Growth potential of Earth observation
The EO data exploitation market (data sales and value-added services) exhibits the highest annual growth of all the space exploitation markets, with an average rate above 13%. The need for EO data in geo-information products, and the increasingly central role of Big Data reinforce the development potential of commercial activities, making the young EO market particularly promising for the years to come.
A market with profound changes in business models and technology
The recent emergence of low-cost small satellite technology enabled EO companies to revolutionise their business models, based on near real-time low resolution images, such as those provided by the Dove satellites operated by Planet (formerly PlanetLabs) or the ICEYE radar satellite constellation. Combined with the growing and promising EO market, these low infrastructure cost projects prompted private investment in space ventures, especially in North America, from venture capital funds, private equity firms or non-space angel investors.
In addition, the tremendous amount of data generated by EO satellites stands as both a challenge for EO companies and an opportunity for large ICT players, such as Google and Amazon, which are fitted to tackle Big Data issues and willing to cross-fertilise their IT capabilities. PwC considers that stimulating private initiatives on the European EO market, supporting more vertically integrated innovative models, developing user-oriented data access platforms based on new design-thinking approaches and ensuring synergies between EO and ICT are crucial to maintaining a competitive and inspiring European EO sector.
Institutional spending on EO programmes has increased over the years and the deployment of Copernicus assets that began in 2014 will intensify. However, national policy differences and a lack of standardisation between frameworks may prove to be an obstacle to the efficient use of EO services.
The use of microsatellite constellations means that new business models can be developed, while payload performances continue to improve.
Commercial off-the-shelf components for satellite manufacturing and miniaturisation are reducing satellite costs.
The emergence of private business ventures and new sources of private financing, especially in the United States, should result in riskier projects being pursued. However, the significant amount of EO data will prove challenging for Big Data and efficient data dissemination, as substantial investment will be required to cover the infrastructure costs.
Changes in demand
The demand for EO satellites is growing as markets for applications become increasingly diversified. Furthermore, demand from emerging economies is expanding rapidly. Satellite imagery services could, however, be challenged by drone‑based remote sensing offerings, which could be considered more suitable in certain markets.