Nations Worldwide Position for Leadership in the $1.8 Trillion Space Economy

As the space economy approaches a projected $1.8 trillion valuation by 2035, nations across every continent are accelerating efforts to develop indigenous space capabilities. Motivations differ by region, from national security imperatives in Europe and the Indo-Pacific, to economic diversification in the Middle East, to humanitarian priorities in the Global South, yet one challenge is universal: the shortage of specialized space expertise.

“Whether examining developments in Europe, Asia, the Middle East, or across Africa and South America, there is widespread recognition that nations must develop indigenous space capabilities,” notes Brad Head, Managing Director of International Partnerships at Elara Nova. “However, most countries lack the expertise to make this transition. Like any emerging technology sector, they face the challenge of building from zero to operational capability, then scaling sustainably.”

Indo-Pacific: Addressing the Pacing Challenge

The Indo-Pacific remains the primary theater of space-based strategic competition, where China’s rapid military space development poses the most pressing operational challenge to U.S. and allied systems. This pacing threat demands immediate, coordinated responses from regional partners.

Australia and New Zealand represent the most advanced partnership model in the region. Combining strategic geography, robust commercial space sectors and proven willingness to provide access and basing rights, they are well-positioned as operational contributors in contested environments.

Japan and South Korea face more immediate operational requirements. With forward-positioned U.S. Space Force headquarters in both countries, collaboration extends to space situational awareness, precision navigation and timing, and missile warning and tracking. Both nations also seek to expand sovereign space industries, creating opportunities for technology partnerships that reinforce regional resilience.

Europe: Advanced Force-Providing Partners

Europe represents the foundation of allied space cooperation, where NATO’s most capable partners are building sophisticated space forces that will operate alongside U.S. capabilities. NATO’s 2019 declaration of space as an operational domain created new requirements for coordinated capability development, and the Hague Summit’s commercial space strategy and increased defense investment pledges, signal clear intent.

European allies are uniquely positioned to act as force-providers, supported by advanced industrial bases, established procurement systems and experience deploying high-end capabilities in coalition environments. Complementarity between NATO’s defense-driven priorities and the European Union’s civil and commercial space programs creates a dual-track foundation for capability growth. Russia’s annexation of Crimea, destructive anti-satellite testing, and invasion of Ukraine have further underscored the urgency of collective defense measures.

Middle East: Diversification and Regional Security

The Middle East presents a dual dynamic: economic diversification initiatives that drive ambitious space investments and shared security concerns, particularly from Iranian missile threats, that demand operationally relevant capabilities.

Gulf Cooperation Council (GCC) states such as Saudi Arabia, Qatar and the United Arab Emirates are investing heavily in space as part of broader economic transformation agendas. While often initiated as symbols of national ambition, these programs can be guided toward architectures that also strengthen regional security. Capability assessments focused on missile warning, tracking, and situational awareness can underpin cooperative space-based early warning systems and data-sharing arrangements.

Israel, already a regional leader in satellite programs, missile defense and intelligence-gathering, brings advanced capabilities that can be integrated into broader regional frameworks. Collaboration in next-generation satellites and intelligence, surveillance and reconnaissance (ISR) systems, coupled with expanded data-sharing protocols, can enhance collective resilience against missile and cyber threats.

Central Asian states including Kazakhstan, Uzbekistan and Tajikistan represent another dimension of this theater. Seeking alternatives to Russian partnerships, these countries offer opportunities for democratic cooperation that counter authoritarian influence while building indigenous expertise.

Global South: Development Priorities in a Competitive Environment

For much of the Global South, space is viewed primarily through the lens of humanitarian assistance, disaster response, climate adaptation and connectivity rather than traditional security. These priorities create meaningful opportunities for democratic partnerships that provide both development benefits and strategic resilience.

African nations, in particular, emphasize environmental monitoring, agricultural optimization and disaster management. The newly established African Space Agency provides an institutional framework for cooperative capability development. Satellite communications also serve as a lifeline for education, healthcare and economic participation in regions historically marginalized from global connectivity.

From a strategic perspective, these partnerships also serve allied security interests.

“We have space domain awareness coverage gaps in the Southern Hemisphere,” Head notes. “Nations in these regions offer optimal geographic positions for monitoring emerging threats, while meeting their own development needs. Success in this competition will depend on demonstrating that democratic partnerships deliver more effective, transparent and mutually beneficial outcomes than authoritarian alternatives.”

The Spectrum of Space Cooperation

Across all regions, international space engagement follows what Head describes as a “spectrum of cooperation,” a progressive framework that accommodates varying levels of maturity:

Foundational Level: Space Situational Awareness sharing agreements with U.S. Space Command promote responsible space operations through bilateral partnerships.

Operational Level: Global Sentinel initiatives strengthen international partnerships through enhanced collaborative frameworks.

Training Level: Schriever Wargames enable joint exploration of emerging space challenges and cross-domain integration.

Strategic Level: The Combined Space Operations Initiative addresses space sustainability while developing counterspace capabilities.

