This chapter examines why space has become a strategic economic and policy domain, and how governments shape national competitiveness in the space economy. It highlights the continued importance of public investment, R&D support, procurement, regulation and institutional frameworks, while also considering the growing role of private finance, firm-level R&D and entrepreneurship-oriented policy instruments. Together, these factors determine how countries build, retain and deploy the capabilities needed to benefit from space systems and services.
The Space Economy at a Glance 2026
Abstract
Space is no longer a specialised domain at the margins of the economy. Space systems underpin essential functions in modern societies, including communications, navigation, weather forecasting, disaster management, financial transactions, transport, agriculture and defence. This makes space both an economic activity and a strategic capability: countries need reliable access to space-based infrastructure not only to support growth and innovation, but also to safeguard resilience, autonomy and security.
The global space economy generates around half a trillion US dollars in annual revenues, across a wide range of activities and market segments and is growing. Despite differences in scope, coverage and methodology, available estimates converge on the same broad picture. Published estimates vary from USD 544.3 billion in commercial space revenues, up 13% (Space Foundation, 2026[1]), to EUR 564 billion, up 7% (European Space Agency, 2026[2]), reflecting strong growth dynamics despite methodological differences across measurement approaches. The space economy is approaching the scale of the global semiconductor industry, valued at approximately at about USD 620 billion in 2024.
Governments remain central to the development of the space economy. Many space R&D activities are characterised by high upfront investment, long development cycles and technological uncertainty, associated with small and regulated markets. Furthermore, space activities support public services and often generate broad public benefits, such as scientific discoveries, environmental monitoring, national security, and disaster alerts. Finally, despite successive waves of liberalisation since the 1980s, several space capabilities and products are subject to heavy government regulation and export controls. Markets alone are therefore unlikely to provide the volume, continuity or strategic direction of investment required. Public procurement, mission funding and R&D support help sustain critical capabilities, reduce technological and market uncertainty, create early demand and crowd in private investment.
Public support also has an industrial and competitiveness rationale. Space programmes contribute to high-technology manufacturing, advanced engineering, digital services, R&D investment and skilled employment. Space applications generate linkages across key sectors, including transport, energy, agriculture, insurance, environmental services and defence. The policy challenge is therefore not simply to “grow the space sector”, but to ensure that national economies are able to develop, retain and deploy the capabilities needed to benefit from space-enabled infrastructure, services and innovation.
New statistical thematic accounting approaches are making the economic footprint of space more visible in national economies. This matters because space activities are distributed across aerospace, electronics, telecommunications, software, R&D, public administration, trade and services, and can therefore only be partially isolated from more aggregated categories in official industry statistics. OECD work, including the Handbook on Measuring the Space Economy, has helped provide a common conceptual basis for this measurement agenda. Over the years, countries have used this handbook as a baseline for measurement, with some developing dedicated industry surveys that generate detailed evidence on the economic scale and impact of space activities. More recently, thematic accounting initiatives based on higher-level national statistics have added a complementary perspective, marking an important step forward in space economy measurement.
The latest US Bureau of Economic Analysis (BEA) statistics provide an important benchmark: they show that the US space economy is deeply embedded across several strategic parts of the economy. In 2023, it generated USD 142.5 billion in GDP, equivalent to 0.5% of US GDP, USD 240.9 billion in gross output and 373 000 private-sector jobs. This makes it broadly comparable in economic scale to specialised components of the US economy, such as the air transportation industry or the motion picture and sound recording industry. Its policy importance therefore lies less in its aggregate GDP share than in its strategic role, high-technology content, links to public missions and embeddedness across manufacturing, R&D, telecommunications, government and digital services. The US space economy is also probably larger than current official estimates indicate. While commercial satellite TV, long the dominant segment of the sector, has declined in recent years, increased activity in space manufacturing may not be fully captured, as satellites and launchers produced by companies for their own use may be understated in national accounts, as these activities do not necessarily involve observable market transactions (Highfill and Rao, 2025[3]).
European evidence points in the same direction. Italy’s first thematic assessment estimates the space economy at around EUR 8 billion in output, EUR 2 billion in value added, 23 300 workers and about 0.1% of GDP in 2021.1 Italy’s space economy is a strategic high-value industrial and digital ecosystem, comparable to specialised niches in aerospace, electronics, telecommunications, software and advanced engineering. Upstream activities, mainly producing goods and services used in space, accounted for 67.3% of space value added, manufacturing for 50.9%, large firms for 78.2%, and multinational enterprises for 90.4%, underlining the sector’s industrial concentration and international integration.
