilities in building optical components and payloads.

There is also a strong representation of companies that either own or operate satellites. Five companies reported satellite ownership or operation while another company is gearing up to enter this field. Two of these companies own and operate their own telecommunications satellites while a further two operate telecommunications satellites that are owned overseas. Of the remaining two companies one is an SME operating a satellite to support calibration of ground systems while the other is an entrepreneurial company seeking to develop and deploy a cubesat bus to help clients get flight heritage for components and instruments. Of the two companies operating Australian owned satellites one is the dominant player in satellite communications in the Australian & New Zealand markets, while the other is in the process of establishing wholesale high speed consumer broadband services to the entire country. Of the two companies operating satellites owned overseas one mainly serves the Pacific Islands with satellite communications, while the other provides headquarters for services to Oceania and provides satellite communications services to Australia, New Zealand, Papua New Guinea and the Pacific Islands.

Five companies reported capabilities in supplying space subsystems including payloads, instruments and on-board computing – capabilities that are applicable in the building of small satellites and cubesats. Four of these companies reported capabilities in providing satellite payloads including design, development and integration including instruments. These capabilities are generally focused on small payloads with RF or optical instruments or communications subsystems. One company has developed an actuator system to assist in the de-orbiting of cubesats which has gained support from NASA for the testing of this system. This company is one of only two companies outside the US to have gained access to NASA’s Flight Opportunity Program.

Six companies reported capabilities in ‘Space Components and Materials Supply’. Electronic and optical components were the key areas of Australian capability with three companies reporting capabilities in each of these areas. One company has significant expertise in the ‘Space Components’ category manufacturing high performance, high reliability radiation hardened semiconductors that are used widely in most space programs globally.



Australia also has capabilities for the environmental testing and pre-flight check-out of space systems with three companies reporting capabilities and facilities in this sub-category. One of these companies is currently involved in nearly 20 international programs to build and test space instruments and telescopes playing a crucial role in these programs.

Case Study 1 – Space Systems: Silanna Semiconductor

When Australians hear of the latest exploits of the NASA rovers on Mars very few realise that at the core of these rovers are special semiconductors that were made in Australia. And if people watched the news that came via a broadcast from NASA few also realise that the satellite used for that TV broadcast also contained special semiconductors made by Australian company Silanna Semiconductor.

Silanna is a semiconductor manufacturing company using a silicon-on-sapphire (SoS) process technology for high-performance RF-Complementary Metal-Oxide Semiconductor (CMOS) applications. It is a vertically integrated company that can design a product, manufacture the chips on its own process line, test and qualify the product, as well as provide the route to market.

Semiconductors have been produced in Australia for nearly 50 years and one of the biggest producers was the old AWA which was the genesis of modern day Silanna Semiconductor. When AWA was in financial trouble in the 1990’s it sold its semiconductor division to a US company which eventually sold the Australian operations to another US company Peregrine in 2000. Peregrine was having trouble finding a source for SoS chips which are particularly prized for space applications because of their excellent radio frequency capabilities and their radiation hardness – their ability to remain largely unaffected by the high radiation doses and cosmic rays in the space environment. Peregrine asked their new Australian facility if they could make SoS chips. The Australians set up the process and had it working within 4 months – much faster than anyone had expected.

For a long while the Australian operation was the only semiconductor foundry in the world that produced SoS semiconductors and through Peregrine provided SoS chips to the heavyweights of the satellite industry including NASA, JPL, Boeing, Lockheed Martin, Honeywell, Northrop Grumman, Rockwell Collins, General Dynamics, Alcatel, Astrium and Thales. The Australian semiconductor foundry was certified as a US Defense Micro Electronics Activity (DMEA) trusted facility allowing it to produce products for US Defense applications. Today it remains the only semiconductor production DMEA trusted facility outside the US.

In 2008 the Australian semiconductor foundry was acquired from the Americans by Australian owned Silanna. Silanna invested more than $30 million into a unique compound semiconductor facility at the Sydney foundry to keep Silanna at the cutting edge of semiconductor solutions meeting the most stringent standards. Silanna's SoS foundry continues to ship hundreds of millions of devices around the world to a wide range of customers in consumer, industrial, medical, telecommunications and aerospace/defence markets.

Silanna now has nearly 100 staff (half of which are highly trained engineers) in Brisbane and Sydney, has opened a US office in San Diego and established satellite offices and design centres in London, Taiwan, Korea and North Carolina. Silanna’s semiconductors are now found in Deep Space Probes, satellites, ground stations, Very Small Aperture Terminal (VSAT) dishes, RF switches, cable repeaters, cable headend systems, digital televisions, digital tuners and smartphones worldwide. Silanna is an example of how high tech manufacturing



can succeed in Australia and how its specialist high quality products can find their way into space supply chains around the world.

5.3.1.2 Launch Systems

While nearly 25% of the interviewed companies reported capabilities in the segment of ‘Launch Systems’ this is the area where Australia has the least representation of space capabilities. Although Australia has been a significant user of launch services it has essentially no orbital or sub-orbital launch capability of its own even though it has some capabilities in this area. The key area where Australian companies do have significant capability in this segment is with regard to technical support services for launch activities including some Australian companies which provide services to international launch companies for launch vehicle tracking. Table 21 depicts the detailed sub-categories of space capability that Australian companies maintain in the ‘Launch Systems’ segment.

Table 21 Capabilities of Australian Companies in Launch Systems

Category Sub-Category Number of Companies With

Capability Amongst Companies Interviewed

Launch services Orbital launch 0

Sub-orbital launch 0

Launch site development 0

Launch vehicle manufacturing and assembly

Hardware 2

Systems 0

Software 0

Launch vehicle component and subsystem manufacturing

Hardware 2

Subsystems 1

Software 0

Components 2

Launch support services

Launch support equipment 0

Transport 0

Propellant 1

Licensing 2

Storage 1

Facilities 1

Range management 0

Range safety 0

Range tracking 1

Range communications 0

IT & software 1

Tracking of Launch Vehicle 5

Tracking of Space debris for launch safety 1

Orbit determination of spacecraft 1

Other Static Testing of rocket motors including design & construction of test rigs 1

Source launch services for clients 2

Sales & technical support for launch services 1

Of the 46 companies interviewed ten companies reported having capabilities that fall within the segment of Launch Systems. Of these ten companies two are multinationals; one is an international



company with an overseas parent; one is a large corporation; five are SMEs; and one is an entrepreneurial company.

The bulk of the capability in this segment is in the area of ‘Launch Support Services’ with the greatest concentration of capability being in the area of launch vehicle tracking where five companies reported this capability. In some respects this capability is also included in the ‘Ground Systems’ segment but in this case the companies interviewed specifically identified the fact that their capabilities are used to support launch activities in other parts of the world due to the unique positioning of facilities in Australia for early acquisition of satellites 30-40 minutes after launch.

One company specifically identified capabilities in tracking orbital debris for launch safety as well as orbit determination for spacecraft – capabilities with growing significance given concerns about orbital debris proliferation.

One company identified capabilities in Launch Vehicle Subsystems as well as Range Tracking while two companies have capabilities in sourcing of Launch Services and assistance with overseas Launch Licensing.

In the realm of ‘Launch Vehicle Manufacturing & Assembly’ two companies reported capabilities in the provision of hardware and the same two companies also reported capabilities in the category of ‘Launch Vehicle Component and Subsystem Manufacturing’, specifically in the sub-categories of ‘Hardware’ and ‘Components’. These two companies have supplied components to the Australian scramjet test programs including nosecones and elements of the scramjet engine.

One of these companies also builds rocket hardware including solid rocket motors, frame and igniter, casings and propellant which has attracted international interest. This same company also reported capabilities in ‘Launch Support Services’, namely in the ‘Propellant’ and ‘Storage’ sub-categories, as well as having capability in the area of static testing of rocket motors including design and construction of test rigs. Other capabilities were identified in ‘Launch Support Services’ including a company that has capability in ‘Launch Support Facilities’ and ‘IT & Software’, while another company identified capability in ‘Sales & Technical Support for Launch Services’.

Interestingly one company noted that it is exporting GPS systems to Rocket Lab in New Zealand which is building a new launch system specifically targeting launch services to the smallsat/cubesat market with commercial service expected to start in 2016. Clearly an Australian company is already starting to become part of this specific supply chain in the ‘Launch Services’ segment.

Case Study 2 – Launch Systems: Teakle Composites

It is pretty unusual to walk into the main conference room of an Australian company and be surrounded by a collection of rocket nose cones, rocket casings and solid rocket motors all of which were made on site. But that is the experience of a visit to Brisbane based Teakle Composites.

The high cost of access to space remains one of the constraining factors for the space industry. It costs around USD $5,000 – 10,000 per kg to put a payload into Low Earth Orbit and more than double that to reach Geostationary Orbit. Launch costs are driven by many factors among which is the fact that the mass of the rocket structure and propellant systems that must also be lifted to space as they propel and support the satellite until it reaches orbit. Significant reductions in the mass of the launch vehicle will translate into lower costs to orbit. Fibre composite materials (glass fibre and carbon fibre) have a higher strength to weight ratio than aluminium or steel and are increasingly used in aerospace applications. In 2007 Teakle Composites was formed to develop and manufacture fibre composite products



and to specifically test whether this light weight composite technology is suitable for solid rocket motors.

Teakle Composites assembled a team of mechanical and mechatronic engineers, acquired and installed composite fibre filament winding equipment which produces precise high performance components and commenced work to design, build and test solid rocket motors and propulsion using fibre composite technology. A key question was whether the fibre composite materials could withstand the extreme temperatures and pressures in a solid rocket motor. But the design and manufacture of the rocket motor was only a part of the project. In order to test the rocket motor design Teakle Composites had to build all the other elements of the system including developing the solid rocket casing, developing the solid rocket propellant, developing a system to mix and then cast the solid propellant into the rocket casing, developing the propellant igniter, designing and building the rocket test facilities to secure the rocket and measure thrust. Teakle Composites began building all the pieces of a small solid rocket launch vehicle.

The results have been remarkable. Teakle Composites has produced a successful 8 inch diameter solid rocket engine using fibre composite materials without tailored nozzle shaping that compares favourably with similar solid rocket motors in terms of thrust and specific impulse with a loaded mass of 66 kg and an empty mass of only 6 kg. These results attracted the attention of the German Space Agency DLR which is exploring the development of a small launch vehicle to serve the growing cubesat launch market. Teakle Composites and DLR have been in discussions with Teakle Composites providing rocket motors to DLR for testing. Building on this success Teakle has commenced development work on a larger and higher performance fibre composite solid rocket motor.

Teakle Composites’ expertise in fibre composite products was also invaluable for the scramjet research projects being conducted in Australia. Teakle Composites has been very active in the scramjet programs undertaken at the University of Queensland and by the Defence Science and Technology Organisation (DSTO) (now known as the Defence Science and Technology Group – DSTG) and built the hypersonic nose cones for the scramjet test vehicles on the HyCause, HiFire and Scramspace programs. Also on the Scramspace program Teakle Composites produced high strength, high temperature ablative carbon fibre scramjet engine intakes to very tight tolerances capable of maintaining stability and strength at rocket speeds of nearly 10,000 km/hr. Teakle Composites also designed and manufactured the hypervelocity wind tunnel nozzle used on the University of Queensland’s X3 Expansion Tube wind tunnel capable of withstanding expanding gas flowing faster than 36,000 km/hr used for experiments to test scramjet design and atmospheric re-entry.

Teakle Composites expertise also extends to more down to earth projects as well particularly for the mining industry. They have developed a lightweight corrosion resistant fibre composite pipe system for underground coal mines which is superior to the normal steel pipe systems in corrosive environments. They have developed a fibre composite drill rod and casing-while-drilling technology which enables smaller, lower power drill rigs and the capability of obtaining measurement data while drilling while simultaneously lining the bore hole during drilling. Teakle Composites has also developed an economical, high crush strength fibre composite borehole liner which is in high demand for the coal seam gas industry with over 40,000 metres of this product supplied in 2015. These products are all direct descendants of the rocket motor casings developed at Teakle Composites.

This enterprising Australian start-up company has proven its capabilities in designing building and testing solid rocket motors and rocket casings and nose cones. Based on this beginning it now employs 15 staff and uses its expertise in composite technology to serve



industries ranging from aerospace to mining. Teakle Composites is keeping a very close eye on the opportunities emerging for the burgeoning cubesat launch industry. With its capabilities and with the right conditions and partners Teakle Composites is poised to help Australia play a significant role in this growing space industry.

5.3.1.3 Ground Systems

Australia has a long history of building and operating ground stations for the likes of NASA, ESA and the satellite communications operators Intelsat and Inmarsat that started in the 1960’s. So it is now surprise that the segment of space capabilities relating to ‘Ground Systems’ is one of the two key areas where Australian companies have significant capabilities. Nearly 85% of the companies interviewed for this study reported capabilities in the ‘Ground Systems’ segment. Clearly there is significant capability within this segment. Similar to the ‘Space Systems’ segment Australian companies’ capabilities in ‘Ground Systems’ is concentrated in the systems engineering, systems integration, installation, operation and technical support areas and Australia has a large number of prime contractors in this field. Australia also has significant capabilities in the manufacture of ground systems as well as a number of companies that supply ground segment equipment. Australia has a large number of ground station operators and it is interesting to note that at least one of the interviewed companies has relevant capability in every sub-category in the ‘Ground System’ segment. Clearly this is an area of longstanding strength for Australian space capabilities. One of the growing areas in the ‘Ground System’ segment is the installation and maintenance of GNSS reference stations. With 22% of the interviewed companies reporting capability in this area it is clear that Australia has strong capability in this emerging field as well. Table 22 depicts the detailed sub-categories of space capability that the interviewed companies maintain in the ‘Ground Systems’ segment.



