ESA's 2024 Space Economy Report
ESA's latest report on the European Space Economy is out
European Space Agency - ESA latest report on the global and European Space Economy is out. If you don’t want to consume your Christmas holidays reading it, here’s my summary, highlights, and comments. All data refers to 2023.
This article focuses on a European view of the current space economy sector, so if you want a more detailed view of the U.S., you better read the full report. You can find it here: ESA Space Economy Report 2024.
I also excluded from this summary the part of the report that divided the downstream segments per sector and analyzed each of them, as it felt out of scope for a general summary.
Let’s get started.
If You Are Lazy
Which sector is shrinking? Private investments
Which sector is growing? Military
What is the largest space budget? U.S.
What is the European country investing the most in space per capita? Luxembourg
Which were the top five European space startups investment deals in 2023? Isar Aerospace, D-Orbit, Exotrail, Sylvera, Open Cosmos
What is China focusing on? Military and human exploration
Are launchers driven by the commercial sector? No
What is driving upstream growth? China
A quote?
One important factor of the European space industry is that its accessible market is commercially open to all space industries in the world. In addition, it does not benefit from the demand base provided by other large space powers, resulting in fewer opportunities for cost efficiency. These factors result in the European space industry being the most exposed to commercial market variations, with the urge to constantly remain competitive to maintain its level of industrial activity." (Page 17, regarding the launching segment in Europe)
Ups and Downs of 2023
Institutional Space Budget – Civil and Military
In 2023, institutional space budgets (civil and defense) reached a record €106 billion, an 11% increase compared to 2022. Defense spending was the main driver behind this growth, rising by 18%. Meanwhile, civil space budgets grew more modestly at 7%, driven by long-term investments in human spaceflight and space exploration by established space nations.
In Europe, the public space budget reached €11.9 billion, a slight 1% increase compared to 2022. Interestingly, defense budgets worldwide have overtaken civil budgets, exceeding 50% for the first time, except in Europe, where civil budgets still dominate at 85%.
Space Budgets Compared
The U.S. remains dominant, accounting for 64% of the global space budget. China and Russia, known for their opacity in disclosing actual spending, are analyzed using proxies like mass launched. By this measure, U.S., China, and Russia account for 33%, 32%, and 22% of the total mass launched for government programs, respectively, while Europe accounts for 8%.
The Decrease of Private Investments
Private investment in space declined in 2023, dropping 32% to €6 billion globally. Space companies received funding through 266 rounds, a 9% decrease from 2022.
Europe experienced a similar trend, with private ventures receiving just below €980 million—a 14% drop. Despite this decline, the U.S. still dominates private investments, attracting 60%, followed by Europe at 16% and China at 9%.
Some Surprises
Europe Is Less but More: While private investments in Europe fell 7% compared to 2022, the region is in its best investment cycle to date. The last two years (2022 and 2023) accounted for more than half of all investments since 2014.
The Rise of Public Funds: European institutions are increasingly supporting startups, blending public and private capital. In 2023, over 50% of funding in Europe came from mixed sources, such as Isar Aerospace’s €155 million Series C (involving Bayern Kapital) and Exotrail’s €58 million Series B (led by BPI France).
The Luxembourg Factor: Luxembourg remains Europe’s top investor in space relative to GDP, with a 0.135% share. Globally, it ranks third behind the U.S. (0.262%) and Russia (0.169%). In Europe, Luxembourg is followed by France, Italy, and Belgium.
Starlink and the Launchers Paradox
Despite a 32% drop in private investment, space activities continued growing in 2023, driven by public funds. Launches increased by 18%, with 221 conducted (212 successful).
Commercial vs. Institutional demands
More than half of the launches (116, or 53%) were for commercial customers. However, of these, 67 were self-provisioned—63 by SpaceX for Starlink and 4 by CASIC for China’s GuoWang constellation. Only 49 launches (23%) were purely commercial, serving third-party payloads. The remaining were driven by institutional demand, which, once removed Starlink from the equation, remains the main driver of the upstream market.
By Country
The U.S. conducted 114 launches, China followed with 67 launches, and Russia conducted 19. Europe’s contribution amounted to three launches (JUICE, Germany’s Heinrich Hertz satellite, and Vega VV23).
However, 96 out of 114 U.S. launchers were by SpaceX, including 63 for Starlink. Non-SpaceX U.S. launches amounted to 18, while SpaceX launches not associated with Starlink totaled 33. While these numbers still surpass Europe’s total of three launches, the gap becomes less striking when Starlink’s influence is excluded.
While Starlink boosts launch numbers, its vertically integrated structure limits its share of the upstream market—17% of launch value and 6% of manufacturing value in 2023. When excluding Starlink, China’s demand for defense and human spaceflight programs accounts for 99% of upstream growth over the past five years.
The European Launching Segment
European primes face unique challenges. Two-thirds of the global launch and manufacturing market are inaccessible due to institutional programs (e.g., U.S., China, Russia) and vertically integrated constellations (e.g., Starlink).
Europe’s market is commercially open but lacks the domestic demand base that drives efficiency for larger powers. This makes the European space industry especially vulnerable to commercial market fluctuations and forces it to stay highly competitive.