We're all in awe of how Rocket Lab has made the narrative about the Mahia Peninsula and Wairoa economy about space as much as about primary industries and summer tourism. But the space industry is rapidly spreading out right across NZ too.
Christchurch has had its own "big bang", with an aerospace meetup group led by Kea Aerospace CEO (and Rocket Lab co-founder) Mark Rocket growing from 30 or so people to well over 200 in less than two years.
Xerra (NZ's Earth Observation Institute) may be based in Alexandra, but has staff based around the country, including in Nelson and Auckland.
Leo Labs ("low earth orbit") is a world-wide radar network addressing the problem of avoiding collisions in space, and are basing their new NZ facility in Naseby, also in Otago. Rocket Lab's rockets are built in Auckland, also home of Extraterrestrial Power which is looking to generate electricity on the Moon, and where the University of Auckland recently launched Te Pūnaha Atea, its new Space Institute.
Space keeps getting bigger
In the early 20th century Edwin Hubble and others found that the universe is expanding- leading to the concept of the "big bang". This expansion was captured in what is now called Hubble's Law, and the rate of expansion is called the Hubble constant.
In 2019 scientists at The Johns Hopkins University found that the universe is expanding 10 per cent faster than that predicted by Big Bang, meaning the guys in white lab coats may have to go beyond Einstein and Hawking to explain what's happening in the cosmos.
In an interesting parallel, not only is space "out there" growing faster than was thought, but space "down here" is also expanding at an increasing rate - including in New Zealand.
While predictions about any sector's unprecedented expansion should be met with caution, investment experts have started to yield to space optimism. Several have forecast the size of the space economy to reach between US$ 1 trillion (UBS, Goldman Sachs) and US$ 2.7 trillion (Merrill Lynch) by 2040, which is just around the cosmological corner for an industry gestating since 1957.
While experts debate the numbers, one thing is clear: the speed of growth is accelerating and it may surprise us with just how big it will be.
According to the Space Foundation, in 2018 the global space economy broke the US$ 400 billion threshold for the first time – an 8.1 per cent increase from 2017. New Zealand's share is estimated to be NZ$1.75 billion NZD (0.27 per cent of the global space economy) in 2018-2019, and many things speak for its growth in the near future.
Nicholas Borroz from the University of Auckland Business School has warned of a possible global "space bubble".
"There will be significant consolidation in the next decade. Many space companies will be swallowed by competitors. Many firms making headlines today will not be around tomorrow. Many investors putting their money in the sector are going to lose that money."
Reflecting on the positive experience of Rocket Lab, Boroz argued that the government should avoid propping up unsuccessful firms.
Boroz supports the establishment of the New Zealand Space Agency to ensure policy and regulatory certainty and believes the government should still channel some funds through innovation agencies and universities, but cautioned that its support should be reserved for firms that have managed to independently establish their line of business.
We might be inclined to dismiss New Zealand's slice of the space sector as being insignificant. But it conforms precisely with what the late Paul Callaghan spoke about a decade ago- to be truly prosperous New Zealand needs to nurture and grow a handful of globally facing high technology firms who do "weird" things. If anybody had said 15 years ago that New Zealand would have a space industry, that would have indeed been very weird. But in 2020, fewer of us are that surprised at just how important this industry is becoming, globally and for New Zealand.
Dual opportunities
The space economy consists of two large markets. First, there is the traditional space-to-earth market comprising all technologies and activities that either deliver something to space (for instance, manufacturing rockets that bring satellites to orbit) or deliver something from space to earth serving the earth economy (for example, satellites broadcasting or relaying telecommunications).
Second, there is an emerging space-to-space market of goods and services produced in space for other space activities. Mining of asteroid and planetary resources to sustain human and robotic space missions is just one example. This market is at an early stage of research, testing, developing viable business cases and attracting initial investment.
The space industry in New Zealand has been commercially-led and fostered, occupying the niche of dedicated small launch vehicles and payloads (space-to-earth market). The market for small satellites is growing exponentially, with several hundreds of them being launched every year.
Over 10,000 small satellites will be launched by 2030. Small satellites, which are anything under 500 kg (with the smallest weighing less than 1 kg), are extremely popular because they can be made by just about anyone using standardised and non-specialised parts.