The OECD is supporting further work to make space economy statistics more consistent across countries and more relevant for policy making, first at national level and eventually globally. Eurostat, the Joint Research Centre and the European Space Agency are building the basis for a European Space Economy Thematic Account. Spain is developing its Space Economy Thematic Account, with publication planned for the first half of 2027, France is developing baseline evidence with INSEE and CNES, while Canada, Korea and Germany are exploring as well new approaches based on their long-standing space industry surveys.
Beyond these measures of the space economy, emerging evidence shows how satellite-enabled services are diffusing across the broader economy. These indicators capture a different dimension of value: not the direct size of the space sector, but the extent to which firms and consumers rely on satellite data and signals as inputs into everyday economic activity. UK Space Agency industry survey estimates suggest that satellite services play a significant and growing enabling role in the UK economy, underpinning around 18% of UK non-financial GDP in 2022, compared with 16% in 2021 (London Economics, 2025[4]). The largest estimated contribution came from industries relying on positioning, navigation and timing services provided by navigation satellites, at 14% of GDP, followed by industries supported by meteorological satellite services at 11%, and by satellite communications and earth observation services, each supporting around 7% of GDP.
Official Danish statistics provide one of the few granular examples available to date, showing growing use of satellite-based services across enterprises and agriculture, with 18% of urban, non-financial private enterprises using satellite-based services in 2022, with uptake higher among larger firms and 74% of farmed area used RTK-GPS precision steering in 2025, while satellite imagery was used on 31% of farmed area, up from 12% in 2018 (Figure 1.1).
Sources: Statistics Denmark (2025[5]), “Enterprises use of satellites and Internet of Things (10 employees)”, www.statbank.dk and Statistics Denmark (2025[6]), “Precision agriculture 2025” and editions from previous years, https://www.dst.dk/da/Statistik/udgivelser/NytHtml?cid=52564.
These efforts, complementing more traditional space industry surveys and market reports, show why governments need both strong policy engagement and strong statistical foundations. Space is strategically important, but it can be challenging to capture its economic contribution to the economy using standard official statistics. Better measurement helps governments assess the returns from public budgets and R&D support, identify industrial strengths and dependencies, compare national capabilities, and design evidence-based policies that support competitiveness. Building on national initiatives, the OECD is working closely with countries on thematic-account approaches, with the longer-term objective of developing internationally comparable evidence and, eventually, global estimates of the space economy.
The rest of this chapter examines key policy levers through which governments shape space competitiveness. It first considers the scale and orientation of public space budgets, before looking at the role of R&D support, public procurement and mission funding in developing capabilities and creating demand. It then turns to the evolving contribution of private finance, and to the regulatory and institutional frameworks that influence market entry, innovation, investment and international positioning. Together, these instruments determine how countries translate strategic ambition and public investment into durable industrial, technological and economic advantages.
Governments invest in space to advance strategic, scientific and economic objectives. Public funding underpins national capabilities in space science, security, defence and civilian applications, and remains a major source of demand for space systems and services. Over the period 2010-25, government demand has evolved significantly, with public programmes supporting space transportation, satellite manufacturing, earth observation, communications, navigation, exploration and other applications.
The broader role of space in government strategic objectives appears to be evolving, as reflected in the EC-OECD STIP Compass policy database. Space science and exploration programmes have traditionally served as instruments of international co-operation and diplomacy, and these remain important priorities for many countries. Since the 2010s, however, commercialisation objectives have become more explicit, for example in the 2010 space strategies of Germany and the United States, and have since become mainstream. Over the past decade, defence, security and resilience considerations have also gained prominence. Since 2019, Australia, France, Italy, Portugal and the United Kingdom have published defence space strategies, while similar themes are addressed in several civilian space plans, including those of Denmark, Norway and Poland, as well as in multiple US space policy directives.
Public investment remains a major growth driver, with OECD civilian space budgets rising by nearly 15%, from USD 40.5 billion in 2022 to USD 46.4 billion in 2025, using an updated methodology (OECD, 2023[7]) (Figure 1.2). 2
Public support for commercial space activity has expanded, reflecting the growing role of private firms in space transportation, satellite manufacturing, earth observation, communications and other applications. This has contributed to shifts in policy instruments, including wider use of public procurement and service-based contracts, particularly in the United States and Europe; the transfer of technological know-how from public agencies to industry, as observed more recently in countries such as Korea and India; and improved access to public funding instruments, including in Europe and Japan.
Several major space-faring economies have increased or reoriented public investment over the past decade. In North America, the United States has continued to shape institutional demand through major civil and defence initiatives, including the Artemis lunar exploration programme and the consolidation of military space activities under the US Space Force. These developments have reinforced demand for commercial solutions in advanced launch, exploration, satellite communications, space situational awareness and national security capabilities. Canada’s space activities are gaining renewed momentum through a series of public investments aimed at strengthening national capabilities. Significant investments in next-generation earth observation systems (RADARSAT), European Space Agency programmes, satellite systems, lunar technologies, and emerging launch capability are helping retain and advance niche Canadian expertise in areas such as synthetic aperture radar and space robotics. Canada’s exploration profile was further strengthened in April 2026, when a Canadian astronaut became the first non-American to take part in a lunar flyby during the Artemis II mission.
