Commercialization of space offers opportunities for GCC
The International Space Station has, for many years, been a great symbol of the global village the world has become. An example of countries from across the world working together for greater attainments. It has inspired many movies, in which we see astronauts, scientists, soldiers and researchers of different nationalities come together to defeat threats to humanity’s future. All this is now coming to an end, as the ISS is to be decommissioned in 2031. Symbolically, the space station is reaching the end of its life just as the world looks less like a global village and is becoming more fragmented.
The relative stability and peace that allowed for global partnerships have been lost. The trend is toward bilateral collaboration and partnerships. NASA expects to spend $1 billion on a space tug to de-orbit the space station. And so, a new type of collaboration is being put forward. As we already see with the first Saudi astronauts, private US companies such as SpaceX and Axiom Space are playing a key role in this new phase. This will continue with the development of private space companies in the US and Europe.
There is no doubt that there is a need for space stations, just as much as satellites and other spacecraft. The fact that much space activity will no longer be directly led by a national space agency such as NASA but by private companies means that countries looking for access to space will need to diversify their partnerships with these companies as well. This applies to research in space as well as developing telecommunications constellations or intelligence satellites. The emergence of space startups looking to create innovative solutions to these problems is hence a positive outcome of this change.
There is a real opportunity for the Gulf Cooperation Council states to benefit from this transformation. In a sense, global collaboration between private sector and public sector has become more efficient. Private companies are focused on achieving commercial viability and so will always find ways to better manage resources, as well as create new revenue streams. Space companies will, like many deep tech companies, need to find a path to profitability and the GCC markets can be a part of this.
Space companies will, like many deep tech companies, need to find a path to profitability and the GCC markets can be a part of this
Khaled Abou Zahr
But space and deep tech will still follow political friendships. Indeed, the sensitivity of the space domain means that you can only work with friends. And you need to make sure your friends do not share your knowledge with your competition or enemy. This means that there is a need to broaden partnerships and projects between allies. This was clear during Saudi Space Commission CEO Mohammed bin Saud Al-Tamimi’s visit to India’s space agency and research centers this month. This was all the more important as India has been successful with its Polar Satellite Launch Vehicle, which accessed orbit multiple times in 2022, making it a leading country, although still far behind SpaceX.
SpaceX has become the cornerstone of access to space. It has taken over a large part of the market, which has allowed the company to increase its prices to access orbit. Europe has faced difficulties with its launching capabilities. Nevertheless, it is determined to solve this and guarantee access. The model in the US that promotes private companies should be emulated in the GCC. It is the key to developing a real space economy and unleashing the innovation cycle.
If space is to become a domain where commercially viable companies flourish, there is a need for greater access and mobility. Greater access in terms of both frequency and capacity. This will enable economies of scale and unlock reasonable pricing. This is where governments can offer support by making sure this infrastructure — just like on Earth — is set up, allowing new business models and applications to be built on top of it. In order for this to be achieved, collaboration between government agencies and private companies is a necessity. Once again, it will only work between allies and friends.
The current geopolitical changes on Earth indicate that collaboration between the US and Europe on one side and China and Russia on the other will become increasingly prohibited. The tensions between Russia and the rest of the stakeholders in the ISS have outlined this change. Even if SpaceX transports Russian astronauts today, after Russia transported US astronauts for many years, this type of collaboration (even if paid for) will soon come to an end as each nation looks to achieve a competitive edge. There is no doubt that, when it comes to the space domain, a choice will have to be made: a political one.
In my opinion, the GCC has a greater interest in aligning with the US and Europe rather than with China. The model that has been developed there presents a much more fertile ground for the emergence of a business ecosystem. GCC space entrepreneurs would be able to create and develop with other entrepreneurs. Once again, in space, just as in defense, key hardware and software may not be accessible due to sensitivity. Yet, the stronger the alliance and commitment, the greater the collaboration.
Despite its links to intelligence and defense, I believe that the true opportunity in space lies in its commoditization and commercialization: the development of new business models and applications. This means that private companies and investors need to work alongside governments, always making sure not to invest where governments do. The GCC has been successful in these innovative partnerships and hence has the capacity to benefit from this new paradigm.
- Khaled Abou Zahr is the founder of Barbicane, a space-focused investment syndication platform. He is the CEO of EurabiaMedia and editor of Al-Watan Al-Arabi.