Small satellites can be launched as a secondary load on a large multi-ton telecommunication or broadcasting satellite. Rocket Lab's November launch has sent 30 satellites for a range of customers, including New Zealand's first student-built satellite, the APSS-1 satellite for Te Pūnaha Ātea - Auckland Space Institute at The University of Auckland.
Physics.org recently reported that of the 120 micro launch startups in late 2019, now only Rocket Lab and Kuaizhou-1 operate commercially small-scaled launch vehicles. Rocket Lab is likely to hold the pole position in the short-term.
Dawn Aerospace is developing reusable spacecraft that can launch on conventional runways, deploy payloads to space and return within a day, while avoiding the use of highly toxic fuels such as Hydrazine.
Dawn is helping to develop Christchurch as an aerospace "supernode", building on existing manufacturing and academic strengths, including the Canterbury University Engineering School's focus on rockets.
In the downstream space sector, New Zealand's unique geography makes it an ideal host for ground stations supporting international space programs and public and private satellite operators. The Awarua Satellite Ground Station hosts antennae to support rocket launches and satellite missions of many "big shots" like ESA, Planet and Spire. In October 2019, LeoLabs put in operation an innovative space surveillance Kiwi Space Radar in Central Otago designed to track dangerous small space debris.
Many companies provide and export services based on advanced analytics of earth observation (EO) and remote sensing data in areas such as land management, precision agriculture, atmospheric and oceanographic research, geosciences and hazard management.
For example, Alexandra's Xerra have developed a product called Starboard Maritime Intelligence to help analysts and decision-makers detect non-reporting or 'dark vessels' and gain insights into illegal fishing, identify potential COVID-19 transmission through vessel history analysis and identify biosecurity threats before vessels reach a nation's territorial waters.
On the research front, the Te Pūnaha Atea has reinforced its international position by hiring Professor Guglielmo Aglietti as its inaugural director.
Professor Aglietti is a leading researcher on space debris removal and recently won the prestigious Arthur C Clarke award for the in-orbit practical demonstration of new technology.
Proving once again that science fact is now converging with fiction, Victoria University of Wellington's Robinson Research Institute has started a five-year research and development program focused on ion thrusters, incorporating superconductor magnets on spacecraft. If successful, these ion thrusters could well propel humans to Mars and beyond.
Solving problems from afar
The distinction between space and aerospace is somewhat arbitrary, but both are about what's "up there", how it's used and how old problems "down here" can be solved.
Kea Aerospace is developing a solar-powered, unmanned aircraft that will fly continuously in the stratosphere for months at a time to collect frequent high-resolution aerial images.
Built by California-based Wisk Aero, Cora is an emissions-free electric flying taxi prototype that can travel up to 100 kilometers at 150km/h. The Government has signed an agreement with Wisk for Cora tests flights in Canterbury.
Regional Economic Development and Space
A popular phrase at the moment is "space democratisation"- because space is now open to everybody. It's a catchy phrase, but there is no denying the huge, ongoing, underpinning influence of Government(s) and in particular the US defence Industry.
New Zealand's trusted status with major defence partners such as the US, Australia and the UK will be very helpful - but we cannot take this for granted or approach it using a "number 8" mentality. This area remains a huge market and one that could be exploited further.
In industries such as aviation, New Zealand has found niches where it can dominate, even when that niche is a very small percentage of the total global market. Examples in aviation are Pacific Aerospace in special-purpose small aircraft and Aeronavics in industrial aerial robotics- both incidentally located in the Waikato.
We might reasonably expect a similar pattern in the space industry - with New Zealand finding its special "weird" niches where it can succeed, but it being less likely that it will become a global giant.
Rocket Lab has indeed found an unoccupied niche in rapidly manufactured small rockets and small high value-low cost launch payloads. Both entrepreneurs and local economic agencies will want to capture a slice of the action, creating jobs and opportunities for their local communities.
Launch facilities which need to be away from major populations, R&D and incubation services probably work best located near tertiary and technology institutions and manufacturing works well where there are established advanced and materials manufacturing skills/ capability and decent labour pools.
Some elements (for example observation and tourism) work best in areas where the skies are dark and quiet such as central Otago. Other aspects are less sensitive to location, so long as there are good digital data connections.
Projections are that the global launch industry will grow another 17 per cent to $US30b by 2026. Rocket Lab is now launching regularly and others may follow. In 2018 The Economist magazine suggested New Zealand might be one of the best launch sites in the world, citing our relative isolation and global position especially for near-earth sun-synchronous orbits.