Table 22 Capabilities of Australian Companies in the Ground Systems Segment


Ground Segment Prime / System Integration

Ground segment prime contractor / integrator 22

Facility management 14

Ground Segment Subsystem & Equipment Supplier

Subsystem manufacturer 8

Subsystem supplier 11

Modem manufacture / supply 4

IT & software 13

Custom communication terminals 1

Meteorological stations 1

Training and simulations 6

Antenna / Ground Station Component or Material Supplier

Connectors 2

Cabling 2

Integrated circuits 3

IFL links 3

Firmware 8

System Engineering and Technical Support Services

Systems engineering 25

Design and specialist consultancy 25

Trade-off analysis 22

Project management 24

Procurement support 24

Installation and testing 23

Product Technical Support 14

Ground Station / Teleport Owner / Operator

Satcom/EO stations 11

GNSS Reference Station Network 3

Tracking Telemetry & Command Operations

Satellite Command and control 7

Launch & early orbit tracking 8

Performance analysis and optimization 5

GNSS Reference Stations & Fixed GNSS Receivers

Installation and maintenance of GNSS reference stations 9

Supply of GNSS reference stations & fixed GNSS receivers 5

Software Support for GNSS Reference Stations 7

Installation & Maintenance of Fixed GNSS receivers 10

Other Evaluate feasibilty of EO receive antenna 1

Space Situational Awareness ground facilities & support 3

Of the 46 companies interviewed 38 companies reported having capabilities that fall within the Ground Systems segment. Of these 38 companies ten are multinational corporations; four are international companies with overseas parents; five are large corporations; sixteen are SMEs; one is a university owned company; and two are entrepreneurial companies.

The most extensive Australian capabilities in this segment are in the ‘Systems Engineering and Technical Support Services’ category where 27 companies reported capabilities. Between 22 and 25 companies identified capabilities in the sub-categories of ‘Systems Engineering’, ‘Design and Specialist Consultancy’, ‘Trade-off Analysis’, ‘Project Management’, ‘Procurement Support’ and ‘Installation and Testing’. This high level of activity correlates closely with the fact that 22 companies also identified having capability as a ‘Ground Segment Prime Contractor / Integrator’ in the ‘Ground Segment Prime / System Integration’ category. This indicates that Australian companies have capabilities in the entire provision of ground systems from prime contractor through the systems engineering and technical support skills necessary for this work. This work is not limited to Australia as many companies reported using their capabilities in the establishment of ground systems overseas.



There is also significant manufacturing capability in the ‘Ground Systems’ segment. Eight companies reported that they are a ‘Subsystem Manufacturer’ while 13 companies provide ‘IT & Software’ for ground systems. Another eight companies provide ‘Firmware’ for ground systems mostly developing firmware for GNSS ground stations and in many cases for large multinational companies selling GNSS systems worldwide. There are also 11 companies supplying various subsystems for ground stations some of which are produced locally and some of which are sourced from overseas. Most of the activity in this area is for the satellite communications sector or increasingly the GNSS ground station sector. It is interesting to note however that one of the companies interviewed designs, develops and manufactures complete earth station systems to serve the meteorological industry and is active selling these systems internationally.

It should be noted that the relatively low number of companies in the ‘Modem manufacture/supply’ subcategory is a bit misleading. While there are not many companies actually manufacturing modems in Australia APAC is aware that there are many modem suppliers in this country who were simply not among the companies interviewed for this study. It is clear from the interviews that all the elements for developing, integrating, installing and operating ground stations are available within Australian companies.

One of the key drivers behind the high level of capability in the ‘Ground System’ segment is the extensive use of satellite communications in Australia which is in part driven by its unique demographics and global geographic location. Ground systems are essential for satellite communications and it is no surprise that over 30% of the companies interviewed, 14 companies , reported capabilities in the ‘Ground Station /Teleport Owner / Operator’ category with 11 maintaining Satcom/EO earth stations. Another corollary of Australia’s sophisticated involvement in owning and operating satellites (described in the section on ‘Space Systems’) is the fact that Australian companies have significant capabilities in the area of ‘Tracking Telemetry & Command Operations’. Seven companies have capabilities in ‘Satellite Command and Control’ and eight companies report capabilities in providing ‘Launch and Early Orbit Tracking’. Many of these companies are well known internationally for these capabilities and have a track record of winning contracts to supply these services to international customers.

Also of note is the significant capability shown in the area of ‘GNSS Reference Stations & Fixed GNSS Receivers’. The strong activity in this area in the segment of ‘Space Enabled Services’ to be described in the next section leads to the significant capability that Australian companies have in the area of supplying, installing and supporting GNSS receivers and reference stations.

Case Study 3 – Ground Systems: Electro Optic Systems

Australia has a long and proud history as a host and operator of major ground stations for the space industry. Initially chosen as a ground station location by NASA due to its suitable geography to track spacecraft travelling over the Indian and Pacific Oceans Australia has developed significant skills in ground station operation and today is a preferred location for ground stations due as much to its ground station expertise as for its geography. Today NASA and ESA have each chosen Australia to host and operate one of only three worldwide ground station sites for their respective Deep Space Networks (i.e. Australia hosts two of the six combined sites of these networks). Australia also hosts and operates facilities for the Japanese and Chinese Space Agencies and for the US Department of Defence, and operates a large number of stations to monitor and control commercial satellites and an even larger number of teleports for satellite communications. Given this strong heritage in ground stations it is fitting that an Australian company, Electro Optic Systems (EOS), is developing and operating critical new ground station technology here in Australia.



Canberra based EOS was established in 1983 to provide advanced electro-optics products including lasers, optronics, pointing and ranging software and electronics, gimbals and mounts, telescopes and precision mechanisms for the aerospace and defence industries. The EOS Space Systems Division specialises in the design and manufacture of electro-optic systems for satellite and space debris tracking. Over the years EOS has developed its capabilities in lasers, adaptive electro-optics, tracking mechanisms, mounts and laser ranging with astrodynamic analysis into a laser based ground-to-space tracking system that adds significant new capabilities to current radar based space debris tracking systems. EOS is now a world leader in Space Situational Awareness (SSA).

Space Situational Awareness is the ability to track and predict the orbit and hence physical location of natural and manmade objects orbiting the earth. This includes operational satellites but also space debris – the detritus left in space which includes spent rocket stages, spacecraft no longer operational, debris from space missions such as explosive bolt fragments released during stage separation and fragmentation debris from collisions or explosions of objects in space. Space debris is a growing problem for access to and operation in space. According to NASA there are more than 500,000 particles of space debris larger than 1 cm in low earth orbit all of which pose a threat to satellites in the event of a collision. NASA, other agencies and launch providers have programs to shift launch windows or manoeuvre satellites to avoid debris. NASA moves the International Space Station (ISS) on average about once per year to avoid orbital debris collisions and in 2012-13 alone there were four emergency evacuations of ISS astronauts to the Soyuz escape capsule due to unpredicted orbital debris. SSA has become an essential element for access to and operation in space.

EOS has developed sophisticated software control systems for autonomous laser ranging and laser tracking. It has produced adaptive optics that enables both imaging of orbiting bodies and for enhancing the range of laser tracking. It has developed laser ranging systems for geodetic calibration of satellites with picosecond precision and millimetre level orbital accuracy. It has also developed software tools for modelling astrodynamic processes, which combined with its laser tracking accuracy, enable orbital projections that are 100-1,000 times better than traditional techniques. These capabilities have developed EOS into a world leader in Space Situational Awareness.

EOS is now a publically listed company on the Australian Stock Exchange operating two research centres in Australia with production facilities in Australia and the USA. EOS Space Systems division now employs 44 staff and produces electro-optical devices and mounts, satellite laser ranging facilities, telescopes and observatory systems for world export in addition to its SSA facilities and services. It has recently decided to expand its production of space equipment in Australia and to relocate some of its US production back into Australian facilities.

EOS has invested over $100 million in space research and operational infrastructure for SSA in Australia and its reputation as a world leader in SSA continues to grow. EOS periodically supplies SSA evaluations for various launch providers to help them determine a clear launch window. EOS operates the only non-US sensor qualified for SSA operations by the USA. EOS has concluded a strategic partnership with US aerospace giant Lockheed Martin to develop a space debris tracking facility in Western Australia and to commence the establishment of a network of SSA facilities worldwide. EOS is also a key partner in the recently formed Cooperative Research Centre (CRC) for Space Environment Management (SEMCRC) run by the Space Environment Research Centre (SERC) which brings together expertise from leading universities, international space agencies and commercial research providers to analyse and



devise solutions to mitigate and ultimately remove the risk of space debris collisions. EOS has contributed $17 million towards the establishment of SERC adjacent to its offices at Mt Stromlo, Canberra and is heavily involved in directing the research programs and providing support for the project.

Space debris is a growing concern for access and operation in space. EOS is an example of an Australian company with sophisticated ground systems and techniques that is at the forefront of worldwide efforts in SSA to characterise and solve this problem – thus continuing the long tradition of Australian expertise in operation of ground systems to support space activities.

5.3.1.4 Space Enabled Services

‘Space Enabled Services’ is the largest sector of the space industry worldwide and it is also the largest sector of the space industry within Australia. Over 90% of the companies interviewed for this study have space capabilities in the segment of ‘Space Enabled Services’. Given the critical importance of ‘Space Enabled Services’ to Australia as the result of its unique demographics and geography it is not surprising to find that Australian companies have significant capabilities in this segment. Australia has significant capabilities in the three major areas of ‘Space Enabled Services’: ‘Satellite Communications’, ‘Earth Observation’ and ‘PNT’ as well as the technical support capabilities that serve these areas. Australia has a long track record since the 1960’s of capability in the satellite communications sector which it maintains today. Similarly Australia also has longstanding capability in Earth Observation techniques and uses with significant users in the mining and environment sectors. One of the fastest growing sectors commercially in recent years has been the PNT area. Australia has strong capabilities in this and is one of the few countries that has access to all emerging regional GNSS constellations which creates a fertile environment for application development in this area. Table 23 depicts the detailed sub-categories of space capability that the interviewed companies maintain in the ‘Space Enabled Services’ segment.



Table 23 Capabilities of Australian Companies in the Segment of Space Enabled Services

Category Sub-Category Number of Companies With Capability

Amongst Companies Interviewed

Satellite Broadcast Service Providers

Direct to home broadcasting for Free to Air TV 4

Subscription TV 3

Radio 2

Satellite based program reception / distribution 6

Satellite news gathering 2

Satellite Communications Service Providers

Telecommunications carrier 9

Telecommunications reseller 9

Private network / VSAT service provider 11

Broadband & data network provider / reseller 13

Bandwidth provider & broker 5

User Equipment manufacturer

VSAT / DTH dish manufacturer / integrator 2

VSAT / DTH subsystem 2

Meteorological earth stations 1

Component manufacturer 1

Satellite modem manufacturer 0

Satellite phone handset manufacturer 0

Integrated circuit component manufacturer satellite phones 1

GPS equipment manufacture & integration 3

Integrated circuit component manufacturer GNSS systems 1

User Equipment supplier

VSAT / DTH dish supplier / installer 10

Satellite modem supplier 10

Satellite phone handset supplier 3

Meteorological systems supplier 1

High End GNSS Equipment supplier 7

Earth Observation Services & Applications

Satellite imagery providers 4

Earth observation data processing / archiving 9

GIS & earth observation data integration & analysis 7

Software development for space data manipulation 7

Imagery Integration with GIS & other data 7

Storage & Delivery platforms for EO imagery 4

Broker of EO data & services 3

Satellite Navigation Services & Applications

Satellite navigation service providers 3

Provision / exploitation of sat based location data 13

GIS data integration & analysis 10

IT & software for satnav data manipulation 12

Callibration support for GNSS satellites 2

Technical Support Services

System architecture design 23

System analysis 20

Technical support for VSAT / private networks design / implementation 17

Technical consulting 21

Technical Support for EO & GIS acquisition and manipulation 8

Support for GNSS applications including asset optimisation 8

Of the 46 companies interviewed 42 companies reported having capabilities that fall within the segment of Space Enabled Services. Of these 42 companies ten are multinational corporations; five



are international companies with overseas parents; five are large corporations; 21 are SME’s; and one is a university owned company.

In keeping with the trends identified in earlier segments the greatest areas of strength for Australian companies in this segment are in the provision of services and applications rather than in the manufacture or supply of user equipment.

Australia has significant capabilities in each of the three service domains of ‘Space Enabled Services’ namely ‘Satellite Communications’, ‘Earth Observation’, and ‘PNT’. Of the 46 companies interviewed over half had capabilities in Satellite Communications, over one quarter had capabilities in Earth Observation and approximately 40% had capabilities in PNT. Satellite Communications is the largest area of the space industry worldwide and this is also true in Australia in both revenue and level of activity. In the area of satellite communications 15 companies reported capabilities as ‘Satellite Communications Service Providers’. Within this category 13 of the companies interviewed have capabilities in the provision of broadband and data networks, 11 companies provide private networks and VSAT services and nine companies are telecommunications carriers while another nine are satellite telecommunications resellers.

‘Satellite Broadcast Service Providers’ are another major category of ‘Space Enabled Services’ globally and Australia also has its share of these capabilities among the companies interviewed. Only six of the companies interviewed identified themselves in this category. APAC is aware that there are more companies providing these services in Australia who were not interviewed for this study so these low numbers understate the actual quantity in this category (as is the case for all categories in this study as this is not a comprehensive study). The companies interviewed indicate capability in all sub-categories under ‘Satellite Broadcast Services’ including six companies providing satellite based program reception and distribution. Direct to Home TV is the largest satellite communications area worldwide by far based on revenue and number of customers. Australia has strong capabilities in this field with four companies providing Direct to Home Free to Air services via satellite and three companies providing platforms for Direct to Home subscription TV via satellite. Two companies provide radio services via satellite and two other companies have capabilities in satellite news gathering for broadcast.

A key part of the satellite Direct to Home TV market is the User Equipment located at the customer premises to deliver the service, specifically the small satellite dish, the modem and the set-top box. There is not much local manufacturing in this area with only two interviewed companies having some capability in VSAT dish integration and two others with some capability in VSAT subsystems and no satellite modem manufacturers or satellite phone handset manufacturers among the interviewed companies. However there are 19 companies active in the ‘User Equipment Supplier’ category with ten companies providing and installing VSAT dishes, another ten companies providing satellite modems and seven companies providing high-end GNSS equipment.

Satellite communications is the major space activity in Australia so it is not surprising to find considerable local capability. Like the ‘Ground Systems’ segment this is a vertically integrated sector with all capabilities needed to provide the service available among the companies interviewed for this study. These capabilities are not limited to Australia as many of these companies are actively involved in providing satellite communications throughout the Asia-Pacific.

