Space Resources.Lu

The Astropreneurs sat down with the Luxembourg Director of Space Affairs and the first Vice-Chairman of the ESA Council, Marc Serres, to discuss the pioneering New Space investment initiative, SpaceResources.lu. Luxembourg is THE European hub for space in-situ resource utilization (ISRU) and is the place to be for New Space startups exploiting all aspects of the space resources value chain. Luxembourg is a small, wealthy country with a serious vision for the future and is enabling the fruition of a sustainable New Space ecosphere to make that happen.

Marc Serres
Marc Serres

This article covers two main topic areas: Section 1 of the interview covers Luxembourg space and the development of the SpaceResources.lu initiative. Section 2 of the interview covers what Luxembourg has to offer New Space startups who decide to move their companies there.

Section 1: About Luxembourg Space

Astropreneurs: Could you perhaps tell readers a bit about who you are, your position, and what you do in the Luxembourg Ministry?

Marc Serres: So, I’m in charge of the Directorate of Space Affairs at the Ministry of Economy and this directorate is part of the larger Directorate General for Innovation, Research and Intellectual Property. This directorate is really in charge of developing the new, less traditional sectors in Luxembourg of which space is part of. In the past, support for the space industry used to come from the Ministry of Research. At that time, I was the first full-time employee educated in this activity and connected with the European Space Agency (ESA). In 2005, Luxembourg became a full member state of ESA and they opened this Directorate position. I was chosen for this position and although we started really growing this activity at that time, it was not possible to have more positions inside the Ministry. So, we started working with LuxInnovation by integrating their people (in charge of developing the space sector) into the Ministry of Economy last year. That started within the Ministry of Research but that changed in the last elections in 2013, where the space-related topics moved to the Ministry of Economy.

Space Forum 2018 Marc Serres
Marc Serres at Space Forum 2018

Astropreneurs: What history does Luxembourg have in Space?

Marc Serres: Well, we have a non-traditional way to address space. If you look at many countries, they started with research activities and many of them were member states of ESA. For example, before having any strong industrial and commercial activities, we in Luxembourg started practically from scratch in the middle of the 1980’s with the creation of a brand-new satellite operator, SES (Société Européenne des Satellites). We did that even before going into research activities with ESA and, at that time, Luxembourg took an enormous risk. There were many people skeptical of this approach. They thought commercial activities within satellite communications would never work, that it’s just a crazy idea. Today, this is a normal business. It was the first really commercial space activity and I think Luxembourg made the right decision to start this operator.

“…Luxembourg started practically from scratch in the middle of the 1980’s with the creation of a brand-new satellite operator, SES… There were many people skeptical of this approach. They thought commercial activities within satellite communications would never work, that’s just a crazy idea. Today, this is a normal business…”

That was really the start of space activities in Luxembourg. Then there was interest from the industries within Luxembourg, that started working with SES, to have some more support for research and development (R&D) activities and innovation. We first started a cooperation agreement with ESA in 2000 and, when we saw it was also really beneficial for our country, we decided to become a full member state of ESA in 2005. I would then say the next big milestone in our history was in February 2016, when our Deputy Prime Minister disclosed our intention to really look at the long-term perspective of using space resources. We will see in the future if this date will remain in history.

Place Guillaume II, Luxembourg city
William II Square (Place Guillaume II, also known as Knuedler) is the central square of Luxembourg city. The main focus of the square is the statue of Grand Duke William II (1840-1849), while the southern side is flanked by the Luxembourg City Hall, a structure dating from 1838 (with bright illuminations in the foreground of this sunset image). HDR image.

Astropreneurs: National Space Agencies have different roles in different countries. For example, the UK Space Agency (UKSA) acts as a funding entity for industry but agencies such as ESA and NASA also undertake their own ventures. Luxembourg has announced opening a new space agency of their own. Is the purpose of that space agency to serve the New Space industry or is it closer to an ESA/NASA setup?