As a percentage of gross domestic product
Note: 1. Includes contributions to Eumetsat, the European Space Agency and the European Union Space Programme (estimation); 2. Includes the dual-use US Global Positioning System; 3. Includes contribution to Eumetsat and selected European Union programmes (e.g. Copernicus and/or Galileo/EGNOS); 4. Includes contributions to Eumetsat.
Sources: OECD analysis based on government budget documents.
In Europe, space activity has grown markedly. ESA’s budget has risen substantially since 2010, supported by both member-state contributions and European Union-funded programmes. Several countries have reinforced national programmes and industrial capabilities, including in earth observation, launchers, secure communications and small satellites. At European Union level, large flagship programmes have become central to Europe’s space infrastructure: Copernicus for earth observation, Galileo and EGNOS for civilian positioning, navigation and timing, and GOVSATCOM and IRIS2 for governmental and dual-use secure connectivity.
Science, exploration and human spaceflight remain major institutional markets in the space economy. As core civilian objectives of government space programmes, they generate demand for launch, spacecraft manufacturing, robotics, mission operations, life-support systems, communications, navigation and scientific instrumentation. Although their benefits are often difficult to quantify, these missions support scientific discovery, technological learning, specialised industrial capabilities, and public outreach and engagement.
Exploration programmes are also changing how public demand is organised. Governments continue to define objectives, fund missions and manage strategic risks, but increasingly procure selected services from private firms, such as crew and cargo transport, lunar delivery services, human landing systems, private astronaut missions and planned commercial space stations. Institutional missions can therefore shape markets by creating early demand, validating technologies and supporting new capabilities, while preserving the public-good rationale for sustained public investment.
In Asia, public investment in space has also risen significantly. Japan strengthened institutional support through the Space Strategy Fund, established at JAXA in 2024 to provide multi-year support for private companies, universities and research institutes in satellites, exploration and space transportation. Korea expanded its ambitions through the creation of KASA in 2024, rising budgets, continued development of the Nuri launcher and plans for lunar exploration, building on the Danuri lunar orbiter. The People’s Republic of China [hereafter ‘China’] has continued to scale up space-based infrastructure in earth observation, navigation and communications, while intensifying activities in space science, lunar and planetary exploration, and human spaceflight. Space plays a growing role also in smaller Asian economies. For example, Thailand launched its THEOS-2 earth observation satellite in 2023, representing a historical investment of USD 237 million (2025 value). Thailand’s Geo-Information and Space Technology Development Agency, established in 2000, received a 2026 budget allocation of USD 36 million.
Note: EU27 budgets include national civil and dual-use programmes, contributions to Eumetsat, the European Space Agency and the European Space Programme.
Source: OECD calculations based on government budget sources.
At the same time, national space budget data reveal large variations in public space funding intensity. Between 2010 and 2025, some countries invested heavily, including Japan, Korea and Luxembourg, while others increased spending as part of COVID-19 recovery programmes. Several European countries also increased their contributions to optional ESA programmes. At the OECD level, civil public space budgets have remained broadly stable as a share of GDP between 2010 and 2025, while keeping pace with above-average inflation rates (Figure 1.3). This aggregate trend masks significant variation across countries and regions.
Beyond OECD countries, a widening group of countries is investing in space capabilities. Activity has expanded in Africa, supported by the inauguration of the African Space Agency in 2025 as a continental co-ordination mechanism, as well as in the Middle East and Asia-Pacific. These investments typically remain below the levels seen in the largest OECD space economies and show significant year-on-year variation, ranging from tens to hundreds of millions of dollars. This volatility reflects the fact that public space budgets are often shaped by large, one-off programmes, including commercial satellite procurement, launch activities and infrastructure development.
Measured as share of the total budget (panel A) and indexed growth in real terms (Panels B-D, 2015=100)
1. This does not include funding for the GPS programme, considered dual-use and therefore included in the civilian budget; 2. Data for France are based on individual counts of programmes until and including 2019.
Note: Analysis only based on publicly available data, not classified programmes.
Source: OECD calculations based on government budget sources.
A full assessment of public space investment needs to account for defence-related expenditure, but military space budgets remain challenging to compare internationally. Many programmes are classified, embedded in broader defence budget lines or reported as dual-use activities. Even with these limitations, available evidence points to a clear rise in defence space spending. In 2025, military programmes accounted for 14.8% of total government space budgets in Japan, 25% in France and 46.3% in the United States, where the US Space Force budget now exceeds NASA’s budget (Figure 1.4).