The Earth Observation area is another sector with considerable local expertise as 12 of the interviewed companies reported capabilities in this area. Four of the companies interviewed are providers of satellite imagery including a large multinational which is a provider of the primary imagery and local resellers who source the imagery from the primes and provide it to their customers usually with value-added elements. The most prolific area of capability is in the area of ‘Earth Observation Data Processing and Archiving’ with nine of the companies interviewed reporting



capability in this sub-category. The ability to integrate and analyse earth observation data and GIS data is becoming crucial in this industry and seven of the interviewed companies reported capabilities in this sub-category. The ability to process and integrate the large earth observation images and data sets into a suitable format for the client is a key element in the growing use of earth observation data and seven of the interviewed companies reported capability in software development for space data manipulation to address this. One of the emerging areas in the use of earth observation data is the integration of client data as well as GIS data into the image set. Seven of the interviewed companies have capabilities in this area while another four reported capabilities in the related area of developing storage and delivery platforms for earth observation data.

Earth Observation data, like the other areas of ‘Space Enabled Services’, is increasingly moving to provide imagery in formats and delivery systems for consumer use. This is a growth area for earth observation imagery and many of the interviewed companies are using their capabilities in data integration and software development to address this new and growing market.

Satellite PNT services have been one of the key areas of major growth for the space industry over the last 15 years. Originally based on the US GPS constellation, there are now four major GNSS constellations being established: the US GPS system, the Russian Glonass system, the European Galileo system and the Chinese Beidou system. There are also two regional systems being developed: the Japanese Quasi-Zenith Satellite System (QZSS) and the Indian Regional Navigation Satellite System (IRNSS). Australia is one of the few countries that can access all of these systems which makes Australia an ideal place to develop GNSS services. Australian companies are responding and ‘Satellite Navigation Systems and Services’ are becoming a key Australian strength in ‘Space Enabled Services’ with 18 of the interviewed companies reporting capabilities in this area.

The growth in Satellite PNT services is taking place on two fronts: the precision location and timing market and the consumer market and the companies interviewed for this study are active in both markets. The most prominent sub-category among the interviewed companies is the ‘Provision and Exploitation of Satellite Based Location Data’ with 13 companies reporting capability in this area. These capabilities are being used to provide services ranging from precision agriculture and precision mining, to construction to tracking pets. Another prominent sub-category is the integration of GIS data with the positioning data to obtain not only accurate position but the location of specific assets or features relative to the location. Ten companies reported capabilities in this area providing services ranging from accurate location of vessels near offshore platforms to tracking all assets on a mining site to maintaining constant tractor lines in a farm field. Three interviewed companies actually provide GNSS correction services to provide highly accurate positioning including one company that has developed a new locally based positioning system that is gaining tremendous interest in the USA.

Creating the algorithms, software and firmware to incorporate the position and timing information is crucial to accurate precision positioning. Australia has significant capabilities in this area with 12 of the interviewed companies reporting capabilities in this area. Two major multinational companies maintain development centres in Australia which provide software for major product lines of precision GNSS equipment sold globally to the mining, construction and agriculture industries. Another company has developed and manufactures equipment that detects interference to the GNSS signal enabling the operators of precision equipment to avoid mistakes due to interference.

The PNT market is really exploding globally. Australian companies have significant capability in this field and are already developing significant new technology and services for precision mining, construction and agriculture both domestically and increasingly internationally.

Continuing the trend of the depth of capabilities in service provision and support in previous segments there is an even larger pool of companies with capabilities in the category of ‘Technical



Support Services’ within ‘Space Enabled Services’ with 30 companies reporting capabilities in this area. Most of these companies are active in the satellite communications area with 23 companies reporting capabilities in ‘System Architecture Design’, 20 reporting capability in ‘System Analysis’, 17 with capability in ‘Technical Support for VSAT / Private Network Design / Implementation’, and 21 having capabilities in ‘Technical Consulting’. The Earth Observation and GNSS areas also have considerable support with eight companies having capabilities in ‘Technical Support for Earth Observation & GIS Acquisition and Manipulation’ while eight companies provide ‘Support for GNSS Applications Including Asset Optimization’. Over 60% of the companies interviewed consider ‘Technical Support Services’ in ‘Space Enabled Services’ to be one of their capabilities.

5.3.1.5 Space Support Services

It is important to note that the context of the information for the next three segments- ‘Space Support Services’, ‘Space Research & Development’, ‘Space Education & Training’ - is slightly different from the segments discussed above. With the previous segments – ‘Space Systems’, ‘Launch Systems’, ‘Ground Systems’ and ‘Space Enabled Services’ – APAC specifically researched and targeted companies with capabilities in those segments. In contrast APAC specifically did not target companies with capabilities in ‘Space Support Services’, ‘Space Research & Development’, and ‘Space Education & Training’. So while these segments were not targeted APAC did record any capabilities in these segments reported by the interviewed companies. The fact that these segments were not targeted certainly means that some known areas of capability in these segments were not captured in this study. However the surprisingly strong response in these three segments in spite of not being targeted shows the importance attributed to these segments by the interviewed companies.

While not as prominent or obvious as the aforementioned segments of space capability the segment of capability encompassing ‘Space Support Services’ is actually an important aspect of the space industry and an area where Australian companies have considerable capability. One-half of the companies interviewed for this study reported capabilities in ‘Space Support Services’. In many cases it is essential to have local capabilities in the ‘Space Support Services’ category in order to make a project or activity successful or viable. Table 24 below depicts the detailed sub-categories of space capability that the interviewed companies maintain in the ‘Space Support Services’ segment.

Table 24 Capabilities of Australian Companies in the Space Support Services Segment


Legal Services 0

Financial Services Fund Raising support (Ex/Im Bank, VC's) 2

Insurance Services 0

Consultancy Services

Technical consulting in satcoms & ground systems 13

Site inspection survey for satcom dish location 7

Technical consulting in EO 8

Technical consulting in nose cone & rocket nozzle design and static rocket motor tests

1

Technical consulting in GNSS 5

Business consulting for space ventures 1

Market research on space 1

Public relations for space ventures 1



Of the 46 companies interviewed 23 companies reported having capabilities that fall within the segment of ‘Space Support Services’. Of these 23 companies five are multinationals; two are international companies with overseas parents; two are large corporations; 11 are SMEs; one is a university owned company; and two are entrepreneurial companies. What is interesting about the distribution and character of the companies reporting capabilities in this area is that companies of all shapes and sizes consider ‘Space Support Services’ to be an important part of their space capabilities.

It is not surprising that the most prominent sub-categories of capability revealed here are in consultancy services relating to satellite communications, earth observation and GNSS because these companies were targeted based on their capabilities in those segments. Satellite communications as the largest industry sector is again prominent here as 13 of the interviewed companies reported specialist consulting capability in ‘Satcoms & Ground Systems’ while seven reported capabilities in site inspection for satellite dishes. Earth Observation and GNSS services also feature significantly with eight companies reporting capabilities in ‘Technical Consulting for Earth Observation’ and five companies reporting capabilities in ‘Technical Consulting for GNSS Services’.

It is not surprising that none of the companies interviewed have capabilities in the area of ‘Legal Services’ or ‘Insurance Services’ as the entire area of ‘Space Support Services’ was not targeted in this study. APAC is aware however that several Australian law firms do have specialised capabilities in legal services pertaining to international space law, space regulatory issues, and commercial space transactions and contracting. While Australia no longer has space capabilities directly in the ‘Insurance Services’ category it has previously had world leading capability in this area and could readily do so again.

5.3.1.6 Space Research & Development

The number of interviewed companies that actively maintain capabilities in ‘Space Research & Development’ was one of the big surprises of this study. Previous studies have shown that Australia does have significant capability in ‘Space Research & Development’ but generally centred around the academic and research sector hence APAC did not expect significant responses for this segment which was not a targeted segment in a study focused on the corporate sector. The results have been surprising as over 70% of the interviewed companies reporting active capabilities in ‘Space Research & Development’. The theme that emerged is that research & development is a critical component in obtaining a competitive edge in this industry and that a significant majority of the companies interviewed see ‘Research & Development’ capabilities as an integral part of their commercial activities and a key factor in driving their commercial success. Table 25 below depicts the detailed sub-categories of space capability that the interviewed companies maintain in the ‘Space Research & Development’ segment.



Table 25 Capabilities of Australian Companies in Space Research & Development

Category Sub-Category Number of Companies

With Capability Amongst

Companies Interviewed

Space Science Space & atmospheric physics 4

Planetary Science & astrobiology 2

Space based astronomy & astrophysics 2

Space Engineering Communications 8

GNSS Navigation, Equipment & software integration 12

Space Operations 7

Ground systems 14

Spacecraft design 6

Propulsion & rocket design 3

Testing & implementation 8

High Reliability integrated circuit technology for Satcoms, EO, GNSS 1

Space orbital debris determination & mitigation 2

Development of Applications for Space Derived Data

Manipulation and presentation of earth observation data 12

Development of applications using PNT data 16

Space Situational Awareness 4

Satellite communications 2

Research Using Space Derived Data

Research Using earth observation data 5

Research using positioning, navigation & timing data 6

Research using data provided by space instruments 3

meteorological research using space derived data 2

Research using space orbital debris and space situational awareness 3

Space Related Socio/Economic Legal Research

Space Debris issues in Space Law 1

Of the 46 companies interviewed 33 companies reported having capabilities that fall within the segment of ‘Space Research & Development’. Of these 33 companies seven are multinational corporations; one is an international company with overseas parent; two are large corporations; 20 are SMEs; one is a university owned company; and two are entrepreneurial companies.

The dominant areas of capability in the segment of ‘Space Research & Development’ are in the categories of ‘Space Engineering’ and ‘Development of Applications for Space Derived Data’ with 26 companies reporting capability in the former and 24 companies reporting capability in the latter. This highlights the almost equal focus on the emerging twin pillars of the space industry – the engineering aspects and the applications aspects.

Within the ‘Space Engineering’ category the most prominent sub-categories are associated with satellite communications. ‘Ground Systems’ was the most predominant subcategory with 14 companies conducting R&D in this area while eight reported R&D in ‘Communications’. Space Engineering Research & Development is also prominent in the Space Systems area with eight



companies reporting R&D in ‘Testing & Implementation’, seven companies active in R&D in ‘Space Operations’ and six companies reporting R&D in ‘Spacecraft Design’. Many of these companies are focused on the smallsat and cubesat markets. The growing importance of GNSS services is evident here with 12 companies reporting R&D in ‘GNSS Navigation, Equipment and Software Integration’.

The growing importance of ‘Development of Applications for Space Derived Data’ is also evident in these results. The growing importance of GNSS services is also reflected here with 16 companies conducting ‘Development of Applications Using PNT Data’ and a further six companies report ‘Research Using Position, Navigation & Timing Data’. The importance of merging Earth Observation data with other data sets is also evident here with 12 companies conducting R&D into the ‘Manipulation and Presentation of Earth Observation Data’ and a further five companies reporting ‘Research Using Earth Observation Data’.

Another key area of R&D focus is the area of Space Situational Awareness. Four companies are involved in Space Situational Awareness R&D in the category of ‘Development of Applications for Space Derived Data’ while another three companies are ‘Researching Space Debris and Space Situational Awareness’ under the ‘Research Using Space Derived Data’ category. Most of the four companies conducting research in ‘Space and Atmospheric Physics’ in the ‘Space Science’ category are using this for Space Situational Awareness and one company is conducting research on ‘Space Debris Issues in Space Law’ in the ‘Space Related Legal Research’ category.

The evidence shows that the interviewed companies are conducing R&D in all the major growth sectors of the space industry. The interview process revealed that these companies see ongoing R&D as a crucial element for sustained success in the space industry.

5.3.1.7 Space Education & Training

Another surprising finding of the study was the large number of companies that identified ‘Space Education and Training’ as one of their capabilities. Previous studies have shown that Australia has significant capability in ‘Space Education & Training’ that is centred around the academic sector but as with ‘Space Research & Development’ APAC did not expect significant responses for this segment which was not a targeted segment in a study focused on the corporate sector. Again the results have been surprising as over 30% of the interviewed companies reporting active capabilities in ‘Space Education & Training’. While most companies conduct training on their products that type of training is not covered by this segment which is focused on education and training conducted for profit. The evidence from the interviewed companies indicates that a significant number of these companies have capabilities in ‘Space Education & Training’ and use these as an integral part of their commercial activities. Table 26 below depicts the detailed sub-categories of space capability that the interviewed companies maintain in the ‘Space Education & Training’ segment.



Table 26 Capabilities of Australian Companies in Space Education & Training


University Course Provision University Course Provision 1 Vocational or Technical College Course Provision

Vocational or Technical College Course Provision 2

Professional Development Courses Professional Development Courses 8 Commercial Training Courses Commercial Training Courses 8 Professional Training Organisation Professional Training Organisation 4 Other Training in business processes with industry expert

based mentor program 1

Space engineering & research internship program 1

Of the 46 companies interviewed 14 companies reported having capabilities that fall within the segment of ‘Space Education and Training’. Of these 14 companies two are multinational corporations; two are international companies with overseas parents; one is a large corporation; six are SMEs; two are entrepreneurial companies; and one is a university owned company.

The most predominant areas of capability are in ‘Professional Development Courses’ and ‘Commercial Training Courses’ which is not surprising for the corporate sector. Eight companies report capabilities in providing ‘Professional Development Courses’ and also eight companies report capabilities in providing ‘Commercial Training Courses’. A total of 11 companies reported providing training in these two categories as a commercial activity of their business and five of them report that their courses have accreditation from relevant accrediting bodies such as VETAB in NSW. Four companies are ‘Professional Training Organisations’ while two companies provide courses at Vocational and Technical Colleges and one company is a University Course Provider.

The interviews revealed some unique ‘Space Education & Training’ activities. One company has developed a very detailed and sophisticated training regime to train contract technicians on both the technical and safety aspects of satellite dish installation on rooftops at remote sites. Another company has developed a space engineering research internship program which is attracting highly qualified candidates from all over the world to Australia to assist the company with its space engineering research for commercial applications.

The evidence shows that ‘Space Education & Training’, is an important part of the commercial space business activities for a significant number of the interviewed companies. These companies see ‘Space Education & Training’ as a key part of the space industry and an area that is not limited to the academic sector but an area where companies can also play a significant role.



6 Domestic and International Supply Chains

This chapter describes the broad global supply chain for space activity ranging from satellite operators down to the services that are enabled by space based assets. It analyses the differences between the global supply chains that relate to the three primary service domains of satellite communications, earth observation, and satellite position, navigation and timing. This chapter also identifies where Australian space capabilities map onto these global supply chains.