Marc Serres: For the moment, we are still working and finalizing our concept of the agency. I will not say too much now; I will leave the privilege to the Deputy Prime Minister to announce. This will happen before the summer, but what I can say is we are not intending to reproduce a small-scale ESA. Our model is closer to the one of the UKSA where the core of our policy remains in industrial development. So, what we want here is really to create an ecosystem that is favorable to the space industry. We expect that all the things we are going to support financially are ideas from industry and it is very important to us that the companies do it with the perspective of making business. We will see if this changes in the future as there is also a question of the role of governments. Here, we help industries in financing/co-financing their innovative projects. This is the main role that would be transferred over to the space agency.

“…we are not intending to reproduce a small-scale ESA …what we want here is really to create an ecosystem that is favorable to the space industry… and it is very important to us that the companies do it with the perspective of making business…”

Astropreneurs: What types of New Space startups do you tend to invest in?

Marc Serres: That’s a good question. I think that until now, we were extremely open to a large variety of activities. I believe that now we might need to try to focus a little bit because we have resources, but we have limited financial resources. That means also that we have to try to put more focus on certain elements where we think companies are really fitting with Luxembourg. We are currently performing a more in-depth analysis of the value chains related to space resources and the results will only be known in the summer. Based on that, I think we will start reflecting and go a bit deeper into the type of companies that we would prefer to have in Luxembourg. But, for the moment, it’s more, shall I say, an opportunistic approach which is also very important by the way!
I think that having an approach that is too top down does not work. We also need entrepreneurs that are motivated, have concrete projects, ambitions, and have a means to do it. I think that means that this bottom up approach we are taking is extremely important. At the end, entrepreneurs have to do the job. We cannot do it for them.

SpaceCluster
The Luxembourg Space Cluster Catalogue

Astropreneurs: The US passed the Space Act in 2015 legalizing asteroid mining for the first time. What is the story behind how Luxembourg also came to the same conclusion, that the timing was right to pass a similar law?

Marc Serres: We started investigating the use of space resources about 2 years before we disclosed it. We reflected on it and, in 2014, we had a lot of consultations. Very quickly, this thematic of the regulatory framework was immediately something we knew we would be confronted with. So, we started an analysis with renown space lawyers from universities and we have also a well-known professor here at the University of Luxembourg who is dealing with that. This group of experts analyzed the situation on the international level, on the national level, and looked at the obligations of Luxembourg and the ways we could accelerate or facilitate business activities in that domain. The approach we decided to follow was to first have a law on the national level (which happened in 2016-17, effective on 1st Aug 2017) but this is just the first step. You most probably need also to go into an international framework.

“At the very beginning, when some talked with us about this subject, we were just saying that it looks more like science fiction. And very rapidly, when you dig a bit into the topic, you discover that it’s not science fiction any more, and a lot of people don’t know that…”

Some say that the moon treaty is already a safe sort of first draft of what could be this international framework for the use of space resources. We are not sure that this is the right way to do it, but we are still going openly into these discussions. We are very active on an international level to see what the best way would be to deal with it on an international level. We are very active on the UN-COPUOS (that’s The United Nations group that deals with the space treaties) and an informal group that has been formed in The Netherlands called the ‘Hague Space Resources Governance Working Group’. We really try to participate in this dialogue to bring our reflections and questions so that hopefully, in the perspective of maybe a decade or so, we will also have concrete steps on an international level.

Astropreneurs: What initiatives do you have available? Perhaps you could tell us more about the SpaceResources.lu initiative specifically.

Marc Serres: When we started this initiative, we thought that it was extremely important to have a clear strategy on what we would be doing and we organized that around 5 pillars.

  1. Promotion and Creation of Awareness:

At the very beginning, when some talked with us about this subject, we were just saying that it looks more like science fiction. And very rapidly, when you dig a bit into the topic, you discover that it’s not science fiction any more, and a lot of people don’t know that. I think it’s extremely important at various levels that we explain what we do, starting at the level of the citizens. In the end, we use taxpayer’s money to develop these new activities and we need also to have some support at political level, national level, and also the international level. So, this is definitely one of the pillars that’s taken a lot of effort for the moment. We are talking with a lot of people and this initiative gives our national policy real international dimensions.

  1. Build Regulatory Framework:

This is what we discussed just before, so I will not talk more about that now.

