Government investments in space sector reach record $92 billion

09 February 2022 Consultancy.uk 2 min. read
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Governments worldwide invested an estimated $92 billion in the space sector throughout 2021. According to new research, geopolitical tensions and conflicts over resources are pushing Earth’s superpowers into the scramble for the stars.

While the world has struggled to get a grip of the pandemic over the last two years, governments and businesses alike have still found ample room in their budget to splurge on intergalactic investment. Researchers from Euroconsult have discovered that while 2020 saw the space sector receive $84.5 billion from state-actors in particular, this amount increased by about 8% in the last 12 months.

The question is why? What could be so important that governments would neglect spending on public health priorities throughout a lethal pandemic, but still be willing to burn through money for the sake of space programmes?

World Government Expenditures for Space Programs

Partially explaining why, Euroconsult noted, “Geopolitical tensions, growing rivalry between leading space powers and the value of space as a strategic area are fuelling an increasing militarisation of the cosmos, with major countries systematically increasing their investment in military space programs.”

So, far from being motivated by a thirst for new knowledge about the universe, investments in the sector are becoming heavily motivated by geopolitical paranoia. As a result, governments worldwide invested more than $39 billion in activities last year in order to claim extra-terrestrial areas, such as parts of the moon, in the future. That amount has grown every year in recent decades, the Euroconsult researchers report.

International conflict

The moon is currently the subject of an international treaty, ratified by sixteen countries around the world. The Moon Treaty states, among other things, that it is forbidden as a state to claim a celestial body, and prohibits the establishment of military bases on them. However, the largest global player to have ratified it is founding signatory France – while the likes of the US, China and Russia have not paid it much attention. Now, they may well be weighing up expansion beyond the Earth’s atmosphere.

In particular, the US is sinking huge amounts of money into the new space race. In 2021, the US spent a staggering $54.6 billion on space, many times more than the Chinese government’s $10.3 billion investment, or the $4.2 billion of Japan, and France’s $4 billion. Meanwhile, the UK spent $1.4 billion.

The European Union meanwhile invested a collective $2.6 billion in the space sector in 2021 – just 4.7% of the US budget. In addition, though, EU Member States also spent money separately. The Netherlands for example poured $167 million out of its own pocket in the space sector.

Not all of this is military spending, though. Some $53 billion of the total spend went to developing so-called civil space in 2021. With satellite technology offering a hugely lucrative market in the future, the consultancy suggested that the already astronomical expenditure on space may rise further. According to Euroconsult – a specialist in the field of space travel and satellites – the total global budget of governments will break the $1 trillion barrier in the next decade.