In This Chapter: - 6.1 Background and Definition of Supply Chains - 6.2 Where Australian Space Capabilities Map on Global Supply Chains

- 6.2.1 Satellite Communications - 6.2.2 Earth Observation - 6.2.3 Position Navigation and Timing



6.1 Background and Definition of Supply Chains

The term ‘supply chain’ can be interpreted in different ways according to the industry or sector being considered. An objective of this study is to understand space related global supply chains and where the space capabilities of Australian companies fit within those supply chains. For the purposes of this study the global supply chain reaches from the owner / operator of a satellite down through the companies that supply the spacecraft that flies in space, the launch service that launches it, the ground equipment that supports it, and the services that it enables. While ultimately there are customers or consumers who utilize the space enabled services and applications, for the purposes of this study the global supply chain is considered to end with the companies that provide space enabled services and applications or the technology associated with them.

6.2 Where Australian Space Capabilities Map on Global Supply Chains

In its most simplistic form as described above the global supply chain for space related products and services can be depicted as follows in Table 27.

Table 27 Global Supply Chain for Space Services

Supply Chain Segment Intensity of Capability Amongst Companies Interviewed


Space Systems Low

Launch and support Services Low

Ground Systems High

Space Enabled Services and Applications High

There are however subtle differences between the detailed supply chains that apply to the different service domains of space activity. For example the service domain of satellite communications is more fully commercialised than is the case with earth observation and satellite navigation and timing. There is also a similar gradation in commercialisation between earth observation and satellite navigation and timing given that there are some fully commercial earth observation satellite operators in the world whereas there are no commercial satellite operators within the satellite navigation and timing domain. In order to analyse where the space capabilities of Australian companies map onto global supply chains it is therefore useful to review the supply chains for each of the three key domains of satellite communications, earth observation, and satellite navigation and timing.

6.2.1 Satellite Communications

As noted above the service domain of satellite communications was the first area of space activity to become commercialised. Whereas satellite communications in their earliest incarnations were the domain of national governments and international organisations it was in the 1990’s that the transition from government ownership to corporate ownership largely took place. In some cases large corporations launched their own communications satellites and in other cases national governments sold what had previously been national assets into domestic corporations. In a few



cases national governments such as South Korea, Japan, and European governments sought to leverage their domestic space programs to help develop technology for their satellite telecommunications needs in order to build capabilities that could then compete as part of global supply chains. As the realm of satellite communications transitioned from national governments to commercial entities, so too did the associated supply chain move from one that was nationally driven to one that was commercially driven. Today large satellite manufacturers draw on component suppliers from around the world, not just their own domestic supply base. While ITAR regulations still impede the flow of technology to some degree there is undeniably an international supply chain that supports satellite communications.

The following Table 28 depicts the detailed supply chain for satellite communications and where the interviewed Australian companies have capabilities that map onto that global supply chain. The same colour coding of green, yellow and red has been used to indicate the intensity of capability identified by the interviewed companies in the relevant areas.

Table 28 Global Supply Chain for Satellite Communications

Supply Chain Segment Category Intensity of Capability Amongst Companies

Interviewed

Satellite owner / operator







Other Low






Other Low







Other Low


Satellite Broadcast Service Providers Medium

Satellite Communications Service Providers High




It is important to remember that the level of intensity shown above is based on the number of the 46 companies interviewed that reported capability in a particular category. Hence these results



reflect areas of concentration of capability within the various supply chain categories. While this study is based on the capabilities of only 46 companies the levels of capability concentration are similar to those obtained in the 2010 and 2011 studies. Hence while a broader based study might find slightly higher capability concentrations in certain categories, on the whole these results can be considered a reasonable reflection of the general proportion of capability concentrations in the satellite communications global supply chain categories for the Australian space industry.

The results of this study show that Australia’s highest concentrations of capabilities in the Satellite Communications Supply Chain are in the ‘Ground Systems’ and ‘Space Enabled Services’ segments of the supply chain categories. Australia also has a reasonable concentration of satellite owner operators as well as a high level of capabilities in systems engineering and technical support services for space systems. These results are not surprising as Australia has a robust and sophisticated satellite communications sector with a large number of companies providing a wide variety of services ranging from broadcasting and Direct to Home TV, to Broadband Internet and VSAT networks to satellite telephones and Machine to Machine connectivity. Australian companies are directly involved in domestic supply chains in ‘Ground Systems’ and ‘Space Enabled Services’ and many of these companies are involved in satellite communications supply chains overseas as well.

It is important to note that Australia has capabilities in all categories of the satellite communications global supply chain except for the category of ‘Launch Services’. This means that even categories with low concentrations of capabilities are providing goods and services into a supply chain somewhere, either domestically or internationally. Hence Australia already participates to some degree in all but one category of the satellite communications supply chain. While the areas of high and medium capability concentration would probably be the more likely areas for further expansion into global supply chains it must be recognised that individual companies in a low capability concentration category can still achieve international success. This is particularly true with technology breakthroughs and disruptive technologies and the growing commercialisation and expansion of the space industry in the last decade has seen an increasing focus and search for these disruptive technologies including the development of smallsats and cubesats. In this context it should be noted that Australia already has an example of this with a company in the low concentration category of ‘Space Component and Material Supply’ manufacturing radiation hardened, high-reliability integrated circuit chips that are used in satellite manufacture worldwide.

Finally it is interesting to observe that the pattern of space capability concentration in satellite communications within Australia broadly matches the international space industry revenue flows depicted in Figure 3 in Section 3.4 above. The highest space industry revenues globally are in the ‘Space Enabled Services’ side of satellite communications with lesser revenue flows for the infrastructure areas of ‘Space Systems’ and ‘Launch Systems’. The concentration of Australian space capabilities reflects these numbers as expected in the corporate sector where companies concentrate their resources towards the areas of maximum revenue flows.

6.2.2 Earth Observation

As noted above the Earth Observation domain lies between Satellite Communications and Satellite Navigation and Timing in terms of the level of commercialisation that has occurred in that service domain. Whereas the major commercialisation of satellite communications took place in the 1990’s it was not until after the turn of the century when commercial operators more broadly began to emerge in the earth observation sector. In the early years of earth observation the spacecraft were large and solely the domain of national governments. Two significant developments helped change this landscape. One was the advent of the US Government effectively outsourcing some of its requirements to commercial earth observation satellite operators, while the other was the increase



in capabilities of smaller spacecraft. This latter development enabled additional countries to develop earth observation spacecraft of their own while at the same time bringing the cost of earth observation spacecraft within the realms of what could be financed by commercial entities. In the last couple of years there has been another significant change in the earth observation realm with the advent of new constellations of earth observation spacecraft of even greater simplicity and cost which are seeking to address new opportunities within the earth observation area. Previously each generation of spacecraft has tended to increase image resolution or decrease the cost of the platform that supplies the same level of resolution. The most recent developments have moved in a different direction focusing on persistent or real time imagery which serves unique and different needs and markets.

The changes within the earth observation sector over time have had a similar impact on the global supply chain associated with this sector. As with satellite communications there has been a shift from a nationally driven approach to one that is more commercially oriented. The fact that many countries have opted to develop their own earth observation spacecraft also means that many more countries have capabilities that can feed into the global supply chain although rarely are the countries outside of the US, Canada, Europe, Russia, Japan, India and China able to develop a spacecraft entirely on their own. The proliferation of national and regional government earth observation satellite programs has opened new potential roles for Australian companies with capabilities in this service domain. Particularly in the Asian region there has been a strong influence of people within national programs having received some of their space related education in Australia which has forged links to Australia and Australian companies. The national programs in this region are also more open to the involvement of Australian companies and capabilities than is the case in other parts of the world. This has obvious implications for the ability for Australian companies to be involved in regional supply chains.

The most recent evolution in earth observation cited above has grown out of what is often referred to as ‘Space 2.0’, namely the understanding of the value of data that can be obtained using very small, cheap satellites designed for very short lifespans compared to the early traditional approach to space. The concepts often involve an almost disposable attitude to the satellites with the intention to constantly replace them as needed. This business and technological philosophy considerably opens the demand and hence the global supply chain for these types of systems as it is much more focused on cost and much less on proven reliability with a willingness to accept a higher operational risk. This area represents a number of opportunities for Australian companies, including the possibility that an Australian company could conceive of and develop a commercial earth observation service and implement it itself, which is something that would not have been plausible even a few years ago due to the prevailing cost and risk trade-offs. As this market continues to evolve it is quite possible that Australian companies could become satellite owner / operators in the future. At the very least Australian companies have significant capabilities that can feature in regional and global supply chains, particularly in the areas of ‘Ground Systems’ and ‘Space Enabled Services’.

Table 29 depicts the detailed supply chain for the service domain of ‘Earth Observation’ and where the interviewed Australian companies have capabilities that map onto that global supply chain. The same colour coding of green, yellow and red has been used to indicate the intensity of capability that the interviewed companies have reported in the relevant areas.



Table 29 Global Supply Chain for the Earth Observation Segment

Supply Chain Segment Category Intensity of Capability Amongst

Companies Interviewed

Satellite owner / operator Satellite owner / operator None






Other Low






Other Low







Other Low




Earth Observation Services & Applications High


Just as discussed with the satellite communications service domain it is important to remember that the level of intensity shown in the table above for the Earth Observation service domain is based on the number of the 46 companies interviewed that reported capability in a particular category. Hence these results reflect areas of concentration of capability within the various supply chain categories. While this study is based on the capabilities of only 46 companies the levels of capability concentration are similar to those obtained in the Earth Observation service domain in the 2010 and 2011 studies. Hence while a broader based study might find slightly higher capability concentrations in certain categories, on the whole these results can be considered a reasonable reflection of the general proportion of capability concentrations in the Earth Observation global supply chain categories for the Australian space industry.

As reflected in the table above this study shows that Australia’s highest concentrations of capabilities in the Earth Observation Supply Chain are in the segments of ‘Ground Systems’ and ‘Space Enabled Services ’. This matches the key segments of capabilities found in the Satellite Communications supply chain however, unlike in the satellite communications service domain, there are no Australian companies that own or operate earth observation satellites.

The concentration of capabilities in the ‘Ground Systems’ and ‘Space Enabled Services’ segments is not surprising. Australia has been active in the Earth Observation industry almost since the industry’s inception. It has a long history of downlinking and sourcing Earth Observation data, analysing and interpreting the data, and developing this data into products for customers.



Australian companies are directly involved in domestic supply chains in ‘Ground Systems’ and ‘Space Enabled Services’ and many of these companies are involved in Earth Observation service domain supply chains overseas as well.

Again it is important to note that Australia has capabilities in all categories of the Earth Observation global supply chain except for the categories of ‘Launch Systems’ and satellite owner/operator. This means that even categories with low concentrations of capabilities are providing goods and services into a supply chain somewhere, either domestically or internationally. Hence Australia already participates to some degree in all but two categories of the Earth Observation supply chain. While the areas exhibiting high and medium capability concentration would probably be the most likely areas for further expansion into global supply chains again it must be recognised that individual companies in low capability concentration categories can still achieve international success. This is particularly true of the Earth Observation domain where the recent technology breakthroughs in the use of smallsats and cubesats have created new applications and new markets for Earth Observation services. Again Australia already has an example of this with a company in the low concentration category of ‘User Equipment Manufacturer’ manufacturing subsystems, components and tracking mounts for meteorological earth stations which are being sold internationally. Australia’s space systems capabilities, though generally of low capability concentration, are of sufficient capability to develop cubesats and even smallsats for the Earth Observation domain and hence have the possibility of entering the supply chain for the growing demand of small Earth Observation satellites.

As with the Satellite Communications domain the pattern of space capability concentration in the Earth Observation domain within Australia broadly matches the international space industry revenue flows depicted in Figure 3 in Section 3.4 above. In the Earth Observation domain the highest revenues globally are in the ‘Space Enabled Services’ segment with lesser revenue flows for the infrastructure segments of ‘Space Systems’ and ‘Launch Systems’. The concentration of Australian space capabilities in the Earth Observation domain reflects this pattern as companies concentrate their resources towards the areas of maximum revenue flows.

6.2.3 Satellite Position Navigation and Timing

The service domain of ‘Satellite Position Navigation and Timing’ again has slightly different characteristics from the Satellite Telecommunications’ and ‘Earth Observation’ service domains. One of the major differences is that the satellite systems that deliver services in this area are still exclusively the province of the governments of large space players such as the US, Russia, Europe, China, Japan and India. These systems are nationally driven and there is considerably less scope for companies outside of the national supplier base to participate in the provision of ‘Space Systems’ or ‘Launch Systems’. The dominant opportunities lie in the ‘Ground Systems’ and in ‘Space Enabled Services’ segments. This service domain has been one of the fastest growing areas of the global space industry that has seen a proliferation of uses for satellite location data that is spawning the development of new and different business applications. Many of the applications that are enabled by satellite position location have moved to the individual consumer level which has opened new opportunities globally including for Australian companies. Recognition of the ready availability of technology around satellite based location information is encouraging many players outside of the space industry to integrate this technology into their business or service offering. These, along with the use of precision location information to improve productivity, are key areas of application for Australian companies with space capabilities in this area.

Table 30 depicts the detailed supply chain for the service domain of ‘Satellite Position Navigation and Timing’ and where the interviewed Australian companies have capabilities that map onto that global supply chain. The same colour coding of green, yellow and red has been used to indicate the intensity of capability that the interviewed companies have reported in the relevant areas.



Table 30 Global Supply Chain for Satellite Position Navigation and Timing

Supply Chain Segment Category Intensity of Capability Amongst Companies

Interviewed

Satellite owner / operator Satellite owner / operator None






Other Low






Other Low







GNSS Reference Stations & Fixed GNSS Receivers High

Other Low




Satellite Navigation Services & Applications High


The profile of Australian capabilities for the ‘Satellite Position Navigation and Timing’ service domain is very similar to the results for the ‘Satellite Communications’ and ‘Earth Observation’ service domains with the highest concentrations of capability appearing in the segments of ‘Ground Systems’ and ‘Space Enabled Services’.