Operational Integration: Operation Olympic Defender represents the highest cooperation level, integrating multinational spacepower for deterrence and defense.

This spectrum provides partners with flexible entry points while creating clear pathways for deeper engagement as capabilities, trust and strategic requirements evolve. The framework recognizes that effective space cooperation requires matching partnership levels to national capabilities and strategic priorities rather than imposing uniform approaches across diverse regional contexts.

Elara Nova’s Strategic Partnership Approach

As space becomes central to both national security and economic development, the need for specialized expertise presents both a challenge and an opportunity. Elara Nova addresses this through its Capabilities, Training, and Administration (CTA) framework, which is a methodology pioneered in the establishment of the U.S. Space Force and refined through successful international partnerships.

Capabilities Development begins with vendor-agnostic requirements analysis, ensuring optimal system architectures that balance sovereign control with commercial innovation.

Training Excellence develops indigenous expertise through a three-phase pipeline of education, mission-specific preparation and operational integration, employing train-the-trainer models for sustainability.

Administration Framework establishes governance structures, policy processes and resource management systems to ensure long-term institutional resilience.

“Elara Nova’s leadership helped establish both U.S. Space Force and Space Command while supporting commercial space sector growth,” Head explains. “Our CTA framework enables nations to navigate complex space challenges through expert partnership, building the capabilities, expertise and institutional foundations necessary for sustained space leadership rather than external dependence.”

In an era defined by great power competition and global economic transformation, success will depend on partnerships that combine technical expertise with institutional knowledge. Elara Nova stands ready to help nations translate ambition into capability, ensuring sovereign resilience while contributing to collective security and stability.

Elara Nova is a global consultancy and professional services firm focused on helping businesses and government agencies maximize the strategic advantages of the space and aeronautics domain. Learn more at https://elaranova.com/. 

Dialogue Between Private Equity and National Security Can Jumpstart Future Space Economy

Two barriers to entry have historically defined the relationship between capital markets and the space sector: the need for significant upfront capital and long return on investment (ROI) timelines. These barriers have created a hot-and-cold dynamic between capital markets and the space sector, as demonstrated by Space Capital’s Space Investment Quarterly: Q4 2023 report that found the space economy witnessed a private equity investment of $17.9 billion in 2023, a year-over-year decline of 25 percent compared to 2022. 

But projections for the space economy not only remain high, they are quickly accelerating. A recent report by the World Economic Forum and the McKinsey & Company found that the space economy will reach $1.8 trillion by 2035, half a decade sooner than the $1 trillion projection set out by Morgan Stanley last year. As a result, new business opportunities are quickly emerging as a commercial launch market enables cheaper access to space and the Department of Defense (DOD) shifts toward a proliferation of assets across the next warfighting domain.

“The space industry has gone through cycles,” said Kirk Konert, managing partner at AE Industrial Partners. “With budget declines at NASA and other government-driven programs, space hasn’t been the best place to invest private capital. But the ability to get assets on-orbit cheaper and quicker is creating opportunities for different business models within space and has allowed investors to make more returns on investments, which is increasing overall interest in the market.”

A New Frontier Requires Infrastructure

With respect to the current state of the space economy, General Stephen Whiting, Commander of U.S. Space Command, likens it to the days of the Lewis and Clark expeditions across the American West. Like those frontier expeditions, NASA’s historic Apollo missions to the moon generated excitement for what’s possible in a new domain. But without an infrastructure in place to go back, commercial opportunities remain limited. So what the space economy needs today is an equivalent to the combination of infrastructure and incentives that kick-started the settling of the American West: railroads and the gold rush.

“The railroad analogy is interesting because the accelerant to drive traffic faster was the gold rush, and so these little towns popped up along the railroads to get out West,” said Eddie Papczun, founding partner at Elara Nova: The Space Consultancy. “Similarly, we need infrastructure in space, but building infrastructure in space is a lot harder than building a train track across the country. But that infrastructure will be a force multiplier and an accelerant to the space economy, because as soon as you can get to the moon, cis-lunar and beyond, everything changes.”

As the visceral entryway into space, launch tends to dominate the public’s perception of the space industry. But the start-up days of the launch market have largely settled, as a handful of reliable mainstays are now providing cheaper and more frequent access to the space domain. However, this access to space can enable these other, necessary infrastructure elements to take shape. 

“If you’re looking to start another launch company, you’ve already missed that opportunity,” Konert said. “Entrepreneurs looking for seed capital to start a space company should project where the market will be in ten years, versus where it is today. Instead, you should focus on the lunar economy, on-orbit-servicing and decommissioning of satellites because the trends are there with proliferation.” 

Opportunities in the Proliferation of Space

The word ‘proliferation’ is quickly becoming the defining mantra of the developing space economy. Due to the historically unreliable and expensive nature of launch, the DOD traditionally prioritized getting a few, large assets on-orbit to facilitate space-based capabilities. But as space started to evolve into a contested domain, those few assets became what Gen (Ret) John E. Hyten, former Vice Chairman of the Joint Chiefs of Staff and senior principal advisor at Elara Nova, referred to as “big, fat, juicy targets,” for adversaries to attack and disable.