This shift is visible across a growing number of OECD countries. The United Kingdom has committed GBP 1.4 billion over ten years under its Defence Space Strategy, alongside other large programmes (e.g. Skynet military satellite communications upgrade). Germany has announced plans to invest EUR 35 billion in space-related defence capabilities by 2030, one of the largest recent European commitments. France’s 2024-30 military programming law provides EUR 6.4 billion for military space, with a later announced additional EUR 4.2 billion effort to 2030. Canada’s new Defense Industrial Strategy identifies key sovereign capabilities in the space domain, including space-based intelligence; surveillance and reconnaissance; space domain awareness; satellite communications; and space launch. Strategic investments in these areas have already begun, primarily in the launch sector, where the government announced a 10-year CAD 200 million agreement to lease a dedicated space launch pad as well as a CAD 105 million contest to launch Canadian payloads from Canadian soil. Japan’s defence-space spending has accelerated sharply, rising almost sevenfold since 2022 to reach JPY 540 billion in 2025.
Defence demand is also reshaping the types of capabilities being procured. Several European countries, including Portugal, Poland, the Netherlands, Finland, Sweden and Germany, have announced plans to acquire commercial synthetic-aperture radar (SAR) satellite constellations for sovereign intelligence, surveillance and reconnaissance needs, while Greece is pursuing a related sovereign SAR capability through its National Satellite Space Project. These developments point to a broader move toward resilient communications, space situational awareness, sovereign intelligence capabilities, rapid access to launch and greater use of commercial satellite services for defence missions.
China’s public space spending remains particularly difficult to estimate, as civilian, commercial and military activities are closely integrated under the country’s military-civil framework, and several major infrastructures are linked to the People’s Liberation Army. Rough estimates suggest that China is likely the world’s second-largest government space spender, but these figures remain indicative. Operational indicators, including launch cadence, mass-to-orbit, the deployment of more than 1 000 satellites over the past decade and sustained support for commercial space ventures, point to strong growth in public and strategic space investment.
Overall, defence-related space spending is becoming an increasingly important, but still only partially observable, component of public space investment. This calls for caution in international comparisons, while also underlining a clear strategic trend: Space, which in recent decades has often been treated primarily as a civil, scientific and commercial domain by many economies, is once again becoming central to defence, resilience and strategic autonomy.
Research and development are central drivers of competitiveness in the space economy. Space activities require specialised capabilities in areas such as propulsion, robotics, materials, communications, earth observation, data processing, systems engineering and mission design. Public R&D funding helps sustain long-term technology development, supports scientific discovery and de-risks capabilities that may not yet have a clear commercial market.
Since the 1980s, OECD has collected data on government R&D allocations by socio-economic objective (GBARD), including civil space R&D. This differs from general space budgets because it covers only government funding specifically allocated to civil space R&D, whereas general space budgets may also include defence space programmes, satellite operations, procurement, infrastructure, launch services, regulatory activities and other non-R&D spending.
In 2024, civil space accounted for 6.3% of total civil GBARD across the OECD area. France and Italy recorded the highest shares, at 14.1%, followed by Hungary (12%) and the United States (11%) (Figure 1.5). At the OECD level, this represents a slight decline from 2010, largely reflecting changes in the United States. In Europe, by contrast, civil space has increased as a share of civil GBARD in several countries. This growth has been driven in part by new memberships in the European Space Agency (ESA) and by post-COVID-19 recovery programmes, particularly in France, Italy, Spain and Portugal. From a measurement perspective, space R&D is also increasingly difficult to isolate as space-based applications become more widely embedded across sectors, including defence.
Note: 1. Data for Canada are from 2023.
Source: OECD (2026[8]), OECD Main Science and Technology Indicators (MSTI) database, database last updated 31 March 2026.
Civil space R&D remains significant, but its growth has slowed relative to other areas of public research spending. Based on OECD GBARD statistics, civil space R&D has declined as a share of total civil government R&D budget allocations since the early 2000s (Figure 1.6). Growth trends also point to a widening gap between civil space GBARD and broader civil and total GBARD, the latter including defence R&D (Figure 1.7). This suggests that, while public support for space R&D remains important, it has grown more slowly than other areas of government-funded research, particularly defence-related R&D which is picking up.
Selected NABS 2007 socio-economic objectives and their share in total GBARD
Source: OECD (2026[8]), OECD Main Science and Technology Indicators (MSTI) database, database last updated 31 March 2026.
Indexed growth of civil space GBARD, total civil GBARD and total GBARD (including defence), OECD area
Source: Calculations based on data from OECD Main Science and Technology Indicators (MSTI) database. OECD civil GBARD and civil space GBARD in constant USD PPP are estimations calculated from MSTI data.
