Challenges for Innovators in Space
By Stuart Martin, CEO, Satellite Applications Catapult
“Innovation is a contact sport” – AnnaLee Saxenian, UC Berkeley
All innovators face challenges, whatever sector they operate in. That is the nature of innovation. However, there are some specific challenges that are unique to satellite applications, which are particularly inhibiting to new entrepreneurs coming to our sector. Some of them are physical or financial in nature arising from the unique characteristics of space itself. Others, perhaps surprisingly, are cultural, and are significant in some societies more than others. However, what is true for all innovation challenges is that addressing them quickly and effectively will open up previously unrealised opportunities, conferring ‘fast-mover advantage’ – a vital competitive edge in a global market – and thereby substantially reducing risk and enhancing prospects for growth.
A Supply Chain in Space
An obvious implication as a provider of satellite applications is that part of your supply chain is in space – one of the most hostile and inaccessible environments known to man. This raises a number of questions that investors and customers will want to understand. How resilient is your supply chain? How reliable can your service be? What are the threats? How will you manage supply chain evolution? Being able to answer to these questions will affect your ability to secure funding for your business, or achieve take up in the market.
There are many assets in space which are can already be exploited, for which these questions can be answered, but even these can be difficult. However, if you are in the business of developing components required to operate in space (the so-called ‘upstream’ sector), then you are confronted with another set of unique challenges, i.e. the costs of physically getting your product into space, and of navigating the complex national and international regulatory environment before you can even try and do that. Without specialist help and support, these fundamental barriers can prevent any business from getting off the ground.
“If I’d asked my customers what they wanted, they’d have asked for a faster horse!” – Henry Ford
Disrupting Established Markets
Some innovations are incremental evolutions to existing markets, whilst others are much more disruptive requiring fundamental rethinking of markets and supply chains. The quote from Henry Ford above highlights the challenge to all disruptive innovators – how do you create demand for a product, when even your customers don’t know that they want it? How do you break down long-standing, comfortable working practises with strong, well-established supply chains, supportive regulatory frameworks and ‘happy’ customers?
The fact is, very many satellite applications fit into this category. A satellite-based service can often be shown to offer clear advantages over existing technology, but inertia in the market can impede transformation, which then blocks the opportunity. This inertia can have many origins – it can, for example, arise from the strength of supply chain relationships, inflexible regulation, or ‘lazy’ customer behaviours. The trick is to find the route to market which doesn’t suffer from this inertia, and the broader demand will follow when other customers start to realise what they are missing.
A good current example is the area of satellite broadband, where there is a parallel with the roll out of mobile communications in the 80s and 90s. Demand in the west is weak, where there is broad satisfaction with, and a strong regulatory bias towards the (albeit limited) terrestrial solutions. However, there is real hunger in the developing world, where the satellite solution delivers a lot of new capability very quickly – just as there was for mobile communications in Eastern Europe when the iron curtain fell, which enabled western wireless companies to develop quickly, even though domestic demand was still relatively weak.
“Innovation has nothing to do with how many R&D dollars you have. When Apple came up with the Mac, IBM was spending at least 100 times more on R&D. It’s not about money. It’s about the people you have, how you’re led, and how much you get it.” – Steve Jobs
The Apollo Legacy
Many children of the 60s and 70s who studied engineering and sciences will admit to having been inspired by the Apollo programme and the early space pioneers. The so-called ‘Apollo effect’ is well known, and ‘space and dinosaurs’, are often still quoted by teachers as the only subject areas that will ensure strong student engagement.
The Apollo programme finished over 40 years ago, but public perception of space is still very strongly influenced by it, modified slightly by the big international collaborations that have followed (the space shuttle, international space station, etc.), which tend to have had the highest public profile. During this time, we in the UK have become comfortable with the notion that we don’t substantially participate, the justification being that this is about national prestige, where the public benefit does not justify the enormous cost. Our modest means are best deployed elsewhere and, of course, we can still be inspired through the efforts of other nations.
But as a consequence, we now have very little awareness in our public consciousness of the fantastic progress that has been made in the commercialisation of space, particularly here in the UK, over the same period. We now have a generation of decision makers and influencers in all facets of society, including government, industry, the finance sector and, crucially, the media who have a very incomplete and indeed negative perception about the role of space in the economy. Yes, everybody knows that satellite TV and satellite navigation are something to do with space (the clue is in the name), but in general, space is understood to be a discretionary and unnecessary cost, rather than an increasingly essential asset.
This national view comes through most strongly, when we hear media reports of another ‘developing nation’ establishing a space programme. Rather than celebrating the development opportunity this represents, the story is usually about whether we should continue to provide development aid to this country when they clearly can’t be trusted to spend their own money sensibly. Misconceptions like this create cultural barriers to innovation, which are every bit as challenging as the physical and financial barriers we all understand, and we need to put every bit as much effort into overcoming them.
This is a far from complete analysis of the types of difficulties that innovators in space face, but it does give a flavour of the types of unique challenges that need to be overcome. The opportunity is enormous, so it’s well worth the effort!