More than ever, our society relies on innovative solutions to respond to and mitigate natural and man-made disasters, curb the spread of deadly diseases and strengthen a global supply chain that underpins our daily lives, with global challenges such as the digital revolution, climate change and a pandemic threatening the economy at a worldwide scale. EO and GNSS will play a vital role in contributing to these innovative solutions through dozens of applications that are emerging or already in use by citizens, governments, international organisations, NGOs, industry, academia and researchers around the world.
The EU Space Programme, with its flagship programmes on Satellite Navigation (Galileo and EGNOS) and Earth Observation (Copernicus) has become a major enabler in the downstream space application market. Our economies and lives increasingly rely on space-based services; this is reflected in the increasing diversity of the downstream EU Space industry and service provision, and the market and revenues generated by EU Space investments.
The global GNSS downstream market has seen considerable growth and will continue to grow rapidly. According to EUSPA’s EO and GNSS market report, the overall installed base of GNSS devices will grow from 6.5 billion units in 2021 to 10.6 billion units in 2031. Further, the global GNSS downstream market revenues from both devices and services is forecasted to grow from €199 billion in 2021 to €492 billion in 2031. Global annual GNSS receiver shipments reached 1.8 billion units in 2021 and will grow consistently across the next decade, with an estimated 2.5 billion units in 2031.
From a regional point of view, the Asia-Pacific region has established itself as the largest market, seeing as, in terms of demand, the region continues to dominate the GNSS revenues market1 both for device and services revenues (36% and 40% of the global share respectively in 2021).
The market for Earth Observation data and services is growing steadily, set to double from roughly €2.8 billion to over €5.5 billion over the next decade, driven strongly by value-added services which comprise 80% of 2021 EO revenues. The EO data market is expected to grow with a CAGR of 3.5%, resulting in €797 million in total revenues by 2031, whilst for EO value-added services, the market is projected to grow at a CAGR of 6.8%, resulting in €4.7 billion by 2031. Copernicus free and open data and information are used to grow business and simultaneously tackle societal, environmental and economic challenges, supporting a wide range of market sectors.
The development of Galileo, Copernicus and EGNOS affects industries far beyond what we normally tend to think of as ‘space based’. The downstream industry for GNSS includes component manufacturers that produce everything from receivers, chipsets, antennas and safety beacons. It includes system integrators that integrate GNSS capability into larger products, such as vehicles and consumer electronics. It also includes value-added service providers that improve access to and use of GNSS, including map providers and augmentation service providers. European companies accounted for 25% of the global GNSS Components and Receiver manufacturer market2 in 2019 (compared to 27% in 2017). More specifically, Europe accounted for 24% in the System Integrators and 25% in Added-Value Service Providers in 2019.
The market for EO data and services continues to grow, driven by EU and global policy developments on climate (e.g. EU Green Deal, Paris Agreement) as well as technological advancements in areas such as cloud computing, machine learning and big data analytics. Over half of global revenue for value-added services was generated by the top 5 segments, led by Urban Development and Cultural Heritage and Agriculture. The Insurance and Finance segment is expected to experience the fastest growth over the next decade, linked to rising use of parametric insurance products in the context of disaster resilience frameworks.
Revenue generated from EO data and value-added services (i.e. the revenues from the supply point o view) is concentrated in the United States and Europe. Together US and European companies hold over 83% of the global market, each accountable for over 40%.
The secure Satellite Communications market continues to grow rapidly and, according to the latest PWC report, the current civilian demand of satellite communication capacity in Europe is around 2.5 Gbps and the military demand does not exceed 1.5 Gbps. In 2035, the forecast could reach almost 4 Gbps for military demand and 20 Gbps of civilian demand, increasing up to 6 Gbps for military and almost 30 Gbps in 2040, while global GNSS downstream market revenues from devices and services were set to reach EUR 150 billion.
Innovation also plays a key role in driving economic growth and sustainability in the European Union. In this context, the European space program offers huge potential for the EU, as an engine of innovative growth in a number of different sectors including LBS, transport, surveying, agriculture, and timing and synchronisation. Based on the Copernicus services and on the data collected through the Sentinels, many value-added services can be tailored to specific public or commercial needs, resulting in new business opportunities.