The outlook for civil space R&D is uncertain in many countries. OECD governments face fiscal constraints, while R&D support is increasingly delivered through tax incentives rather than direct funding. At the same time, defence-related priorities are growing, and governments face competing demands to invest in health, energy and environmental research. Measurement challenges have also intensified as space technologies and applications become more deeply integrated across sectors, including defence activities. It would nevertheless be misleading to infer from public R&D budget data alone that the support for space innovation lacks momentum. Several developments point to a more diversified innovation landscape: greater private-sector engagement in financing space activities, increased self-funded R&D by some firms, the growing use of public procurement as a tool for innovation and market creation, stronger entrepreneurship-oriented policy instruments, and efforts by many countries to adapt legal and regulatory frameworks to the evolving space economy.
Civil space R&D should therefore be understood as one component of a broader innovation system. Public R&D remains essential for long-term missions, basic science, and frontier technologies. However, competitiveness increasingly depends on how public R&D connects with industrial ecosystems, procurement practices, private investment, start-ups, downstream users and regulatory frameworks.
In the 2010s, several OECD countries launched initiatives to widen the benefits of domestic space capabilities and knowhow to lower-income countries, such as the International Partnership Programme in the United Kingdom; and the Geodata for Agriculture and Water project in the Netherlands. The European Space Agency and the European Commission are also working with international partners to improve the uptake of earth observation data in development projects. Furthermore, multiple efforts are improving access to relevant data and training sets, such as the Africa Regional Data Cube and the global Open Data Cube (OECD, 2020[9]). In 2020, Norway launched the Satellite Data Programme as part of its International Climate and Forest Initiative, purchasing commercial high-resolution satellite imagery of tropical forest regions for universal access and use.
These efforts can be traced in official development assistance (ODA) statistics. Identified space-related ODA covers projects using or supporting space science, space infrastructure and satellite data and signals, as well as space-related administrative support and trainings. Between 2010 and 2023, the total committed amount reached USD 1.2 billion in constant 2023 dollars. EU institutions, France and Japan were the biggest donors over the period, financing projects notably in general environmental protection, disaster risk prevention, satellite-based media and information as well as in other sectors (Figure 1.8). Most geographically targeted assistance went to Africa and Asia, but a lot of the ODA was not tied to specific region. For example, the Norwegian satellite data programme covers tropical forest countries across the world.
Flows between the biggest donors and sectors and between sectors and recipient regions in the 2010-23 period
Source: Calculations based on OECD (2025[10])), “Creditor Reporting System (CRS)", OECD.stat (database), https://stats.oecd.org/Index.aspx?DataSetCode=CRS1 (accessed July 2025).
Private financing mechanisms in the space sector have diversified markedly over the past decade. They now include venture capital and private equity for early-stage firms, corporate and institutional investors, debt instruments and public markets, including initial public offerings (IPOs) and special purpose acquisition companies. Complementary arrangements – such as public-private partnerships, anchor-customer contracts and other risk-sharing schemes – also play a key role in mobilising private capital, particularly in capital-intensive segments of the space economy.
In 2025, private capital flows to the space sector reached an estimated USD 11-13 billion, depending on scope and definition, the highest level since 2021 (Figure 1.9). Investment was concentrated mainly in mature firms and in capital-intensive segments such as space manufacturing and launch activities. Private investment has also diversified geographically. In 2025, 67% of recipients were based in the United States, 15.6% in China and 12.8% in Europe. The investor base has also widened: in 2025, 39.6% of investors were located in the United States, 27.2% in Europe and 26.5% in Asia (Brycetech, 2026[11]).
Different industry estimates of space equity funding, acquisitions and debt finance
Notes: The data producers’ definitions differ for the space sector, eligible companies and types of investment. 1. the year 2021 is an outlier, marked by low interest rates and multiple special purpose acquisition company listings.
Sources: Adapted from Brycetech (2026[11]), “Start-up Space 2026”, ESPI (2026[12]), “Space venture 2025”; and Seraphim Space (2026[13]), “Seraphim space index: 2025: Q4”, and similar reports from previous years.
Access to private finance remains uneven. Space start-ups, particularly in manufacturing and launchers, often face long development cycles, high technological risk and uncertain revenue prospects, which may not align with typical venture capital investment horizons of around five years (OECD, 2024[14]). Public-backed venture financing for the space economy has expanded across several countries.
In 2018, Japan announced a JPY 100 billion, or around USD 940 million, funding pool to support space economy firms over five years, with backing from the Development Bank of Japan, the Industrial Innovation Organisation and other institutions. The same year, the French space agency CNES created CosmiCapital, a EUR 70 million fund dedicated to the space sector.
In 2020, Italy launched Primo Space, Europe’s first venture capital fund dedicated to the space economy, with EUR 85 million in committed capital and support from the European Investment Fund and CDP Venture Capital SGR. Luxembourg also supported the creation of Orbital Ventures, a EUR 70 million venture capital fund targeting space-related companies.