Just as with the previous service domains the level of intensity shown in the table above for the ‘Satellite Position Navigation and Timing’ service domain is based on the number of the 46 companies interviewed that reported capability in a particular category thus revealing areas of concentration of capability within the various supply chain categories. Again these results based on 46 companies are similar to those obtained in the ‘Satellite Position Navigation and Timing’ service domain in the 2010 and 2011 studies. Hence while a broader based study might find slightly higher capability concentrations in certain categories, on the whole these results can be considered a reasonable reflection of the general proportion of capability concentrations in the ‘Satellite Position Navigation and Timing’ global supply chain categories for the Australian space industry.

Like the ‘Earth Observation’ service domain there are no Australian companies that own or operate satellites for the purposes of position navigation and timing. However there is one Australian company that has developed a land based system that provides positioning signals similar to those provided by the satellites but at a local level. This system is gaining considerable overseas interest and is being deployed for testing by NASA in the USA.



Australia is one of the few countries in the world which has visibility of all the GNSS constellations hence is an ideal place for the development of applications using GNSS signals. This is reflected in the high concentration of capability in the ‘GNSS Reference Stations’ category. Australia has developed significant capabilities in the development of ‘Satellite Position Navigation and Timing’ applications and several multinational companies maintain GNSS software development divisions within Australia. This service domain represents a major growth area in the space industry and Australian companies are already participating in global supply chains in this area.

As with the previous service domains Australia has capabilities in all categories of the ‘Satellite Position Navigation and Timing’ global supply chain except for the categories of ‘Launch Systems’ and ‘Satellite Owner/Operator’ and as noted Australia has a ground based alternative for the latter. Hence Australia has the capability to participate in most areas of the supply chain. Since the GNSS signals are provided by national governments largely using their national supply chains the capabilities in ‘Space Systems’ and ‘Launch Systems’ segments are not as relevant to this service domain. Australia has significant capability in the most important segments of ‘Ground Systems’ and ‘Space Enabled Services’.

This is an application driven service domain and the concentration of capabilities of Australian companies in the ‘Satellite Position Navigation and Timing’ service domain reflects this. As with the previous service domains the pattern of space capability concentration in the ‘Satellite Position Navigation and Timing’ service domain within Australia broadly matches the international space industry revenue flows depicted in Figure 3 in Section 3.4 above. For the ‘Satellite Position Navigation & Timing’ service domain the highest revenues globally are overwhelmingly in the ‘Space Enabled Services’ segment. The concentration of Australian space capabilities in the ‘Satellite Position Navigation & Timing’ domain reflects this pattern as companies concentrate their resources towards the areas of maximum revenue flows.

A review of this collective data demonstrates that the Australian space industry has capabilities in almost all of the categories used in the supply chains for the key service domains of Satellite Communications, Earth Observation and Position Navigating and Timing. Hence Australia is already participating in these supply chains at some level, either domestically or internationally. The highest concentrations of Australian capabilities for all three of these service domains are in the ‘Ground Systems’ and ‘Space Enabled Services’ segments which correspond to the areas of highest space industry activity and revenue generation in the international space industry. From this perspective Australia has capabilities concentrated in the appropriate areas to grow its participation in the global space industry internationally.



7 Supply Chain Opportunities for Australia

Chapter 7 examines the opportunities for Australian companies with space capabilities amongst global supply chains. Given differences between different segments of the supply chain the opportunities for Australian companies are evaluated by supply chain segment. For the segment of space enabled services further analysis is done based on the three primary service domains. Additional opportunities arising from the unique characteristics of the New Space’ market and regional markets are explored.

In This Chapter: - 7.1 Opportunities for Australian Companies by Supply Chain Segment

- 7.1.1 Supply Chain Opportunities in Satellite Ownership and Operations - 7.1.2 Supply Chain Opportunities in the Space Systems Segment - 7.1.3 Supply Chain Opportunities in Launch Systems - 7.1.4 Supply Chain Opportunities in the Ground Systems Segment - 7.1.5 Supply Chain Opportunities in Space Enabled Services

- 7.1.5.1 Satellite Communications - 7.1.5.2 Earth Observation - 7.1.5.3 Position Navigation & Timing

- 7.2 Regional Markets - 7.3 New Space Markets - 7.4 Key Issues for Australian Participation in Global Supply Chains



7.1 Opportunities for Australian Companies by Supply Chain Segment

There are various ways to analyse the opportunities that may exist for Australian companies within global supply chains. It should be recognized that opportunities to enter global supply chains can mean becoming part of the global supply chain for a service being supplied into the Australian market or it could mean becoming part of the global supply chain serving overseas markets. Both have significantly different characteristics. In most segments the capabilities that Australian companies have can be utilized across different service domains. Hence it is most useful to examine the opportunities that exist within each segment of the global supply chain.

7.1.1 Supply Chain Opportunities in Satellite Ownership and Operations

As noted above the only service domain where Australian companies actively participate in satellite ownership or operation is in the satellite communications sector. Australia’s skills and capabilities have already led to a sophisticated level of activity in this area. With the recent launch of the first ‘Sky Muster’ satellite for NBN, Australia now has effectively two domestic companies owning and operating satellites. But for the recent demise of NewSat Australia could well have had three domestic companies owning and operating communications satellites at about this point in time.

The evolution of satellite communications, including the recent wave of planned constellations of small communications satellites may open new opportunities for Australian companies to become involved in regional operations for some of these systems. At least one Australian company is also planning to ride the wave of spacecraft miniaturisation and plans to deploy its own constellation of nanosats to serve niche markets.

As discussed in the section on ‘Earth Observation’ above there is also the possibility that an Australian company could conceivably take advantage of the increasing capabilities of small spacecraft to develop a business case to serve an Australian or regional market, something that would not have been conceivable only a few years ago. The fact that Australian individuals have been at the centre of some of the recently deployed systems (in particular Planet Labs) indicates that it would be possible for an Australian company to emulate this approach as it is less reliant on the development of local space hardware.

Fundamentally the availability of smaller and cheaper spacecraft serving niche markets increases the possibility that Australian companies will become more involved in the ownership or operation of spacecraft in the future.

7.1.2 Supply Chain Opportunities in the Space Systems Segment

The tendency to source large domestic satellites overseas limits the opportunities for Australian companies in the ‘Space Systems’ segment. The most significant areas of opportunity for Australian companies with capabilities in the ‘Space Systems’ segment lie in the areas of payloads, space components and space qualified testing. Australian companies will have the greatest opportunity to participate in programs in the Asia-Pacific region where there is greater receptivity to utilising Australian components or working with Australian companies to provide payloads and where there may be a lack of local capability. A number of countries in the region also lack test facilities as sophisticated as those available in Australia.



The rapidly growing use of cubesats offers a potential opportunity for companies with capability in the ‘Space Systems’ segment. The relatively low cost of cubesat manufacture combined with the acceptance of slightly higher risk of failure significantly lowers the barriers to entry for local production of cubesats. This represents one of the best opportunities for Australian companies with ‘Space Systems’ capabilities to utilise their capabilities within the space manufacturing supply chain. Indeed at least one Australian company is embarking on the development of a commercial cubesat manufacturing business. Cubesats and smallsats also offer the opportunity to fly specific payloads or components offering supply chain opportunities for the Australian companies that reported these capabilities.

One of the real advantages of cubesats is that they are an ideal test bed for new satellite technology. In essence they offer an opportunity for rapid prototyping to test new space concepts and systems in the actual space environment - something that previously was not possible within a short timeframe. With cubesats concepts can be tested relatively quickly paving the way for cubesat or smallsat constellations or even development of systems for use on larger spacecraft. Another key opportunity with cubesats is miniaturisation. The small size of cubesats requires a different engineering mindset to enable productive and efficient use of the limited satellite resources. However some of these new engineering concepts or systems necessary to enable cubesat missions are equally effective in or can be scaled up to larger satellite systems. Building cubesats can be a stepping stone to developing systems for larger spacecraft hence is a possible means of entry into satellite global supply chains. The cubesat field represents a tremendous opportunity for Australian companies with ‘Space Systems’ segment capabilities.

One Australian company has already developed world class capabilities in the manufacture of space components and advanced materials that are already used by the global supply chain for satellite manufacturing. The company is developing new and more advanced products which are expected to increase its share of global supply chains. This demonstrates that with the right technology and product mix Australian companies can compete in the space manufacturing sector and become part of global space supply chains.

7.1.3 Supply Chain Opportunities in Launch Systems

In the arena of launch services there is no domestic launch service provider. Hence by definition all capabilities in the ‘Launch Systems’ segment are in many ways part of the global supply chain serving overseas markets. There are currently limited opportunities for Australian companies in the ‘Launch Systems’ segment of the existing global supply chains for launch vehicle manufacture and launch services. As noted elsewhere the most promising opportunity for Australian companies in this segment is in the early tracking of launches where facilities in Australia are geographically well placed for the early acquisition of satellites launched from certain sites about 30-40 minutes after launch. Australian companies are already well placed in this area and will continue to play a role in this part of the global supply chain.

Australian company capabilities associated with orbital debris could also play a growing role in the launch segment as this problem grows in prominence globally. In particular the tracking of space debris for launch safety could become a significant opportunity for future launch support.

There is also a trend emerging globally for companies to develop small launch vehicles designed specifically to service the growing small satellite market. The successful emergence of Rocket Lab in New Zealand and similar projects around the globe could present opportunities for utilisation of Australian capabilities in launch support services. At least one international company interviewed in the course of this study expressed their openness to the involvement of Australian capabilities in the



development of their vehicle as long as those capabilities were cost competitive. This is a general trend of the ‘New Space’ era where companies are far more open to global suppliers if their pricing is competitive. It is much less driven by established relationships and previous national industrial base development and maintenance. Australian capabilities associated with rocket motor test rigs, solid propellant manufacturing equipment, and filament winding machines for casing & motor manufacture could potentially be utilized by some of the new small launch service proponents. The growing proliferation of cubesats and their increasing need for cost effective launch services is a growing opportunity waiting to be effectively served and presents opportunities for enterprising Australian companies with capabilities in this area.

7.1.4 Supply Chain Opportunities in the Ground Systems Segment

The ‘Ground Systems’ segment of global supply chains is both one area where Australian companies have significant capabilities and where there are real opportunities for penetration of the global supply chain. One of the common themes amongst the companies interviewed with capabilities in this area was how Australian companies work with the large international companies that serve this market. In a number of cases large international companies have sought to establish a presence in Australia to serve and access local requirements. This has opened the door for local companies to offer their capabilities as part of the integrated product or service being offered within Australia. Some of the large integrators specifically want maximum local content, especially when this is a clear objective of their client such as the ADF. Some of the specific areas of capability of Australian companies that were cited by companies interviewed were in: software and network management systems for ground systems; local suppliers for hardware in ground systems; network management and spectrum management software; and local suppliers for long term maintenance and support. One large international corporation specifically stated that with a suitable price Australian suppliers can be integrated into their broader global supply chain. They noted Australia has good capability in software and network management and uses local suppliers for 50% of these systems in their local ground station projects and possibly 10% local suppliers for hardware in ground systems. With the ability to prove themselves in the domestic Australian market this has allowed some companies and their capabilities to be factored into this company’s global supply chain.

Significantly some of those same large international companies have deliberately identified their Australian operations as a base or launching pad from which to offer their services into the Asian region. Some of the specific opportunities cited were long term earth station and product support in the region and provision of key software to enable different equipment to operate seamlessly.

Some of the Australian SMEs interviewed identified how they were leveraging off their experience working with larger prime contractors on Australian projects. One company noted that they were using their relationship with the major prime contractors developed through activity in Australia to gain access to the prime’s home markets in the US and Europe.

While there was much positive commentary about opportunities in this area at least one large international corporation sounded a cautionary note stating that Australian owned SMEs are key for some local projects but that it is often hard to find candidates with suitable capacity to play a role in large projects with the company’s small size or limited number of staff being a limiting factor for many.

Some Australian SMEs have developed sufficient ground station capability to provide almost full ground station systems as stand-alone projects. One company noted how they had started as a specialist RF component manufacturer and then gradually expanded to provide the entire value chain for RF systems including antenna & feed design, tracking systems, tracking mounts, radomes



and complete mobile Satcoms terminals. Another company has carved out a stake in the meteorological earth station market building complete ground station systems including software and competing successfully by winning international tenders. Yet another small company has become a world leader in ground station facilities for Space Situational Awareness and is partnering with a multinational company to pursue opportunities internationally.

The ‘Ground Systems’ segment is an area strong with Australian capability where Australian companies are increasingly having success both domestically and internationally. Australian companies have capability across the entire spectrum of ground station types including stations used for Satellite Communications, Earth Observation, GNSS and Defence applications. This ‘Ground Systems’ segment will be a key area where Australian companies can expand further into global supply chains.

7.1.5 Supply Chain Opportunities in Space Enabled Services and Applications

The ‘Space Enabled Services’ segment is effectively the end of the overall global supply chain and is the point of interface with actual end markets and customers. The customers and end markets are different in each of the three primary service domains of satellite communications, earth observation, and position navigation and timing. Hence the opportunities for Australian companies with these capabilities to enter global supply chains are best reviewed by service domain.

7.1.5.1 Satellite Communications

The companies interviewed that operate in this service domain included ‘Satellite Broadcast Service Providers’, ‘Satellite Communications Service Providers’, ‘User Equipment Manufacturers’, ‘User Equipment Suppliers’ and ‘Technical Support Services’. Consequently the customers and markets involved tend to be companies of varying sizes with some direct consumer markets in the case of ‘Satellite Broadcast Service Providers’ and ‘Satellite Communications Service Providers’.

All of the companies with satellite communications capability in Australia are involved in the supply chain for satellite communications in the domestic market and for most companies this is their primary focus. For the companies with capabilities relating to user equipment manufacture and supply a common theme was their ability to work with multiple equipment suppliers and to add value by integrating their own software and equipment to enable different equipment to operate seamlessly. One company specifically cited their expertise across many different handsets, satellite providers and modems and their capability to add value via their own hardware and software. They were using this capability specifically to target the Machine-to-Machine (M2M) market in mining and transport for tracking of remote assets. Such a capability once developed has potential applications in other markets internationally. Another company specifically stated they were integrating the products and services of other suppliers to form new products of their own. In this sense they were creating their own supply chain though which they could offer their new products back into international markets.

