The market for satellite-based navigation is growing steadily. This growth will accelerate over the next decade due to the introduction of new navigation systems, in particular Europe’s Galileo. In order to monitor the development of the market for Global Navigation Satellite Systems (GNSS) and to provide information in support of entrepreneurship, the European GNSS Supervisory Authority (GSA) has implemented a market monitoring and forecasting process.
In 2009, the GSA developed and implemented a GNSS market monitoring and forecasting process focussing on four key market segments: Road, Location Based Services (LBS), Aviation and Agriculture. This process was developed with the support of VVA and LECG, two consulting companies expert in market analysis and forecasting. The first top-line results are reported below. More insights will be published in early 2010 and subsequently reported on a regular basis.
In particular, the GSA has created:
- A GNSS and Galileo Market Model based on solid underlying data, econometric techniques and key assumptions validated by focus groups of experts. This model allows the GSA to estimate the size of the market and simulate different scenarios for the above-mentioned segments.
- A GNSS and Galileo Public Benefits Model (linked to the former) based on socioeconomic analysis and key assumptions and validated by experts. The model allows the GSA to assess the benefits Galileo will provide to the public sector and to EU citizens by market segment.
Market monitoring and forecasting methodology
The Market Monitoring Model takes as input the data from GSA market studies and reliable industry sources. Moreover, the model is based on a tailor-made selection of econometric techniques. An extensive set of variables are defined by key assumptions on the adoption of GNSS and Galileo. This process allows the simulation of different market scenarios.
These assumptions are the result of an iterative process developed by renowned experts in key areas of each market segment. Additionally, a consistency check was performed for each segment by comparing the model’s results with the most recent reports from independent GNSS market research companies. More information on the assumptions used and the different scenarios simulated will be provided in the first issue of the GSA’s GNSS Market Report, which will be published in the first quarter of 2010.
Galileo to increase the value of the GNSS market
The global market for satellite-based navigation products and services will continue its strong growth, reaching about €250 billion by 2030.
The GSA estimates that Galileo will increase the overall value of the market by about €14 billion over the period 2010-2027 in the four assessed segments.
Almost 60% of the estimated Galileo market-building effect is in the road segment. LBS is the second largest segment, accounting for more than one-third of total revenues.
Within the road segment, the most widespread application is still expected to be car navigation. Other innovative uses of satellite navigation – such as Road User Charging (RUC), Advanced DriverAssistance Systems (ADAS), Pay Per Use Insurance (PPUI) and the monitoring of livestock and dangerous goods transport – are up-and-coming today and will continue to expand in the coming years. These applications will emerge mainly due to Galileo, which will provide unprecedented accuracy, along with integrity information and an authentication function.
The public benefits to the 27 EU Member States from satellite-based navigation are estimated to be over €800 billion during the period 2010-2027. This value does not include some of the major potential benefits, such as employment growth and saved lives, which were estimated on a non-monetary basis.
Meanwhile, the public benefits derived from Galileo are forecast at €58 billion in the 2010-2027 period. The benefits include reduced travel time and fuel consumption, and public expenditures savings due to a reduction in road accidents and injuries, for example.
These public benefits are expected to grow rapidly. The road segment has the potential to reap the largest public benefits from Galileo, accounting for more than 70% of the estimated total. The benefits derive mainly from a reduction in travel time (a result of better navigation), the availability of more devices, better congestion management and the development of intelligent services.
The development of LBS, such as GNSS-assisted medical monitoring and other emergency services, will lead to significant benefits due to the reduction of injuries. In agriculture, the use of more accurate positioning technologies enabled by Galileo will allow rationalisation and increased efficiency in the use of fertilisers and pesticides. In aviation, the integrity information provided by Galileo and EGNOS will increase flight safety and reduce fuel consumption.
The satellite-based navigation market is in constant evolution. In order to improve the accuracy of the analyses and forecasts, the GSA’s market monitoring and forecasting process requires a continuous interaction with market players and stakeholders. It also requires the integration of the latest market research data. Over time, the process will cover additional market segments.
The GSA invites all industrial and institutional experts to contribute to the quality of this process and its results. The market forecasts will be published regularly for the benefit of the industry.
About GSA Market Development
The GSA’s Market Development department promotes downstream GNSS market growth through the use of the EU’s EGNOS and Galileo navigation systems, with the aim of contributing to the maximisation of public benefits in the EU. The department continuously monitors GNSS market segments and shares key information with the stakeholders of the Galileo and EGNOS programmes.
A knowledge base has been compiled and is updated through extensive market analysis and research. This is enriched by a large and consistent portfolio of R&D projects under the EU’s 7th Framework
Programme (FP7). In the context of the European Commission’s Applications Action Plan, the Market Development department implements an EGNOS market entry plan, with marketing activities fostering penetration in key market segments, such as agriculture, aviation and road.
About the authors
Boris Kennes is responsible for the coordination of the FP7 projects portfolio and market monitoring.
Reinhard Blasi is responsible for EGNOS Data Access Service (EDAS) beta testing and contributes to market analysis.
François Boullete is responsible for the market monitoring and forecasting process.
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