The European Commission followed in 2022 with the launch of CASSINI, which brings together around EUR 1 billion in support measures for space start-ups and SMEs through 2027. In 2023, Italy further expanded its support with Italia Space Ventures, a venture capital and co-investment fund managed by CDP Venture Capital and financed through the PNRR Complementary Fund. This initiative supported the development of the Galaxia technology transfer hub and the Take-Off accelerator programme.
Korea has also scaled up public-backed space investment. Since 2023, the Korea Aerospace Administration has operated the New Space Fund. As of March 2026, three funds totalling KRW 30.1 billion, or around USD 20 million, had been established, while a fourth fund was expanded in 2026 to KRW 200 billion, or around USD 135 million.
This relative improvement in access to funding is reflected at the firm level in some countries, with a growing shift towards internally financed R&D among space companies, supported by retained earnings as well as debt and equity financing. In Canada, for example, business firms in the space sector increasingly rely on such internal resources in addition to government funding. This trend appears to have contributed to a rise in overall R&D intensity measured as a share of gross value added (Figure 1.10). From 2017 to 2024, the internally financed share of Canada’s business expenditures on R&D (BERD) rose from 47% to 77% of total investment. Over the same period, the downstream sector’s share of BERD increased from 44% to 71%. Together, these trends point to an expanding commercial ecosystem increasingly oriented toward downstream space activities.
Source: CSA (2026[15]),´State of the Canadian space sector report 2025”, https://www.asc-csa.gc.ca/eng/publications/2025-state-canadian-space-sector.asp.
In addition, public listings have become an important but uneven channel of private financing for the space sector. Based on a conservative OECD sample of 40 listed space companies in the United States, Europe and Asia, primary proceeds raised over the past decade are estimated at no less than USD 100 billion. SpaceX should be treated separately: its 2026 IPO alone raised USD 85.7 billion, with much of its value connected to broader artificial intelligence developments.
The trend has broadened public-market exposure to space activities beyond traditional satellite operators. Earth observation and geospatial companies account for the largest number of listings in the sample, followed by launch, in-space infrastructure and lunar services, and satellite communications and connectivity. Investor demand appears strongest in segments linked to government, defence, intelligence, connectivity and infrastructure markets. Space exposure has long existed through diversified aerospace, defence and communications groups, where space is one activity among many. Newly listed space firms offer more direct exposure, but also higher concentration risk, weaker profitability in many cases, and greater sensitivity to technical milestones, launch cadence, public contracts and equity-market conditions.
Overall, public listings have expanded access to capital for a number of space companies, visibility and exit routes for investors, while increasing market discipline and volatility. The past decade therefore marks the emergence of a new financing regime rather than a simple wave of successful space IPOs. More space activities are now investable, but outcomes remain highly uneven, with recent cases such as Virgin Orbit’s bankruptcy and Astra’s Nasdaq exit highlighting the fragility of some listed space business models. This requires for investors a clear distinction between mature incumbents, credible growth firms and more speculative companies.
These developments do not reduce the importance of public investment. Rather, they change the way public and private roles interact. Government contracts, grants, co-funding arrangements and anchor-customer commitments can provide predictable revenue and signal technical credibility to investors. Private finance can in turn help scale technologies, accelerate commercial deployment and expand the range of market participants. The policy challenge is to ensure that public support crowds in high-quality private funding, while avoiding excessive dependence on short-term financial cycles or speculative investment.
Governments are increasingly using a broader mix of instruments to support private-sector innovation, entrepreneurship and commercialisation in the space economy. Traditional instruments such as R&D procurement and grants remain important, but policy approaches have shifted since 2010 towards more diverse support for technology transfer, public-sector data sharing, collaboration platforms, advisory services, incubators and access to equity finance.
Public procurement remains one of the main channels through which governments stimulate innovation and create demand. Across the OECD, government agencies are reshaping their relationships with the private sector to foster innovation and improve value for public money (Undseth, Jolly and Olivari, 2021[16]; OECD, 2023[7]). Traditional procurement models, based on government ownership, detailed specifications and cost-plus contracting, are increasingly being complemented by more flexible arrangements that emphasise service procurement, co-funding, firm fixed-price contracts and private-sector retention of intellectual property. These practices are intended to make public contracting more accessible to start-ups and privately financed firms, while using government demand to stimulate wider commercial activity.