  1. Education Research:

What we see here is that a lot still needs to be developed. I would say here we are talking about something that is long-term, with a lot of research still to be done. We would like to create this research framework inside Luxembourg and link it immediately with education. I think this is something that you cannot really decouple; the educational system and research. And so, we have started first doing a bit of survey on the national level of who is doing what in the different research labs. We have also started addressing experts internationally to understand what they are doing and what other initiatives have been undertaken. We have seen various interesting initiatives in the US and a lot is happening in Australia. Even in Europe, you have very enthusiastic scientists that are really willing to drive new initiatives. So, this is work that is still on-going, but I think that we will also be able to come up with more concrete steps toward the end of the year.

“…we would like to create this research framework inside Luxembourg and link it immediately with education. I think this is something that you cannot really decouple; the educational system and research…”

  1. Innovation Research:

This, I would say, is the more traditional thing we have been doing since we became a member state of ESA. Here we have sort of a dedicated budget for space resources and the idea really is to support R&D inside the companies on that topic.

  1. Financing:

This pillar is different to pillar 4 because what we have identified is that having R&D grants is certainly a very important tool and an instrument for supporting the development of industries, but sometimes this resource is not the only need companies have. This idea is generally true for so called ‘New Space’ companies. What we have also identified is a clear need of capital investment, meaning the companies also need money that is not purely identified for R&D. So, we are currently working on setting up an investment fund, which will be located in Luxembourg, for which the government will certainly be a first anchor investor. But, clearly, our objective here is not to have a purely public investment fund. It will be a public-private partnership in that sense because we will also attract private investors. This fund is something that is running full speed, and it’s not so easy to do, but we are quite optimistic that we will be able to have a first closing before the end of the year.

Section 2: Questions from the Space Entrepreneurs

I have some questions for you now that space entrepreneurs might be interested in hearing about.

Astropreneurs: What funding schemes are available in Luxembourg, and what range of funding amounts do you provide?

Marc Serres: From the funding point of view, we have no specific ranges of financing. The financing strongly depends on the company’s project because you may have smaller ones who will have smaller needs and ambitions and others that have many ambitions and needs. What we try to do here is really adapt to the needs of the companies. There is in that sense no specific threshold defined in financing. That may be a bit different for the investment fund, but this is still to be exactly defined, knowing it will primarily provide early investments. So, the level is not fully defined yet, but at least for the investment fund, financing ranges will be defined more clearly. For the R&D grants, I would say that it will vary depending on what the needs of the company are.

“…What we try to do here is really adapt to the needs of the companies. There is in that sense no specific threshold defined in financing…”

Astropreneurs: With a focus on big projects like asteroid mining, it seems like you are taking an optimistic but long-term view in your space resources investment strategy. How important is it to balance the long-term strategic vision with finding nearer term sources of revenue for the New Space investments Luxembourg will support?

Marc Serres: Well, that’s really a key element; the difficulty in having companies already active in space resources, because it’s so long term. I think the balance between trying to address this long-term vision, and having already short-medium term revenues, is extremely important because otherwise you cannot have any active commercial entity. This long-term research is the type of thing you can do with public research, but this does not work with companies. So, they have to already have ideas on how they will create revenues and survive along this path to the long-term vision until it really materializes. I think this is where the challenge is.

“When we try to support these companies, we always insist a lot on this sort of parallelism to have a strategy on the shorter term and a strategy on the longer term, and how one supports the other. This is really key, but it is very difficult…”

When we try to support these companies, we always insist a lot on this sort of parallelism to have a strategy on the shorter term and a strategy on the longer term, and how one supports the other. This is really key, but it is very difficult. It is really one of the most difficult challenges for companies – to find out how they can generate revenues on the shorter term when they are already pursuing something that is long-term.

Astropreneurs: What would you argue are the main advantages to New Space Resource startups who move to Luxembourg? What makes Luxembourg so unique/attractive?

Marc Serres: So, what do we have more than the others? I would say that from those that are here already, what they tell us is that they come here for 2 reasons.

