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Insights into Editorial: Space tech start-ups need more government nurturing, resources

Space_industry_evolution

Context:

In recent, Finance Minister announced a ground-breaking initiative by opening up space and atomic energy to private players, referring to them as “fellow travellers”.

And, on May 30, history was created by SpaceX when NASA astronauts were launched into orbit by the first-ever commercially-built rocket and spacecraft.

NewSpace” is a rapidly growing market that will be worth hundreds of billions of dollars in the next decade.

India needs urgent and radical reforms in its space sector:

Today, the space industry is undergoing a paradigm shift, moving from Space 3.0 to Space 4.0, driven by changes in motivations, actors, roles, and technologies.

While Space 3.0 has been characterized by large government investments and public-public collaborations, Space 4.0 is a more democratized and accessible field with more public-private and private-private collaborations.

It entails the emergence of a plethora of small to medium-sized private companies.

  1. Through the second half of the 20th century, outer space was the sole preserve of national space programmes driven by government-funding, direction and management.
  2. As military uses of space and prestige projects like Moon-landing emerged, major private sector entities already in the aviation industry like Boeing and Lockheed won space contracts in the US.
  3. The last decades of the 20th century saw significant expansion of satellite-based telecommunication, navigation, broadcasting and mapping, and lent a significant commercial dimension to the space sector.
  4. As the digital revolution in the 21st century transformed the world economy, the commercial space sector has begun to grow in leaps and bounds.
  5. The global space business is now estimated to be around $ 400 billion and is expected easily rise to at least trillion dollars by 2040.
  6. One example of the rise of private sector companies in the space sector is SpaceX run by the US entrepreneur Elon Musk. Hired for a resupply mission for the space station, it now launches more rockets every year than NASA. The entry of private sector has begun to drive down the cost-per-launch through innovations such as reusable rockets.
  7. India, however, is quite some distance away from adapting to the unfolding changes in the global space business.
  8. In its early years, India’s space programme that was constrained by lack of resources found innovative ways of getting ahead in space.
  9. Although the ISRO encourages private sector participation in the national space programme, its model is still very 20th century — in terms of governmental domination.

Can India take advantage by opening up to private players?

  1. The welcome reforms announced by the FM include the levelling of the playing field for private companies in satellites, launches and space-based services by introducing a predictable policy and regulatory environment to private players and providing access to geospatial data and facilities of the Indian Space Research Organisation (ISRO).
  2. Many doors of opportunity are opening in this sector. Reportedly, more than 17,000 small satellites will be launched in Low Earth Orbit by 2030. Exciting Indian space-tech startups are emerging in this area.
    1. For instance, Prixxels, founded by two BITS Pilani graduates, is building a constellation of nano-satellites to provide global, real-time and affordable satellite imagery services.
    2. Bengaluru-based startup, Bellatrix Aerospace offers novel “electric propulsion” systems, which have applications in the field of nano and micro-satellite propulsion.
    3. And Mumbai-based startup Manastu Space has developed a “green propulsion” system using hydrogen peroxide as fuel.

So, what can Indian government do to help such young “co-travellers”?

  1. First, the crucial issue of funding. We must trust and support early-stage innovations through “adventure” capital, not just risk-averse venture capital. We also need “patient” capital, as the lead times are long in this sector.
  2. The government can be the provider of such adventure and patient capital. It did so in 2000, when we at CSIR launched the New Millennium Indian Technology Leadership Initiative.
  3. CSIR gave very low-interest soft loans to early-stage startups, who explored radical ideas. After proof of concept, other financial instruments, including venture capital, became available.
  4. So, the public-private partnership that the FM is referring to should be in financing too, not just in development.
  5. Second, startups need a head start in the market and the current public procurement system is heavily loaded against them.
  6. The lowest-cost-selection approach must change to lower total cost of ownership.
  7. Path Ahead: Transformative Ideas for India, edited by Amitabh Kant, carries my chapter on creating an innovative public procurement policy for startups. Perhaps, it is worth revisiting.
  8. Third, we need to create a robust space tech-startup national innovation ecosystem comprising incubators, accelerators, scalerators and mentors.
  9. ISRO has a pivotal role in anchoring this initiative. Just as important will be the synergy with the government’s flagship programmes such as Digital India, Startup India, Make in India, Smart Cities Mission, etc.
  10. Fourth, we urgently need a law that allows private players to participate across the space value chain, not just bits of it, as is the case today.
  11. The draft Space Activities Bill, introduced in 2017, has lapsed. This is an opportunity to rewrite it with a bold perspective.
  12. Fifth, the nation needs a new mantra. Referring to the principal idea from my recent book on the subject, we must move our aspirations from leapfrogging to pole vaulting. Can India pole vault to a 10 per cent share of the global space economy within a decade?

Conclusion:

As it looks at the growing role of the private sector and the effort by nations like the UAE and Luxembourg, India needs to move quickly towards a new model for India’s space activity.

It needs a regulatory environment that encourages a more dynamic role for the private sector and promotes innovation. It will be a pity if India squanders the many advantages of its early start in space by delaying the much-needed reform and reorganisation of its space sector.

Prime Minister Narendra Modi has given us an inspiring agenda of Atmanirbhar Bharat Abhiyan.

To achieve this, we need “aatmavishwas” — self-belief, and trust. If we build this atmavishwas with bold policies coupled with determined actions, then we can certainly pole vault to a great new future, and sooner rather than later.