The United States has been the pioneer of this shift (Figure 1.11). Since the mid-2000s, NASA has advanced commercial as-a-service models, beginning with the Commercial Orbital Transportation Services programme. This approach was later extended to cargo and crew transport to the International Space Station, commercial lunar payload delivery services and, since 2021, commercial low-earth orbit destinations. US agencies have also been encouraged to purchase commercial data to support public missions, and the FY2027 budget request foresees transitioning the civilian Landsat earth observation programme towards a commercial solution. Figure 1.11 shows the changes in NASA procurement practices from the mid-1990s to 2024. In 1996, firm fixed price and cost-plus award fees accounted for 10% and 72% of total procurement obligations, respectively. Firm fixed price instruments may work best for routine, low-risk projects. In 2024, firm fixed price was the most common procurement instrument, covering 31% of obligations, compared to 28% for cost plus award fees (NASA, 2025[17]). For 2009-18, average cost growth for projects with firm fixed price was 61%, compared to 46% for project with cost-plus (Sobel and Tibor, 2022[18]).
These models are influencing procurement approaches in Europe and Asia, although adoption has generally started later and from a lower base. ESA, the United Kingdom and Japan have procured debris removal services, while EUMETSAT has begun purchasing commercial meteorological data. The planned IRIS2 secure connectivity constellation will be delivered by a private consortium, although it is not a service buy in the strict sense, given the involvement of public actors in its development.
Contractual instruments have evolved in parallel. In the United States, Other Transaction agreements, including Space Act Agreements used under COTS, and Broad Agency Announcements provide greater flexibility than standard federal procurement rules. In Europe, ESA’s 2025 Contracting Regulations introduced co-operative agreements, creating a more flexible framework than traditional procurement and placing greater emphasis on co-funding and firm fixed-price arrangements.
These changes can also help mobilise third-party finance. Government contracts provide predictable revenue and can act as a signal of technical credibility to investors. Intellectual property provisions are particularly important. While traditional procurement often entails transferring IP ownership to the public party, US Space Act Agreements and ESA co-operative agreements allow inventors to retain ownership. Evidence from start-ups beyond the space sector suggests that firms with proprietary IP have higher turnover and stronger growth prospects, making IP rights an important signal for investors (EPO/EUIPO, 2023[19])..
At the same time, contractual arrangements need to be adapted to mission characteristics, risk profiles and market maturity. Firm fixed-price instruments may work best for routine or lower-risk projects, while more uncertain, complex or exploratory missions may require different risk-sharing arrangements (OECD, 2024[14]). The growing use of procurement as an innovation tool therefore does not imply a single preferred model. Rather, it points to a more differentiated set of procurement practices designed to match public objectives, technological risk and commercial maturity.
NASA procurement instruments as a percentage of total obligations
Source: NASA (2025[17]), FY 2024: Agency Financial Report, https://www.nasa.gov/wp-content/uploads/2023/11/nasa-fy-2024-afr.pdf and NASA (2023[20]), State of NASA Procurement Report: Fiscal Year 2022 in Review, https://www.nasa.gov/wp-content/uploads/2023/09/state-of-nasa-procurement-2022.pdf?emrc=65cb8e6c1f3fa and reports from previous years.
Beyond procurement, governments are broadening entrepreneurship-oriented support (Figure 1.12). The space economy thematic portal of the EC-OECD STIP Compass database identified 212 space-related policy initiatives and 289 policy instruments across 45 countries, the European Union and the European Space Agency in 2026 (EC-OECD, 2026[21]).3 These initiatives show that innovation is increasingly viewed through an entrepreneurial lens, with greater emphasis on knowledge transfer, business advisory services, collaboration platforms, public data access, incubators and equity finance.
Counts of policy instruments
Note: The space portal includes 212 policy initiatives. Most initiatives cover more than one policy instrument or target groups.
Source: Space economy thematic portal powered by EC-OECD (2026[21]), STIP Compass: International Database on Science, Technology and Innovation Policy (STIP), edition 06/2026, https://stip.oecd.org.
Several programmes illustrate this shift. Connect by CNES, launched in 2018, facilitates access to space data and signals for start-ups, companies and institutional users, while also offering technology extension and business advisory services. At European level, ESA Business Incubation Centres have become a major instrument for supporting early-stage firms, with around 36 centres operating in 23 countries by the end of 2025. Similar efforts can be observed in Japan, where the J-SPARC initiative, introduced in 2018, promotes collaborative projects between private companies and JAXA. In the United Kingdom, the UK Space Agency Accelerator programme has helped 289 founders raise more than GBP 100 million (USD 133 million) in the 2021-26 period (UKSA, 2026[22]).
Initiatives may target specific activities or objectives. Norwegian and Netherlands government agencies fund platforms to facilitate domestic users’ access to satellite data from the European Copernicus programme, in order to develop earth observation applications. In the Netherlands, the Satellite Data Portal now also includes higher-resolution optical and radar imagery as a supplement to Copernicus data. In Switzerland, the European Space Deep-Tech Innovation Centre, established in 2025, seeks to accelerate the commercial adoption of “deep-tech”, comprising technologies such as quantum, data and materials.
