European Space Force Capability Structure

Space Policy, Multi-domain Army Concepts, and Military-industrial Convergence Drive Autonomy and Capability-building Programs

Recent geopolitical events, such as the Annexation of Crimea; sustained proxy wars between Iran, Israel, and Saudi Arabia; the Russo-Ukrainian War; rising tensions across the Taiwan Strait; and confrontations on the global commons, drive the evolution of high-intensity networked and informalized warfare in the global defense market. State failures, the extirpation of democratic prerogatives, debt-trap diplomacy, refugee instrumentalizations, defense structure deregulations, and military technology institutionalizations expose the global power balance.

As technological and geopolitical confines of space continue to shift, European member states are under threat from industries and emerging spacefaring nations instituting politico-military adaptations and pursuing space as a commercial and military domain. The European space industry varies from international competitors due to constrained budgets, high reliance on commercial sales, dependence on foreign suppliers for critical technologies, and fragmented civil and defense sectors.

The European Space Agency hosts a $9.6 billion budget, smaller than the National Aeronautics and Space Administration's (NASA) and the United States Space Force's (USSF) allocations of $24.04 billion and $18.5 billion, respectively, for FY 2022. Subsequently, the European space industry's manufacturing, services, and employment are asymmetrically spread across six countries, contributing to 90% of European capabilities. It is also concentrated among eight organizations, catering to 65% of European demand. The European Space Agency budget allocated 85% of the R&D funds for developing global navigation satellite system (GNSS) services to five organizations. The GNSS services CAGR between 2016 and 2019 was 5.7%. In contrast, the CAGR in North America was 8.6%, while Asia's was 8.7%.

Investments in critical technology areas require a robust regulatory framework to stimulate financing mechanisms and investments. Fierce international competition from organizations financed by government programs with a first-customer approach and anchor tenancy and challenging economic conditions due to the COVID-19 pandemic strain small and medium-sized enterprises (SMEs) reliant on venture capital firms, and lenders due to manufacturing stoppages, supply chain disruptions, program delays, and launch postponements. In addition, space hardware faces protracted development cycles and time-to-market; capital-intensive laboratories, manufacturing, and testing facilities; and multi-year contracts. This increases the cost of innovation, technology obsolescence, and the associated risk calculus.

In this report, Frost & Sullivan covers position, navigation, and timing (PNT); remote sensing; space situational awareness (SSA); satellite communications (SATCOM); electronic warfare (EW) and signal intelligence (SIGINT); kinetic and non-kinetic physical weapons; manufacturing capability assessments; manned spaceflight and cislunar operations; and space launch capabilities. We focus on Russia, France, the United Kingdom, Germany, Italy, and Spain. To provide industry stakeholders a comprehensive insight, we also analyze growth drivers and restraints from 2022 to 2027 and the opportunities available.