Part III of V: Strategic Importance
Continuing our bimonthly installment of So You Want to Start your own Space Agency?, part III of the series picks up where the previous installments left off by continuing with an in-depth look at starting a private space agency in the Caribbean. For the benefit of Astropreneurs just discovering the series, here is a brief recap of the last two installments. Inspired by Professor Marcello Spagnulo’s book Space Program Management: Method and Tools, Part I established four factors that will be used to explore and analyze case studies based on region-specific commercial space agency. The four factors are as follows:
- Corporate governance
- Strategic importance
- Extent of international participation
- Specific industrial and specialized sector
Part II of the installment focused on corporate governance in the Caribbean. It became apparent that while corporate governance is a complex topic in many countries, corporate governance in the Caribbean presents challenges that are unique to the region. A major reason for this is the fact that the Caribbean is a region composed of 26 countries and 7000 islands. As a result of the Caribbean’s composition, corporate governance is a) not uniform among the Caribbean and b) either not codified or has recently been codified in the last two decades among a few island nations. To establish a private space agency in the Caribbean, the location must be in a country that has corporate governance laws in place to foster corporate growth. Fortunately, the last installment highlighted two scenarios that would serve as suitable instances for our space agency case study. While this author admits that they are most likely more Caribbean countries that would be suitable for starting a private space agency, Jamaica and Curaçao seem to be advanced when it comes to applying corporate governance to a private space agency. Jamaica has one of the most comprehensive guidelines and codes structuring corporate governance in the Caribbean, and while Curaçao became an independent country in 2010, the majority of laws and regulations are based on their Netherlands counterpart giving them a strong foundation in terms of corporate governance. In addition, Curaçao has the benefit of having been in the process of developing a space agency with the development of Spaceport Curaçao.
For lack of a better word, strategic importance—in terms of autonomy of access to space and market access to commercial space—may be the most important factor of the four mentioned. Rightfully so, because technological advancement within the space industry goes hand in hand with not only military applications but with civilian applications. The most famous example of this is the invention of the Global Positioning System (GPS). Moreover, the capability for a nation to launch satellites beyond borders to connect other nations without using on-ground infrastructures is one of the many ways strategic importance allows autonomy of access to space and market access to commercial space. [Spagnulo, M.et al., Space Program Management: Methods and Tools]. While autonomy of access to space and market access to commercial space may overlap in many areas, Professor Spagnulo defines the autonomy of access to space as the ability to use one’s own launcher from one’s homeland. On the other hand, in short, market access refers to the ability of a country to sell goods and services across borders [Investopedia].
Traditionally, market access to commercial space was regulated to the military and communications sector. Dealing with the New Space sector, a sector defined by the appearance of non-traditional actors entering the commercial space market, market access to commercial space is no longer limited to the typical parameters of the military and communications industry. In fact, in July 2018, Spacenews.com published an article citing separate studies from Goldman Sachs, Morgan Stanley, and Bank of America Merrill Lynch that projected that the space industry will grow to a trillion dollars by the 2040s. As a result, that same article suggests that the industry must allow new markets to develop because a trillion-dollar industry cannot be supported by communications and military sector alone. The advent of commercial human spaceflight sector is inevitable and a top pick for the space industry’s supporting new markets. However, when speaking at the Space Frontier Foundation’s NewSpace 2018 conference, the University of Southern California’s Marshall School of Business’ Assistant Professor Greg Autry did caution the industry from being too speculative or trying to determine a roadmap for the industry. He has a point. Professor Autry compared this to the early computer industry where, initially, video games were not expected to play a large role in the industry. However, Professor Autry does mention that future growth may come from downstream applications, rather than space systems, so it will be interesting to see if app development grows concurrently with the commercial space industry. With this said, one question remains: how will we apply the autonomy of access to space and market access to commercial space (strategic importance) to the development of a private space agency in the Caribbean in a practical and realistic manner?
Strategic Importance in Developing a Private Caribbean Space Agency
Astropreneurs are able to follow subsequent installments of this series because tangible examples of Caribbean space activity exist and this allows readers to not only analogize with the business case study, but to disagree or agree with this analysis. This series are important not only because it gets the conversation started regarding why the Caribbean needs a space agency (hint: to build resilient infrastructure), but more importantly because it discusses how to implement a Caribbean space agenda (more to follow in the Extent of International Participation installment).
For instance, regarding the autonomy of access to space and the Caribbean’s ability to use one’s own launcher from one’s homeland, despite the absence of an official Caribbean launch, the Caribbean has been making progress to have a launch come to fruition. This series has already highlighted the Caribbean Spaceport initiative that was backed and supported by XCOR Aerospace as well as the Curaçao government. Moreover, in 2018, the Global Startup Ecosystem (GSE) announced plans to launch the Haiti Space Agency (HSA) with government and private sector partners in Haiti. The concept of national autonomy can be a complex one to grasp when dealing with a region where 7000 islands constitute 26 countries. However, in these two separate examples, the Caribbean has exhibited its potential to access space from one’s homeland in the past decade. Imagine the capability to access space the Caribbean would possess if there was a unified Caribbean agenda.
Regarding market access to space, while the Caribbean region does not have access to traditional points of military and communication found in the commercial space market, the era of New Space presents more opportunities than ever for the Caribbean to enter the commercial space market. For instance, in this article we already discussed the inevitably of the commercial human spaceflight sector. While the development of the Caribbean Spaceport in Curaçao has ceased, it has established a blueprint for other Caribbean island nations that may want to follow. Furthermore, the number of NGOs looking to establish a unified Caribbean presence in space industry is not short. From the Caribbean Space Society to the Space Generation Advisory Council, these organizations must place emphasis on the Caribbean’s ability to enter the space market. Whether through initiatives that support Caribbean engineering companies, app development, or commercial human spaceflight, the potential is now there for the Caribbean to gain market access to the space industry. Ways in which the Caribbean region may gain market access to the space industry will be discussed in Specific Industrial and specialized sector. Stay tuned for the part IV installment analyzing the extent of international participation on determining the success of establishing a private space agency.
Posted by Mclee Kerolle