  1. The vision and the weight this sector has in Luxembourg – A lot of countries are active in space, but not so many are really putting this sector on a pedestal.
  2. Companies expect to have financial support when they come to Luxembourg – I think our Deputy Prime Minister made it clear very early in the process that we would have the means to support companies.

This statement is true but, having said that of course, it is not easy money. What we want to do is have a sustainable landscape in Luxembourg. We are also quite demanding with the companies that want to establish in Luxembourg because they have to show us that they are not just coming, taking the money, and putting it somewhere else. Here, we really want to see that they come to Luxembourg because they have a strategic interest to be here. Of course, the availability of funds is an important part, but it cannot be the only decision criteria, I would say.
We try to also help here by developing these ecosystems. It’s not only purely funding that enterprises need, but it’s a framework where they can develop their activities because they are close to investors, close to researchers, they have easy access to the politicians, and because they have clear support from the local organizations when they have regulatory or other issues to solve. It’s more than just a financial envelope that we have here. We really want to make it easy for these space companies to develop out of Luxembourg.

“…It’s more than just a financial envelope that we have here. We really want to make it easy for these space companies to develop out of Luxembourg…”

Astropreneurs: We may have people who have a great idea but have not opened a business before. Do you have support services for people starting a new company?

Marc Serres: What we are trying to do now is to put the future space agency as a one-stop shop for all these companies. Whatever they need, if we cannot provide it, we will have a partner that will provide it. That concept is very important to know. We will really try to help with all types of a company’s needs. We have already set up organizations like the House of Entrepreneurship, who are there to help companies, not only space companies. We have already involved them in the support of companies that come from abroad to establish in Luxembourg. Generally, the Chamber of Commerce has excellent services for the established companies, and LuxInnovation is also a big supporter. We will try to involve all these actors in these space activities so we can have solutions available when the companies have needs.

House-of-Entreupreuneurship-signage-by-Twodesigners_Copyright-Germain-OZER_DSC3094
House of Entreupreuneurship (Credit: Germain Ozer)

Astropreneurs: What incubators/accelerators are available?

Marc Serres: For the moment, there is no space-specific incubator. We have a national incubator in the South of the country called the Technoport, which is very active. I think now we have 3 or 4 space startups that are already established there, but it’s not the only place where you can start your startup. There is also another incubator, the Paul Wurth InCub. Paul Wurth has shown a very big interest in supporting these type of activities or companies. It has at least 1 that is now established in this incubator, but there may be others. Now, we are only focusing on our national incubator but, if other incubators are there, they are interested, and they can offer the right services to companies, we will certainly work with them. Having said that, our dream would be really to have some sort of ‘space campus’ where we could really mix all types of players: investors, bankers, researchers, and students, with startups and established companies to create this cross-fertilization.  We have started working on this idea and it is certainly something that may happen. But, of course with a big project like this, and with the perspective of the election in October 2018, it will be difficult to have some concrete proposals until then. But, this idea is certainly a file that the new government will have to deal with for the next few years; it’s possible because we have a lot of things that we still want to build up.

“…our dream would be really to have some sort of ‘space campus’ where we could really mix all types of players: investors, bankers, researchers, students, with startups and established companies to create this cross-fertilization…”

Astropreneurs: Our readership is international by nature so they may be wondering, how open is Luxembourg to entrepreneurs from countries across the globe?

Marc Serres: Besides these more professional services that we can offer to companies, one aspect that people also discover when they come to Luxembourg is the multicultural and multilingual environment here. And, in fact, Luxembourg is very small but very open and this is sort of a receipt for our success, all the people that come from abroad, because we need many people from abroad. We have practically 40% – 45% of the active population of Luxembourg not living in Luxembourg. They are coming from Belgium, Germany, and France. This diversity creates an atmosphere where anybody coming from anywhere feels at home, which is very different from other countries. I think this is something that people don’t know about Luxembourg, and they discover it very often, or at least that’s what they tell us. That’s what makes it easy for people to move to Luxembourg and live here, even if you come from different cultural origins.

Astropreneurs: Thank you very much for your time Marc. It has been great speaking with you.

Posted by Toby Mould