“This shift toward proliferation was primarily driven during General Hyten’s time at the Air Force’s Space Command,” Papczun said. “He hired Mike Dickey, one of the founding partners at Elara Nova, to architect the future of space from a national security perspective with the idea of proliferating the orbits. That demand signal essentially initiated the berthing of the Space Force.”

Proliferated architectures create resiliency in that if a space-based asset is attacked or disabled, the DOD can adapt its architecture to maintain its national security capabilities. In turn, this shift toward highly-populated and proliferated space architectures can also generate future business opportunities. Through programs like the Space Development Agency’s (SDA) Proliferated Warfighter Space Architecture (PWSA), the ancillary markets supporting the Space Force’s proliferation efforts have already caught the attention of the investment community. 

“There was always a niche in the space market, like producing composites for a space project,” said Konert. “But suddenly, companies started getting orders for not just one component, but dozens of components for this whole proliferated constellation of space activity. As a result, private equity firms started seeing an opportunity to invest in the space sector.”

A SPAC Bubble in the Space Market

Excitement generated by the proliferation of space however, has not always led to successful returns on investment. This particularly rang true after what proved to be a SPAC-bubble in 2021, from which the investment community is still recovering today. Special Purpose Acquisition Companies, or SPACs, are a common means of raising capital through an initial public offering (IPO) to acquire or merge with an existing company. For a capital-intensive industry like space, SPACs became prevalent as a series of space companies went public in 2021.

“The SPACs caught us by surprise in that every space company that had momentum or a good story to tell was going public,” Konert said. “The market cap and interest in space from retail and institutional investors exploded. But the business models weren’t worthy enough to justify the valuations they were receiving and that led to bankruptcy or near-bankruptcy for many of them.”

According to Papczun, the SPAC-craze of 2021 compromised what is an otherwise effective means of raising capital for emerging market opportunities in sectors like space.

“SPACs are a great tool because it’s an acceleratant that raises money quickly for a company that has sound business fundamentals in place. In 2021, we had bad actors who saw an opportunity to take this tool and leverage it for personal gain, and the companies were the ones that suffered because they weren’t ready to go public.”

Incidentally, the 2021 SPAC-bubble and its subsequent fall-out reinforced the risk-averse and cyclical approach the investment community has traditionally held toward the space sector. But Konert says the interest from the investment community still exists.

“Institutional investors are curious and interested in the space sector, but space is not yet considered one of those vertical sectors like industrials, business services and technology. Frankly, there needs to be more wins and over the coming years, you’ll see increased interest from institutional investors because there will be some tremendous success stories to come.”

A Future Space Economy from the Ground Up

One potential success story may come from an often overlooked, but critical component to the space economy: ground networks. According to a recent White Paper released by Elara Nova, the current Satellite Control Network in place today is outdated and overburdened to appropriately support the proliferated future of national security space. The White Paper generated a broader call-to-action, co-written by General Hyten and Elara Nova founding partner Major General (Ret) Roger Teague, to develop solutions for a new ground-based network to support the future space economy. 

“Space-based assets are useless unless they can communicate through ground-based, terrestrial networks,” Papczun said. “We need hardened antennas that are cyber-protected and enable resiliency on the ground, so we can communicate with these satellites. Ground systems cannot just sit out of sight and out of mind until the moment that you need them, just to find their capability compromised.”

Upgrades to the Satellite Control Network, like other ancillary market opportunities defining the future space economy like orbital debris and on-orbit servicing, can generate the success stories sought for by the investment community. These success stories, however, may not always be directly related to national security space. That’s why, through its recently-released U.S. Space Force Commercial Space Strategy, the DOD is using its influence to cultivate a commercial space market that will also indirectly develop the national security space solutions of the future.

“The DOD’s commercial space report envisions how the DOD should leverage the national defense industrial supply chain and private capital to be a force multiplier,” Konert said. “The investment community should be listening to the national security customer about their problems and how portfolio investments can address them. If commercial companies can attract government funding to solve the DOD’s problems as a program of record, that creates more successes and portfolio wins that will attract even more capital.”

Now, after its first full year in operations, Elara Nova: The Space Consultancy is also evolving to not only facilitate conversations between the government and industry, but to bring the investment community into the fold as well.

“Sometimes it’s difficult for the government to move quickly because it’s very hindered by regulatory oversight,” Papczun said. “The idea for Elara Nova to be an entity on the other side of that ‘frozen middle’ to help pull solutions through to support national security space. Now, we’re talking to the investment community, because we are an interlocutor between so many different parts of the traditional economy and how it sees space.”

Elara Nova is a global consultancy and professional services firm focused on helping businesses and government agencies maximize the strategic advantages of the space domain. Learn more at https://elaranova.com/.