The companies with capabilities as ‘Satellite Communications Service Providers’ have tended to start off serving customers in the domestic Australian market but then followed those customers into other countries as their customers expand overseas. In some cases this means establishing relationships with local partners in other countries in order to secure landing rights. This sometimes requires partnering with large telecommunications companies or satellite service providers in other countries to assist in market entry thereby forging links within the global supply chain. Also in



keeping with the theme of following their customers’ needs wherever their business takes them many companies have established the capability to operate on different satellites to make sure they have the best satellite coverage to meet their customer’s needs.

One company reported developing a nationwide network of satellite consumer dish installers and a logistics system that manages orders, equipment and installer. This allows them to be able to get equipment and the installer to the right place at the right time anywhere in the country - serving the crucial last mile in the supply chain. In their opinion this is a crucial capability and one that has applicability in other markets. This is an example of a creative solution to meet the relatively unique demographics in Australia’s domestic market that has strong potential to meet the needs of more densely populated regional markets.

Some of the larger companies stated an express intent to expand into the Asian market and were looking to do this by partnering with other global satellite operators and teleport operators. Another company specifically stated that they were looking to expand their operations in Australia as a platform for expansion into Asia particularly for long term earth station and product support in the region.

Australia has strong satellite communications capabilities in a market that is growing globally. One of the most effective methods for Australian companies to expand internationally has been to continue to provide communications services to their customers as they expand offshore and this will continue to be a key growth path for Australian companies as the satellite communications market continues to grow.

Case Study 4 – Satellite Communications: Skybridge

Over the last two decades the fastest growing area in the satellite communications industry has been the provision of satellite services direct to the consumer, primarily satellite Direct to Home (DTH) Pay TV and satellite broadband services. The provision of these services including the manufacture and supply of customer premise equipment now comprises more than one-third of all space activities worldwide generating revenues of USD $113 billion annually. While the key elements of what has become a massive industry - the satellites, bandwidth and customer premise equipment - are generally known there is one essential component of this industry that is often overlooked – the installation and maintenance of the customer premise equipment and the companies, such as Melbourne based Skybridge, that make this happen in an efficient and timely manner.

As the Australian DTH Pay TV industry began to take off in the late 1990’s most traditional satellite providers had little experience in dealing directly with consumers including the issues of scheduling installation when the customer is home, the logistics of equipment delivery and the practicalities of rooftop installations and internal cabling, connecting the set-top box and establishing the service. Due to the distances involved scheduling and equipment delivery challenges increased dramatically in rural and remote Australia which was the area of highest satellite demand. Recognising a business opportunity Skybridge was formed in 1999 to provide a professional installation and maintenance service to the DTH satellite industry.

Skybridge CEO Michael Abela notes that “most people think of satellite services as a niche market that can be served by a cottage industry. They do not realise that this is a major industry that requires sophisticated logistics and training systems to deliver the services effectively. This business is about having a highly trained satellite installation workforce and a system to manage the process of getting the equipment and technicians to the right customer at the right time.”



The key to Skybridge’s success is built on two key foundations – people and processes. Field staff training is crucial to the business and Skybridge has developed rigorous training programs and special training facilities to cover all aspects of the satellite installation process which are accredited through collaboration with a registered training organisation. The Skybridge training not only covers the satellite installation process but has a heavy emphasis on the safety aspects of the job. All field staff must complete requirements for 1) Working in the Construction Industry, 2) Working at Heights, 3) Working in Confined Spaces and 4) Asbestos Awareness. CEO Michael Abela notes that “Australia has the most regulated safety regime in the world by far” and that adherence to safety and the specific steps of the installation process are at the core of Skybridge success. Skybridge now has over 1,500 trained technicians covering satellite and other types of installation nationwide.

The other key element is process. As Michael Abela notes, “At its core this is a complex logistics business. Our key to success is our focus on process management and quality control.” Skybridge has invested heavily in the back-end processes that underpin the business by developing its own logistics management system, Skybridge Information Management Online Network (SIMON). This system integrates all the processes required for successful installation including customer scheduling, technician job provisioning, equipment delivery logistics, quality assurance and Occupational Health & Safety (OH&S) compliance management. Skybridge employs more than a dozen software developers to continually improve the system to optimise work flow processes for rural and remote Australia where it can take up to 14 days for equipment delivery. The SIMON system allows Skybridge to effectively manage these complex logistics in an efficient, timely and predictable manner. Michael Abela comments that, “it takes real smarts to develop a system to deal with the complex logistics of providing service in the Australian bush, particularly with the vast distances involved. But if you can develop a system to run a profitable business serving the Australian bush you can run a profitable business anywhere.”

Since its humble beginnings as a start-up serving the fledgling satellite DTH industry in 1999 Skybridge has grown to an organisation of 90 staff. It has provided services to Optus, Foxtel, NBN, Energy Australia, IBM, NAB, 3M and many other corporations that need satellite dish installations for customers or regional branches and has now conducted more than 540,000 site visits across all parts of Australia. Skybridge completed more than 90% of the installations for the Australian Government’s Broadband Guarantee Program, was the primary installation provider for the Government’s Digital Switchover Program and the NBN Interim Satellite Service and is one of the key providers for the significant satellite installation demands of NBN’s Long Term Satellite Service.

The key training processes and logistics systems that have proven so effective in solving the logistics challenges of satellite dish installation in the Australian bush are now being deployed to solve similar problems in other industries. Skybridge is adapting its proven training regimen and logistics program to now serve the mining, facilities management and alternative energy industries and exploring the viability of expanding into offshore markets. As Michael Abela puts it, “If you train good people and develop good processes with the smarts to handle satellite systems they have the capability to go anywhere. Solving the satellite installation problem with good people and processes opens enormous opportunities in many different sectors.”

In 15 years Skybridge has helped transform the Australian satellite DTH installation industry from a cottage industry to a large, sophisticated logistics enterprise with applications and opportunities in many diverse fields.



7.1.5.2 Earth Observation

The global supply chain in the earth observation service domain is different to that for satellite communications. There is a more limited number of actual satellite owner / operators globally and none in Australia. The organisations that operate these satellites are a combination of commercial interests as well as government funded entities. A standard part of the global supply chain for earth observation data is for there to be one or more local companies reselling imagery from these satellites. As the raw imagery is generally not particularly useful in its own right the next layer in the supply chain are the companies that manipulate the data to provide specialised analysis for the end customer. Almost by definition Australian companies with space capability in this area are part of the global supply chain associated with delivery of earth observation data as local capability is required to distribute and manipulate the data coming into Australia. However companies that are successful in creating unique solutions such as bringing out specific features in the data of value to particular industries or finding effective ways to present the data or fusing the data with other data sets have a capability can readily be used in other parts of the world.

From the interviews conducted it was clear that access to appropriate data sets is one of the key ingredients for success in the Earth observation domain. Partnering with clients to fully understand their needs was seen as an important part of delivering a useful product or service and a pathway to expansion of their business. Once the key concerns of a particular type of client or industry were understood the product developed to meet their need could then be sold anywhere in the world where a similar type of client or industry exists. Some of the key markets mentioned in the interviews included mining, Government, agriculture, environmental monitoring, infrastructure projects, the maritime industry. Clearly these markets are all global in character and hence someone who does data manipulation or data integration and analysis of this type in Australia has the ability to offer this capability into other markets in conjunction the companies selling imagery into other countries. One company specifically suggested that international business was a major focus for the company and hence they have established international partnerships to obtain access to data sets and to sell into those overseas markets.

Earth observation imagery is one of the real growth areas of the space industry. The majority of planned and announced cubesat constellations are focused on providing earth observation imagery in new and more pervasive ways such as virtual real time imagery. Another strong growth trend in this area is the collection and presentation of earth observation imagery to the consumer market. An additional strong trend is the fusion of various sensors to create a composite picture such as a combined picture using optical and infrared sensors or hyperspectral sensors. There is a lot of growth in the new uses of earth observation imagery worldwide. Australia has significant expertise in this sector particularly in the development of useful products for specific industries and hence is well placed to ride the wave of new earth observation imagery and presentation into global supply chains.

Case Study 5 – Earth Observation: Tidetech

The ability to observe our complex planet from space has been one of the major achievements and information breakthroughs of the space age. Earth Observation data continues to grow in sophistication and complexity helping us to better understand our fragile planet while serving a range of activities from land mapping to mineral exploration. More recently the advent of products like Google Earth has brought Earth Observation to the masses of consumers and become a key piece of information for many new products and services. People are now familiar with using the view from space to understand geographic features and landforms. Tasmanian company Tidetech is using some of the newer Earth Observation instruments to take this one step further – to produce information



about the oceans to help sailors and shipping companies navigate the waves more effectively and efficiently.

Tidetech was founded in 2008 by CEO Penny Haire and Science Director Dr. Roger Proctor to create value added products for on water users. Dr. Proctor spent many years at the National Oceanographic Centre in the UK and during that time provided oceanographic support to the British elite sailing teams at the 1988, 1992, 1996, 2000, 2004 and 2008 Olympics. Penny Haire is a long-time skipper, navigator and examiner for the RYA Yachtmaster qualifications. They originally formed Tidetech to provide oceanographic support for recreational sailing with a particular focus on ocean currents and tidal currents. Tidetech’s initial contract was to provide ocean currents and weather forecasts for the Sydney to Hobart Yacht race in 2008.

One of the key issues for yachtsmen was reliable data on tidal currents. There were data sets that were reasonably good for oceans but not very good in tidal areas. So Tidetech began developing the capability to create coastal models themselves. They found Hobart, with its concentration of world class marine and Antarctic researchers, an ideal location for this development. They recruited modelling expertise and sourced a wide range of earth observation data sets focused on the oceans to feed into the models.

Tidetech is now a world leader in tide and storm surge modelling and the development of operational forecast systems using Earth Observation data. They have also developed highly specialised expertise in system architecture for managing large scale, complex meteorological and oceanographic datasets. They now specialise in providing accurate and detailed environment information for the marine industry including tidal currents, ocean currents, meteorological data, waves and sea temperature.

Tidetech’s expertise is still in demand by elite sailors all over the world. Tidetech’s data was used by the Volvo Ocean Race in 2011, the Australian Olympic Sailing team at the London Olympics in 2012, the 34th America’s Cup in San Francisco in 2013 and will be used by the New Zealand, Polish, Swedish and German Olympic Sailing teams at the Rio Olympics in 2016. Provision of data to elite and increasingly to recreational sailors remains a key part of Tidetech’s business but since 2011 they have developed a completely new market – “green shipping” which is the use of sophisticated oceanographic data to optimise fuel use for the commercial shipping industry.

Tidetech came to realise that its accurate data on tidal currents was just as important to the shipping industry as to the yachting industry. The shipping industry uses a higher proportion of fuel navigating at the end points of the voyage hence accurate information on tidal currents can make a big difference and they can also use knowledge of ocean currents to optimise the route. Trials with some large shipping companies proved that time and fuel savings of up to five percent can be achieved by optimising standard shipping routes based on Tidetech oceanographic data. Tidetech’s data is now used for route optimisation by over 5,000 vessels worldwide, representing millions of dollars saved in fuel costs and significantly fewer carbon emissions for their customers.

One of the key impediments to the widespread use of Earth Observation data over the years has been the lack of user friendly access to what are generally complex data sets. Tidetech has invested in significant development of packaging its data for easy use by the broad maritime market. It has specialist developers to integrate its data products into third party navigation systems and efficiency software used by the commercial shipping industry and into a wide range of third party software and apps for sailors. Tidetech’s data is available for download via a secure web page, FTP or via its Application Programme Interface (API).



Many of its products are now a subscription service that ships officers and sailors can access via their normal automated on-board systems particularly their electronic navigation systems. An interesting by-product of this ease of access is that Tidetech’s data is now being used by renewable energy companies seeking to harness ocean currents for power generation.

Tidetech’s story reflects some of the key trends in the Earth Observation sector – access to data from increasingly more sophisticated space-borne instruments helps unravel some of the mysteries of our complex ecosystem. Clever companies combining this data in novel ways are increasingly able to produce products of great commercial value not only for commercial users but by ensuring ease and utility of access they are able to bring the fruits of Earth Observation to the larger consumer market as well. This trend of increasing consumer use of Earth Observation data will continue for many years to come.

7.1.5.3 Position Navigation & Timing

The ’Position Navigation and Timing’ domain has yet again different characteristics to the ‘Earth Observation’ domain. In the PNT domain the sources of data are limited to a handful of Government owned satellite systems, primarily including GPS, Glonass, Galileo and Beidou. However the market for the data is much larger including Governments, companies and individual consumers. The key parts of this domain that Australian companies participate in are in ‘Provision / exploitation of satellite based location data’, ‘GIS data integration and analysis’ and “IT & software for satellite navigation data manipulation’.

The PNT market globally relies on a small number of Original Equipment Manufacturers (OEMs) at its core. Australian companies have capabilities in working with this equipment and tailoring products and services that utilise it for specific markets. A key theme emerging from the interviews with companies in this area is the importance of adding local expertise as well as sector specific expertise to develop an enhanced product or service for clients. In some cases Australian companies have developed hardware and software additions to equipment supplied by OEMs and then moved on to manufacturing complete systems themselves. Some companies have worked with major partners on large systems in Australia in order to build credibility and test systems and are now marketing their own products.

A number of companies reported working with OEMs to gain access to additional industry segments and overseas markets. By building credibility in one industry segment companies are then able to partner with the OEM in other areas. Having specific sector knowledge is one key consideration in being able to properly address the needs of different industry segments. Once that knowledge is acquired though, it can be applied in overseas markets especially when the OEMs are confident of working with the Australian company.

The local arm of one of the major OEMs noted that product development work is set by the corporate headquarters. In their case mining and construction product development is done in Australia due to the high technological skill set and cheaper prices than Europe. Lower margin agricultural industry product development has shifted from Australia to Brazil due to labour costs. However Australia is likely to remain a key product developer for higher end products due to its technologically capable workforce.

The PNT domain is the fastest growing sector in the global space industry. Demand for increasing accuracy in precision location continues to grow in many different industries including mining, construction, agriculture and transport. Australia has significant capability in PNT and by partnering



with the OEMs on Australian projects Australian companies have already become part of the PNT global supply chain and will continue to expand into international markets as a result.