What and Where Should we Focus?
Work by the New Zealand Space Agency has found that New Zealand has about 140 companies involved with the industry. SpaceBase makes available a database of organisations in New Zealand who have a role in the space industry.
The data shows that, setting aside outreach organisations (astronomical societies and small observatories), New Zealand's key areas of focus are in space education, science and research, manufacturing, and particularly in data, sensing and analytics. Policy, regulation and economic development support also make a strong showing, indicating the need for a robust strategic and policy foundation, but also the breadth of our government-based science and research ecosystem.
Where are our Strengths in Space?
Consistent with other technology and skill-based sectors, one might expect a geographical distribution of activities across New Zealand and that appears to be what we see. Head office, design, operations, distribution and manufacturing functions tend to be focused on our major centres, with Auckland and Christchurch dominating. This reflects the existing strengths and specialisations of these centres, their deep labour pools, university and technical/ science institutes and international connectivity.
Christchurch has a well-established manufacturing presence and is strong in the incubation and early-stage/start-up area. Its aeronautical and military links also serve it well.
Wellington's dominant role as the centre of government and the head offices of major science and research organisations also shines through strongly. All other regions have a space and aerospace presence to some extent, although Otago stands out due to its concentration of observation, tracking and sensing sites.
Auckland's strengths are more evenly spread across the value chain, with many space-related company headquarters. While its dense population excludes it from the noisy end of the business, that same characteristic means that its deep pools of skilled labour, education institutions and infrastructure will see it pay a key role - almost regardless of the exact shape the industry takes.
Auckland's economic development agency Auckland Unlimited, the Auckland Space Institute and others are starting to coalesce around how to maximise the super city's contribution to New Zealand's space endeavour, including maybe its own aerospace meetup group.
The other thing not to forget is New Zealand's location, amenity and livability advantage.
From New Zealand, the next stop south is Antarctica, the last remote wilderness on earth (so a good place to practice going to Mars), which is ideally placed for its growing range of ground station facilities. In other parallels to space, Antarctica is also a place where jurisdiction and development rights are contested and in need of constant vigilance.
And just like space- it is a trendy destination for tourists who have crossed everything else off their bucket lists- setting up real risks around pollution, trash and ecosystem disruption.
Our place in the Pacific is also a strength- given the geopolitical contest for influence in our wider neighbourhood. Australia is leading work around providing Pacific nations with 'earth observation' technology and data for a range of reasons – development, climate change adaptation and emergency response.
It's early days, but New Zealand's interests and opportunities inevitably cross over and needs to be considered.
With ultra-fast broadband, good international air connections (once the vaccines do their thing) and a time zone advantage, there is no reason why niche elements of the industry can't set up, even in remote parts of New Zealand.
The decision by Leolabs to set up in Naseby, or Xerra in Alexander point to the combination of amenity, climate, digital connectivity and geographic isolation as factors which play to our advantage in space.
Where to Next?
Trying to guess where this all could go too exactly would be unwise as Borroz has warned, but it's clear that New Zealand is now a genuine space player- at the small and niche end. Some initial conclusions include:
• The role of central and local government is firstly to provide regulatory and policy certainty, secondly to remove any barriers to the fair operation of the market and then thirdly to support players as appropriate
• Do we have the level of infrastructure, advanced manufacturing, skilled graduates (and kids interested in space), digital and data connectivity, storage and processing power needed to keep up?
• The space value chain is diverse and could offer opportunities, at varying scales, in almost every part of New Zealand. At a minimum, all parts of New Zealand can participate in space tourism when our borders open, for example dark skies.
• Canterbury's space sector is moving ahead with pace and Auckland has some untapped potential to further develop its space sector. It might focus on those parts of the value chain you would expect to see in a relatively large scale technical, R&D, professional services and manufacturing city.
• Every industry and every region in NZ should think hard about how they can benefit from the exciting opportunities being generated by our fast-growing space industry, and work with the NZ Space agency, their local EDAs and entrepreneurs to exploit opportunities.
Space is an industry where our size and isolation may just work in our favour- we need to keep playing it weird!
- Kevin Jenkins is a founder of www.martinjenkins.co.nz, and works at the intersection of business, innovation and regulation.
