According to Euroconsult's new report "Government Space Markets, World Prospects to 2017", governments have clearly entered a new phase of investment, committing to the development of a new generation of programs worldwide. Furthermore, government space program expenditures worldwide are expected to grow at 4.5% per year through 2012, reaching nearly $70 billion.

Established and emerging programs sustaining overall budget growth
The development of governments' space markets is driven by the growth of countries committing to space projects - about 40 countries in 2008, twice as much as a decade ago - as well as the expansion of governments' nominal investments into their space programs around the world.

For established government space programs security has become a key driver, pushing budgets higher and increasingly - encouraging dual use funding and/or Public Private Partnerships. This has also led to more complex implementation schemes in the US, Europe, Japan or Russia.

New leaders India and China have reached milestones in developing a new generation of systems targeting applications including space science and manned spaceflight, once reserved to the established government space programs. In the coming years they could contribute significantly to new capabilities in space exploration.

After a first wave of programs focused on low-cost projects (often Earth Observation), many emerging government space programs are now considering their next generation programs, often implying large investment to expand capabilities in applications such as SatCom. Countries such as Nigeria and Thailand were among the first to do so, and other countries such as Venezuela and Angola are following suit.

Impact of the economic downturn
"Government space programs are driven by long-term strategic national objectives which are typically less influenced by short-term economic downturns," remarked Steve Bochinger, Director, Institutional Affairs at Euroconsult.

"However, governments could restrain spending on non-priority space program budget items or may find it more difficult to attract private partners to co-fund Public-Private-Partnership (PPP) projects," he noted. "On the other hand, the economic slowdown may induce governments to increase their investments on infrastructure-related programs to support their economies, as the November Ministerial Council of the European Space Agency demonstrated" he concluded.

Prospects by program type and application
Civil space programs currently benefit from the majority of funding with nearly $33 billion spent by over 40 countries worldwide. In comparison, ten countries invest in defense-related programs for a value of $29 billion.

However, 95% of this spending is concentrated in the US. Global government spending on defense programs is likely to catch up to civil program spending in the next five years, with most countries' defense spending generally trending upward.

Satellite-related applications are clearly driving growth in government programs worldwide with a large number of countries committing to developing or acquiring satellite systems for their own use in specific programs.

Earth observation is the number one satellite-based application worldwide, with government spending $6.7 billion in 2008, i.e. 20% of government non-classified investment in space. Lower cost satellites and ability to address local issues has made EO the top priority application for a number of countries, particularly emerging space programs.

Strong growth is expected to continue in civil programs, while expenditures for defense and security programs are likely to stabilize at current budget levels.

Investments in satellite communications (Satcom) programs have been growing steadily reaching 6.6 billion spent in 2008 for both non-classified defense and civil programs. Overall, 128 satellites are planned for launch in the next decade driven by the defense sector as well as projects in developing countries.

Satellite navigation (satnav), $2.6 billion in 2008, has been the fastest growing application in terms of public-sector investment (+21% per year over the past five years).

In addition to GPS next-generation satellites developed in the United States, Europe, Russia, India, Japan, and China are investing in a new satellite navigation system that should boost the expenditures to $3 billion in 2010. 144 satellites should be launched for navigation applications between 2008 and 2017, i.e., over double that of the past decade.

Manned Spaceflight represents the largest space budget item worldwide with $11.6 billion invested in 2007, an 8% increase over 2006.

While this is largely due to the US program at NASA, Russia is also increasing its capabilities to service the Space Station and India and China are investing in this area. While all programs are currently under review, it is expected that the US will continue supporting NASA's development of the Constellation Systems.

Emerging space programs - both large and small - are bringing new energy to space science, which will drive growth in the number of scientific satellites launched over the next decade (105 satellites planned for launch over 2008-2017 compared to 84 the last decade). However, stagnation or decreases in budgets at major space agencies are not likely to be offset by growth from these newcomers.

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