The diversification of policy instruments reflects a broader structural transformation in the space economy. As private firms take important roles in launch, satellite manufacturing, earth observation, communications and downstream services, governments increasingly need to combine direct funding with measures that support ecosystems, reduce barriers to entry, connect firms to public missions and enable the commercial use of space-based data and infrastructure.
Legal and regulatory frameworks are increasingly important for national space competitiveness. As more countries and private actors engage in space activities, governments need rules that enable market entry and innovation while managing risks related to safety, liability, security, sustainability and international obligations. The number of countries with space-related regulations has increased steadily, nearing 60 by 2025 (Figure 1.13).
Cumulative count of countries with space regulatory instruments
Source: Adapted from UNOOSA (2026[23]), “National space law”, webpage, https://www.unoosa.org/oosa/en/ourwork/spacelaw/nationalspacelaw/index.html.
Countries have accompanied their investments in space programmes by creating or updating legal frameworks. Examples include the 2017 Outer Space and High-Altitude Activities Act in New Zealand and the 2018 Space Industry Act in the United Kingdom, in order to regulate emerging domestic commercial space activities. National regulatory instruments are mainly associated with satellite registration and space activity licensing, but increasingly also address issues such as in-orbit insurance and liability, satellite imagery exports, orbital resource exploitation and debris mitigation.
However, keeping pace with accelerating technological development is a challenge. Regulators need to account for the risks of deploying new technologies while simultaneously enabling innovation. Earth observation imagery provides a useful example, where the availability of sophisticated commercial imagery has increased considerably over the past 5-10 years (see Chapter 2), yet only a few OECD countries have explicit data regulation in place in 2026, including Canada, France, Germany, Japan and the United States. These frameworks regulate the conditions for reporting and/or disseminating private sector data for national security purposes, typically addressing technical characteristics such as temporal, spatial and spectral resolution or frequency domains. To position their commercial sector to compete in the global market for earth observation data, the United States introduced a new tiered licensing approach for private earth observation systems in 2020, linking regulatory stringency to the existence and technological capabilities of foreign competition. The risk burden is transferred to the US government and focuses more on international comparisons than technological specifications. Overall, having these regulations in place is important, and ensuring their effectiveness requires ongoing review and periodic updates to requirements in order to reflect new technologies and changing market conditions.
Regulatory frameworks also play a role in managing externalities associated with growing space activity, including orbital debris, radio-frequency interference and the sustainability of orbital resources. While these issues are addressed in greater detail later in the report, they are increasingly part of the competitiveness agenda: firms and countries depend on safe, predictable and sustainable access to orbital environments, spectrum and launch opportunities.
Overall, the competitiveness of national space economies will increasingly depend on the ability of governments to combine sustained public investment with well-designed market-shaping policies. Public funding remains indispensable for maintaining strategic capabilities, supporting long-term R&D and addressing public-good objectives. Its impact will be amplified where it mobilises private capital, encourages firm-level innovation, opens opportunities for new entrants and provides clear regulatory conditions. Countries that can provide stable demand, effective innovation ecosystems and predictable rules will be better placed to capture the economic, scientific and strategic benefits of the expanding space economy.
Space competitiveness is increasingly shaped by the capacity of governments to combine strategic public investment with effective market-shaping policies. Public funding, R&D support and institutional demand remain indispensable for sustaining critical capabilities and addressing public-good objectives, but their impact increasingly depends on how well they mobilise private finance, support firm-level innovation and enable new entrants. As space-based services become more deeply embedded across economies, countries will also need stronger statistical evidence, predictable regulatory frameworks and policy instruments that connect public missions with commercial opportunities. Those able to provide stable demand, effective innovation ecosystems and proportionate rules will be better positioned to capture the economic, scientific and strategic benefits of the expanding space economy.
References
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← 1. These estimates do not include public sector activities, unlike the US thematic account.
← 2. The OECD Space Forum tracks non-confidential government civilian and dual-use space budgets, making it possible to analyse government space priorities over time and across countries. This indicator covers a broad range of activities, comprising for example R&D support, space system procurement and operations, provision of physical and data space-related infrastructure and data/signal utilisation. It also includes contributions to the European Organisation for the Exploitation of Meteorological Satellites, the European Space Agency and estimated contributions to the European Union Space Programme. To improve comparability, activities with purely military objectives have been excluded.
← 3. The EC-OECD STIP Compass collects data on national science, technology and innovation policies under the auspices of the OECD Committee for Scientific and Technological Policy and the European Union’s European Research Area and Innovation Committee. In June 2026, the database comprised more than 8 000 initiatives and 12 000 policy instruments from 63 countries. The space thematic portal counted 212 policy initiatives and 289 policy instruments from 45 countries, the European Union and the European Space Agency.