Case Study 6 – Position Navigation and Timing: Pod Trackers

The PNT signals provided by the GNSS (such as the US based GPS system, the Russian Glonass system, the Chinese Beidou system, the European Galileo system, the Japanese QZSS system and the Indian IRNSS system) have become a key enabling technology for a wide range of services in recent years. Car navigation systems or navigation apps on smartphones are the most well-known applications but the surveying industry is now completely reliant on these systems and the precision mining, construction and agriculture industries would not exist today without this technology. These systems began only 20 years ago and the development of applications using GNSS technology since then has been one of the biggest space industry growth sectors generating global revenues of US$91 billion in 2014 as companies begin to apply this technology in new and innovative ways. Sydney based Pod Trackers is an example of how an Australian company is exploiting this technology to take on the world.

Three years ago when Sebastian Langton’s beloved pet cat did not return home he was tormented by not knowing what had become of her. He felt that no owner should have to go through this nightmare and decided to do something about it. He was aware of the capabilities of GNSS systems from his background as a recreational sailor and pilot and wondered why GNSS systems were not being used to track pets. He found there were some products on the market but they all had flaws so he founded Pod Trackers in 2014 to develop an animal friendly GNSS device to track pets.

He wanted a device that was small enough to work with small pets like cats. It also had to be waterproof, comfortable for the pet to wear and difficult for them to bite, easily attached to any pet collar and with GNSS and cell phone electronics to track the pet and communicate the location to a smartphone or computer using the mobile phone network. He put together a team in Australia which designed and developed a prototype unit. Pod Trackers explored Australian manufacture but found that for high volumes the cost per unit of manufacturing in China was half the cost of manufacturing in Australia so the team spent extensive time in China finalising the production design. Within 12 months the Australian team with their Chinese manufacturing partners designed, built and launched the Pod GPS Pet Tracker, which at 50mm x 23mm and 29 grams is one of the smallest GPS devices in the world.

A year later the product is really starting to take off. This small start-up now employs 11 staff and generates several million in annual revenue with both staff and revenue numbers expected to more than double in the next year. Pod Trackers is also rapidly expanding offshore. It has secured retail marketing agreements with the major pet stores in Australia and the US with the UK and Europe expected to follow and has established subsidiaries in the US and UK to run operations in those markets. Export revenue alone is expected to drive the business to over $50 million within the next three years.

And it is not just the pet industry that is following this project. The tracking and reporting device, with its small form factor and powerful GPS, Wi-Fi and mobile phone electronics embedded within, has potential applications well beyond the animal world. Pod Trackers has now been approached by the US Department of Defense, the Australian Department of Defence as well as other companies that have a need for lightweight, long life location tracking and reporting applications.



In spite of the stunning success of the Pod GPS Pet Tracker device CEO Sebastian Langton points out that, “Data is going to be the biggest asset of the company.” Pod Trackers now has more than 5 million records on real world pet activity in their system and are rapidly becoming one of the world’s largest sources of information on domestic animal activity. Pod Trackers has only just begun to assimilate this data but the potential to understand pet behaviour and make recommendations, like knowing when they are acting outside their norm and perhaps need medical attention or a different diet, is huge. Sebastian ultimately sees this diagnostic information about your pet as a potentially larger market than the sales of the Pod GPS Pet Tracker device itself.

Pod Trackers is an interesting example of the major trends occurring in the commercial space industry – the innovative use of space-derived data to produce a product to meet a need in a niche market that results in significant spin-off possibilities into other markets. It is interesting that Pod Trackers does not see themselves as part of the space industry per se, which is common among many companies using space-derived services – particularly GNSS applications. They see themselves as part of the pet industry, the wholesale/retail sales industry and ultimately the information industry and yet their product relies on the ubiquitous nature of the space-based GPS positioning signal. This is a clear example of how in 20 years space-based GNSS positioning signals have developed into essential infrastructure that underpins many aspects of our modern society and continues to provide significant opportunity for commercial innovation.

7.2 Regional Markets

As noted above there has been a proliferation of Governments in the Asia Pacific region developing domestic satellite programs as a result of the growth in capability of small satellites. Many regional countries have begun developing their own domestic space capabilities built around this class of spacecraft, typically spacecraft with a mass of around 100kg. The trend that started around such small satellites has also now extended to embrace cubesats as the perception of their utility is growing. While these countries have purposefully set out to develop domestic space capabilities there is no country outside of Japan, India and China that has been able to develop a domestic spacecraft exclusively with domestic capabilities. Inevitably some aspect of the spacecraft and its deployment has been acquired through the global marketplace. As a consequence there are regional opportunities for Australian capabilities.

Particularly in the Asian region there has been a strong influence of people within national programs having received some of their space related education in Australia which has forged links to Australia and Australian companies. The national programs in this region are also more open to the involvement of Australian companies and capabilities than is the case in other parts of the world. Often their budgets are much tighter than say for a comparable program in Europe. It is also the case that it can be harder for some countries in the region to access US and European technology due to ITAR and similar technology restrictions. These present potential opportunities for Australian companies to be involved in regional supply chains.

7.3 New Space Markets

In recent years new terminology has emerged to describe the evolution of the space industry. When a number of billionaires in the US began spending their own private wealth on pursuing commercial space endeavours this was seen to be the beginning of a new era in space development. While



wealthy individuals like Elon Musk applied significant amounts of their personal wealth to financing new launch vehicles to compete with the established US military industrial complex, others like Robert Bigelow founded Bigelow Aerospace to build and operate space stations; Richard Branson backed Virgin Galactic to explore space tourism, and Paul Allen pursued StratoLaunch. Following in their footsteps a new breed of more commercial space companies emerged backed by newly awakened interest in the venture capital arena. Companies like Xcor Aerospace, Deep Space Industries, Orbital Outfitters and NanoRacks emerged to perform activities in a commercial way that were often seen previously to only be the domain of space agencies, or not perceived as commercial markets before that point.

A second wave of development often referred to as ‘Space 2.0’ has also emerged. While there is no clear definition of ‘Space 2.0’ as its name suggests it is seen as somewhat analogous to the rapid development that occurs within the IT industry. Rather than the development of large, long life, high reliability and capital intensive spacecraft of the past, the ‘Space 2.0’ philosophy embraces the cheap and simple capabilities of smaller spacecraft, whether that be cubesats, small satellites, or swarms of spacecraft. At its core is the rapid development of new capabilities with much lower capital cost and a much lower technology threshold to get started. Often these ventures will seek to serve completely new niche markets with very simple technology or explore new dimensions to an existing market. The US company Planet Labs is an excellent example of this trend. They used readily available ‘Off the Shelf’ (OTS) mobile phone based technology to test the concept for an earth observation system that offers near real time imagery of a much lower resolution than established systems. Their contention is that while most earth observation systems have sought continually higher resolution, there is actually another market that doesn’t need high resolution but does want constant or near real-time imaging. A part of the perceived market is closer to a true consumer product than the more high end products produced by other systems which often are combined with other scientific analysis to provide their utility. Planet Labs has now raised nearly USD $200 million in venture capital funding to build their constellation of satellites and has launched over 100 small satellites. This story is particularly interesting because one of the co-founders of Planet Labs is an Australian who now lives in the US and another co-founder is an American who spent considerable time in Australia.

The ‘Space 2.0’ evolution is an extremely important one for the Australian space scene as it lowers the capital cost to participate and also lowers the technology threshold to a level where Australian companies are eminently capable of participating.

Case Study 7 – New Space: Saber Astronautics

The “New Space” realm is one of the fastest growing sectors of the space industry, particularly the smallsat/cubesat area where 158 satellites were launched in 2014, a 72% increase over the previous year, and analysts predict that 1,400 - 2,000 (some say up to 2,500) smallsat/cubesat satellites are expected to be built and launched from 2016 through 2020. The smaller size along with the reduced lifetime and reliability expectations for these satellites significantly reduce the costs of satellite development bringing it within the financial and technical capabilities of small companies. A number of Australian start-up companies are forming to play a part in this fast growing sector of the market. One of the more advanced of these companies is Saber Astronautics.

Newly armed with a PhD from Sydney University CEO Jason Held co-founded Saber Astronautics in Sydney in 2008 to apply the founder’s backgrounds in space engineering, military space operations, data analytics, robotics and academic expertise to the rapidly growing space sector. The objective was to create an elite space engineering company with a strong focus on cutting edge research and development with application of academic



rigour using modern tools such as machine learning analytics, artificial intelligence and Big Data analysis to modern space missions and operations.

Based on the founders’ backgrounds in spacecraft mission control and strong capabilities in machine learning analytics Saber began developing a powerful new next generation mission control software system based on machine learning. Saber’s Predictive Interactive Ground Station Interface (PIGI) software combines satellite systems status, space environment status and spacecraft control tools into a single, simple user friendly interface. In many current operational environments these aspects are held on separate systems. The PIGI software combines these systems into a single interface with diagnostic tools that assess the most probable cause of a fault, the potential impact to the spacecraft and provides the operator with recommended actions to minimise damage to protect the spacecraft. With this technology, operators can track the paths of defects as they cascade through spacecraft subsystems to make safer, more responsive corrections. The machine learning aspect also provides a powerful predictive tool which enables more refined and optimised operation of the spacecraft which helps improve efficiency and extend spacecraft life. The software is now being trialled by the operator of the US GPS constellation, a major Fortune 500 company in California and several universities.

While initially designed to provide efficiencies with large spacecraft operations the software analytics have spin-off applications in many other fields. Saber Astronautics has used this software in projects for the utilities, power generation/distribution and financial services industries.

Saber Astronautics also sees a big market in the smallsat/cubesat revolution. All satellite operators need a ground network to operate and receive data from their satellites and many smallsat operators do not have the scale to develop their own ground networks for global coverage. To address this need Saber Astronautics has developed its Responsive Space Operations Centre (RSOC). The system is based on satellite ground stations in Sydney, Colorado, the UK and Northern Canada underpinned by the PIGI software. Saber Astronautics offers levels of service ranging from simple retrieval of spacecraft data to direct command and control of the satellite through to full diagnostic and predictive tools to optimise satellite performance.

Saber Astronautics uses its space engineering skills and cutting edge R&D to address problems across many areas of space. A big issue with the proliferation of cubesats is de-orbit after end of life. De-orbiting cubesats is a challenge due to the absence of thrusters and power limitations but leaving them in orbit creates a significant orbital debris issue. Saber Astronautics addressed this by creating a low-cost, small size, low-mass deployable tether system which interacts with the earth’s magnetic field to produce an electromotive force that gradually de-orbits the spacecraft. During the rigorous testing of its DragEn Tether Deployer system Saber Astronautics became one of only two organisations outside the US (along with Oxford University) to be accepted into NASA’s Flight Opportunity Program (FOP). This enabled Saber Astronautics to extensively test the deployment mechanism in weightless conditions via the NASA parabolic flight test aircraft. NASA sees this as a key technology and has been very supportive of the program. Saber Astronautics has just shipped the first flight unit to its initial customer, Manipal Institute of Technology in India, for use on their 2U cubesat scheduled for launch in 2016.

Jason Held claims that, “US companies don’t want to buy Australian products – they want to take Australian IP and sell it as their own.” According to Jason “Saber Astronautics got no traction at all within the US as an Australian company but began to get a lot of interest once we established a US subsidiary. Having an American company to sell into the US market



made all the difference.” He suggests that the challenges of operating a space business from Australia include Australia’s physical distance from the big space markets and a lack of a local space economy. He sees evidence of Australia’s poor commercial space brand, which stems from a perception that while our research is good, “Australia really does not do business in space.” Jason argues that these factors are “big hurdles for Australian space companies to overcome.”

Saber Astronautics believes that cutting edge R&D is the key to maintaining a business advantage as a high technology company and it has established a somewhat novel method to ensure it maintains its edge. Saber now runs a space internship program to attract high calibre space talent. Interns work on cutting edge space projects and at the end of their three or six month internship Saber Astronautics uses its worldwide connections to find them placements within the space industry. This internship program has gained significant attention and Saber now receives up to 150 applications per year to fill between three and ten positions with approximately 40% of the applicants coming from overseas. This program provides Saber with a steady stream of highly qualified and committed individuals enabling Saber to push the boundaries with cutting edge research looking ten years ahead on the space technology curve.

Saber Astronautics is an example of a young company embracing the opportunities of the commercial space revolution and in its own way starting to change the perception of Australian space.

7.4 Key Issues for Australian Participation in Global Supply Chains

During the interviews while discussing the space capabilities of Australian companies and their experience in attempting to forge a place within international global supply chains a number of significant issues became apparent. Some of these issues are peculiar to a particular service domain such as satellite communications, while others relate to more general issues to do with technology and regulation. Some issues revolve around the fact that a significant portion of the companies with space capabilities are SMEs with attendant issues relating to their size. Another key area relates to how Australian companies are perceived on the international stage.

At a global level the space industry is a highly regulated industry. Given the civil / military dual use aspects of much space technology restrictions on technology transfer are a well-known constraint on international collaboration in space. While constraints on technology transfer are an impediment to the ease of doing international business and certainly can cause issues for many companies, particularly SMEs who struggle with the costs associated with compliance, they can be a two edged sword. One multinational company specifically observed that it was easier for their corporation to operate into Asia from Australia than from the US due to ITAR restrictions on their US staff. The observation was made that while Japan and Singapore have a high degree of respect for the US other countries in the region are more comfortable dealing with Australia.

Regulatory issues were also something singled out within the satellite communications domain. One of the key inhibitors for Australian companies pursuing opportunities in international markets is the difficulty in obtaining licenses to operate in overseas countries. Even when following the business needs of existing customers many companies reported that obtaining the right to operate in some countries required partnering with local companies in those countries. An adjunct problem, though more specifically cited in the Precision Navigation and Timing domain, was difficulty or delays in obtaining local electronics and communication certifications for products in other markets.



Probably the most pervasive issues were those that relate to difficulties that confront SMEs due to their limited staff size, revenue and balance sheet. It should be noted that many of the challenges confronting space industry SMEs are not unique to the space industry but are common to SMEs across many industry sectors. With space being a global industry it is dominated by some very large prime contractors which often have much more elaborate business processes than smaller Australian SME companies. Space business also often involves work on government contracts which also have significant compliance costs. A number of companies remarked about the cost difficulties of dealing with large prime contractors. Some SMEs commented on the higher compliance costs and the additional resources particularly in terms of time and staff required to fit into the prime contractors’ way of doing business and the challenges of building a workable relationship between a large international prime contractor and a small Australian company. The long gestation times for projects in the space industry can be very challenging for SMEs. Companies reported that it can often take years for a contract to be awarded and while the big primes have the resources to wait it out this presents serious challenges for SMEs. The long term delivery cycle of some programs can also be an issue of SMEs. One company reported that despite having the preferred technology it lost the contract because the prime deemed their balance sheet insufficient to handle a multi-year program. Even with superior technology it is often hard for an SME to overcome the perception that being small carries higher risk in a risk averse industry. Several companies noted that the key issue is how an SME can gain credibility with the big primes and get the chance to perform. The comment was that this can be a slow process to build the required level of trust and win the first job particularly when dealing with international vendors with different ways of doing things. A number of companies remarked about the specific difficulties Australian companies face when attempting to break into space global supply chains. Companies commented that industry credibility is an important factor and Australia is generally not perceived as being active in space which creates a credibility gap for Australian companies trying to participate in global supply chains. Participation with major partners on space projects is one of the key methods to gain recognition by global supply chains in this industry. Companies felt that Australia is not perceived as a contributor in these ventures hence Australian companies find it harder to gain experience and credibility that is visible to prospective international partners.

Cost competitiveness is also important, although in some areas superior technological skills outweigh cost issues and make Australian capabilities attractive on the global scene. In general some of the larger international corporations are eager to work with Australian SMEs on local projects, however it is clear that the limited financial strength and staff size of many Australian space companies can be an impediment to collaboration on major projects hence constrain engagement at a global supply chain level. Ironically some companies felt that there is a perception in Australia that things invented in Australia are not credible until adopted overseas. These comments were generally focused on experience with Defence procurements and several companies cited examples of how the ADF did not consider their products until they had been purchased by the US Military.

The tyranny of distance is also perceived as real for Australian space companies. The issue of distance (and hence cost) make it difficult for companies to have a persistent presence, become known, and hence gain traction in Europe and the US which are two of the largest markets. Fluctuations in the exchange rate were also cited as an issue. For those who were exporting the drop in the Australian dollar has been beneficial overall but for those using US based suppliers it has had a sting in the tail in so far as their supplier costs have risen. Overall though it is perceived as having a beneficial effect, however transient.

Companies operating in the earth observation domain also identified some issues peculiar to their area of activity. There is a sense that there is a lack of appreciation of the value of earth observation data in Australia, especially as compared to that throughout Asia. Another concern peculiar to the Australian market was the issue of the creative commons approach to licensing in Australia which is



apparently not done elsewhere in the world. Multinational companies are not prepared to accept the creative common terms for the small amount of business that they perceive in Australia. Issues of a more commercial or contractual nature included license restrictions placed by satellite imagery providers on which markets Australian companies can sell to and for how long. This provides a serious limitation on their ability to operate in international markets. In addition satellite imagery providers will often handle the larger markets like Defence themselves thereby also curtailing scope for the Australian company’s activities.

Three additional broad observations were noted. One was the cost of effective technical staff. In the precision navigation and timing domain companies noted that it takes two years of on-the-job training for new staff to be effective. This was a cost burden that some found hard to sustain and which in part led to some types of work being moved to other parts of the world such as Brazil. Another pervasive issue was the lack of seed capital to move innovative ideas forward. Another perceived issue was the difficulty of getting customers to try something new and to manage their expectations about risk with new systems.

In spite of these various issues and challenges this study shows that there are examples of Australian companies that are operating successfully in the global space industry.



8 Growth Opportunities in Space Applications for Domestic and International Markets

This chapter examines the growth opportunities in space applications that were identified by the companies interviewed. An analysis of specific and generic opportunities is provided for each of the three primary service domains of satellite communications, earth observation and satellite position, navigation and timing.

In This Chapter: - 8.1 Key Growth Markets in Space Applications

- 8.1.1 Satellite Communications - 8.1.2 Earth Observation - 8.1.3 Position Navigation & Timing



8.1 Key Growth Markets in Space Applications

Growth in the area of space applications is a combination of both greater depth of utilisation within existing industry sectors and expansion into new industry sectors. It is also being fuelled by the transition towards consumer level products and services that is occurring across all three service domains. More ubiquitous access to space enabled products and services is driving constant development of new and innovative ways to use space derived data. A number of key growth opportunities in space applications were identified during the course of this study. These opportunities are generally best considered by service domain.

8.1.1 Satellite Communications

Companies involved in the satellite communications sector identified growth opportunities in a variety of areas including those pertaining to the corporate enterprise arena and those relating to consumer markets.

The industry around provision of enterprise and corporate satellite services and VSAT services has changed dramatically in recent years. The expectations of younger users - their incredible need for connectivity even in remote areas - has forced companies in remote areas to provide broadband communications access to attract workers. This has increased the demand for satellite bandwidth to remote sites where previously the company only took enough bandwidth for company business. Another trend is the retention of satellite as a backup system. Previously if fibre came in satellite was dropped but now there is a trend to retain satellite capability and incorporate it into the backup plan and sometimes incorporate satellite into the new communications setup on site.

Emergence of new technologies is leading to evolution in the satellite communications ecosystem. The advent of High Throughput Satellites (HTS) and new satellite communications constellations will bring prices down. Cellular backhaul is growing in general and there is more use of satellites to alleviate network congestion - HTS will help directly with this. There is an expectation that the next big growth market will be mobility services via satellite – so called “satellite on the move”. There is speculation that there will be 25% compound annual growth in this market.

Another significant growth market is in the machine to machine (M2M) market and in personal communications in remote areas. The advances in antenna technologies and miniaturisation of equipment plus the growing demand for constant connectedness makes this a significant new market sector. The downturn in the mining business now means that mining companies need to be more efficient. Hence they are looking to communications to provide efficiencies. Thus M2M solutions are now more valuable to them as they can increase their efficiencies and reduce their costs with the right solutions.

There is also expectation that there will be satellite growth in the land mobile and aviation markets.

At the consumer market level Ultra High Definition TV will lead to growth and it could be a differentiator for broadcasters. Introduction of Ultra High Definition TV requires an entire ecosystem change including new TV's & set-top boxes but this will be easier now that TV digital conversion has taken place. The emergence of Ultra High Definition TV will lead to growth in satellite bandwidth to serve this industry.



8.1.2 Earth Observation

The traditional earth observation market involves applying scientific analysis to satellite imagery and the real value is in the interpretation of the science contained in various images. This requires high end images and involves higher cost. The resources sector has typically been a major market for earth observation data but new sectors are emerging such as insurance, agriculture, maritime surveillance, and environmental monitoring. The key is not the images themselves but producing meaningful and easily understood data that informs decision making or monitoring purposes.

The Earth Observation industry in general is growing worldwide and the pervasiveness of the industry is increasing. A key element in this growth has been the way Google Earth has brought earth observation into the mainstream including providing background images on smartphones. This has stimulated the way the images are used and created new applications for imagery. One example of this was US investment firms using satellite imagery to count cars in parking lots to estimate whether the sales of major retailers are on track. The development of innovative applications for earth observation data is the key area of growth and in that sense there is tremendous potential for growth from new ideas and applications identified by enterprising companies.

A recent development in the earth observation scene has been the development of systems that allow for constant refreshing of data rather than the more normal revisit times. An example of this is the Planet Labs model which for the first time will provide almost real time earth observation imagery which will provide new levels of information and change the way people look at things like the environment. It is anticipated that readily available images will generate new management tools and ways of doing business. Hence again this is likely to be a growth area as companies find innovative ways to make use of this new type of imagery and the data sets it can create.

8.1.3 Position Navigation & Timing

The mining industry, construction, agriculture and intelligent transportation systems are some of the key existing markets for satellite derived PNT.

The downturn in the mining sector is an issue for the satellite PNT market. As a consequence many companies felt the need to diversify into other sectors that need precision positioning like ports, construction and agriculture. While the downturn in the mining industry initially hurt the market for these services the need to improve productivity became the key for clients and better positioning and integrated information provides this. Clients now want integrated positioning and information services as standard functionality.

Australian skills in this area are very highly valued internationally and as a consequence there is significant opportunity for Australian companies to be part of the growth in this market. The agricultural sector in general is growing and the Precision Agriculture side of the industry will grow faster as agriculture looks for more efficiency and productivity with controlled traffic farming and retaining and measuring moisture in the soil. Another significant trend is towards autonomous vehicles in agriculture.

In a similar vein Australia’s skills in this area are well regarded by OEM’s in the mining sector and as a consequence at least one large OEM does its mining product development work in Australia in preference to Europe. The mining business is seen as high end with higher value involved which in turn means it can afford high quality work done in Australia. Thus growth in the mining sector presents real opportunities for Australian involvement.



The mass market penetration of GNSS enabled devices has allowed geospatial data to reach the consumer level. One Australian example is the integration of GPS enabled tags to monitor the location of pets which has turned into a rapidly growing business with international markets. The ubiquitous availability of GPS enabled devices combined with other data sets means that a huge array of potential markets are waiting to be identified and developed by innovative companies.

The adoption rate for precision machine guidance in the construction industry is increasing. The Australian construction industry was an early adopter and continues to grow steadily. Use of precision positioning is growing in Australia for the simple reason that it saves money in the long run. It streamlines operations in construction reducing the overall time on the job. It also enables a higher level of quality assurance in everything, one example being rollers on the road in construction measuring the surface heights to know when the job is done.

Another area of opportunity identified during the study is in providing services into the public sector in Border Protection, Defence, Public Safety Agencies, Utilities, Education, Transport and Emergency Services.

The automated transport industry is a huge market with tremendous potential. Autonomous vehicles are finding their way into a growing number of industries and represent another growth market. Non-traditional vendors like Google and Facebook have taken geospatial information into the consumer realm and this is driving new innovation and growth.



9.0 Conclusion

There is no doubt that the space industry globally is growing at a significant rate and that commercial space activity is the dominant component of the global space economy. There are also changes within the commercial market as space technology becomes more available and directed towards the large consumer market spawning growth in innovation and defining new markets for space enabled services. Space technology itself continues to evolve and the advent of cubesats and the New Space era have created new ways of doing things in space. It is against this background that Australian companies are developing their space capabilities and with this new paradigm that Australian Government must use as a frame of reference for future policy deliberations.

Australian companies have capabilities in most segments of space activity but the greatest concentration of capability lies in the areas of ‘Ground Systems’ and ‘Space Enabled Services’. While the ‘Space Systems’ segment and the ‘Launch Systems’ segment remain largely capital intensive the emergence of new applications for cubesats and a move to field much smaller launch vehicles for them has opened the door for possibly greater Australian participation in these segments. Nevertheless the primary area of opportunity for Australian companies lies in the fastest growing area of the global space economy which is in ‘Space Enabled Services’. Given its geography and demographics Australia is a unique market in which to develop ‘Space Enabled Services’ and this is reflected in the strength of the skills and abilities that Australian companies have across all three of the primary service domains of satellite communications, earth observation, and satellite position, navigation and timing.

The nature of global supply chains has changed significantly over the last fifteen years with more capable small spacecraft dramatically changing the landscape. Moving from national Government programs in a handful of countries to a plethora of much smaller national programs and an ever growing roster of commercial spacecraft operators has led to the creation of more truly global supply chains. The move to the manufacture of smaller spacecraft and growing regional markets have opened new opportunities in global supply chains as newer companies and smaller countries are more open to new suppliers.

In developing their capabilities in ‘Ground Systems’ and ‘Space Enabled Services’ to meet domestic markets, Australian companies have developed capabilities that can fit into global supply chains. There are however impediments to these opportunities, some of which relate to the physical and financial scale of most Australian companies which tend to fall into the SME category; regulatory hurdles including technology transfer and access to foreign markets; and a general perception that Australia is generally not active in space which creates a credibility gap for Australian companies attempting to break into global supply chains.

As with the other aspects of the space industry and global space economy the markets served are changing and expanding. The growing hunger for data is making satellite communications increasingly important especially in remote and distributed locations. The need for greater efficiency and productivity coupled with the explosive proliferation of GPS enabled devices is driving significant growth in the utilisation of earth observation data and satellite position navigation and timing data. Industries like mining, construction, agriculture and intelligent transportation systems are making ever greater use of ‘Space Enabled Services’ while at the same time new markets are emerging in areas like ports, emergency services, Border Protection, Defense, Public Safety Agencies, Utilities, and Education. Even new consumer markets like pet tracking are emerging as ubiquitous access to GPS enabled devices transforms the landscape.

This study has shown that Australian companies have relevant capabilities and world class skills in areas that feed into the rapidly growing global space economy. While there are certain challenges to



entering the space global supply chains this study has identified a number of Australian companies that have already achieved various levels of success and that there are exciting opportunities that lie ahead for Australian companies in the space industry of the future.



Appendix A – Companies Interviewed and Their Space Capabilities

Company Name

Space Systems

Launch Systems

Ground System

s

Space Enabled

Services

Support Services

Space R&D

Education &

Training

ABS Satellite l l l

Airbus Defense & Space l l

AITC l l l l l l

Auspace l l

Boeing Australia l l l l l l

Clearbox Systems l l l

Cygnus Satellite l l l l

Delta-V l l l l l l

Dialog Pty Ltd l l l l

EM Solutions l l l l

EOS l l l l l

ESS Weathertech l l l l

Farmscan Ag Pty Ltd l l l

Foxtel l l

Fugro Satellite Positioning l l l l

Geoimage Jensen Bowers l l l l

GPSat l l l l l

HexiGeo l l l

Intelsat l l l l l

ITC Global l l l l

iVolve l l l

Leica Geosystems Pty Ltd l l l

Locata Corporation Pty Ltd l l l

Lockheed Martin Australia l l l l l l

M2MConnectivity l l l

NBN l l l

Northrop Grumman l l l l

Nova Systems l l l l l l

Optus Satellite l l l l l l l

Pivotel l l l l

Pod Trackers ANZ Pty Ltd l l

Position Partners l l l l

Precision Agriculture l l l l l

Raytheon Australia Pty Ltd l l l

RPS Group l l l

Saber Astronautics l l l l l

Silanna Semiconductor l l l l

Skybridge l l l l

Speedcast l l l l

Teakle Composites l l l

Telstra Global l l

Tidetech Pty Ltd l l l

Toolcraft Pty Ltd l l l

Topcon Positioning Systems Inc. l l

Trimble Navigation Australia l l l l

ViaSat Australia Pty Ltd l l

Documents

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