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Towards a definition of New Space? The entrepreneurial perspective. New Space Vol 6(3) (2018), pp. 187-190.



The term New Space and New Space Economy is very frequently used but not fully defined scientifically. The article attempts to propose such definition with emphasis on the entrepreneurial perspectives.
Toward a Definition of New Space?
The Entrepreneurial Perspective
Walter Peeters
International Space University (ISU), Illkirch-Graffenstaden, France.
The concept of new space activities has gained a lot of public
interest and is frequently used in discussions. However, the
boundary between these new space activities and commercial
space activities is not well defined and creates some confusion.
Emphasis here is, therefore, placed upon a considerable differ-
ence between both, namely the entrepreneurial character of new
space and equity funding. To stimulate further discussion, a
definition of new space activities is proposed, putting emphasis
on this entrepreneurial perspective.
Keywords: new space, commercial space, definition proposal,
equity financing
By lack of a generally accepted definition, there is an
ongoing debate about the differences between new
space activities (and related economy) and commer-
cial space activities. Indeed, several presenters of, for
example, satellite operators are describing new space activi-
ties, and the resulting new space economy as being similar to
the services they have been offering since several decades and,
therefore, as nothing new.
Even if this journal is now fully dedicated to new space-
related articles, there seems, therefore, a clear need for clarifi-
cation. A recent article in the journal outlines the relationship
between new space and the new geopolitical context or space
This approach is no doubt valid but it is felt useful
to put emphasis as well to the entrepreneurial aspects linked to
the search ofnew and novel space applications and the different
steps of equity financing needed to accomplish this goal.
This article attempts to highlight the different approach
and, as a result thereof, a definition of new space is proposed
for discussion.
The space commercialization effect was the process that
took place with the transfer of space activities from the public
to the private sector, as presented in Figure 1.
Let us first consider the transfer mechanism as depicted in
Figure 1 in more detail.
Space activities were initially government financed, being
the main driving force of national prestige. Two main players,
the United States and the (then) USSR, were involved in this
Space Race to put, for example, a first satellite and human in
space or humans on the Moon. Two well-known astronauts,
Apollo15 commander David Scott and Russian cosmonaut
Alexei Leonov have described on the basis of detailed inside
information the different perspectives as both of them were
important actors
in this Space Race.
Financing of these activities was based uniquely on gov-
ernment (hence tax) money, and due to the Cold War effect
such expenditures were never put in question in view of na-
tional prestige. This primary loop was, therefore, very pro-
minent in the years 1945–1970, although it started already
earlier with the development of suborbital rockets for military
When this public funding, mainly after the moon landing,
decreased rapidly, the major space companies either directly
or indirectly started to search for private space activities. An
early example is the offering of commercial space telecom-
munication satellites-based services that started off as a public
service (Intelsat, Eutelsat) but then became so profitable that
they attracted easily private funding after the deregulation.
The main characteristic of this, shown in Figure 1 as ‘‘spin-off
process,’’ was that they used similar design and development
methods as they were used to for governmental contracts. It is
evident that also the second loop generated spin-off both to
other industry as to the new space sector, as we will later
also note in Figure 2, and even back to government con-
tracts (leaner management techniques, operational proce-
dures, smallsats,.)
Once these activities proved to be viable, the initial public–
private partnerships (and hybrid companies resulting thereof )
more and more transferred to fully privately financed entities.
Examples are Intelsat and Inmarsat that got access to private
equity funding without public sector participation eventually.
This process created a rapid shift from governmental to
more commercial activities. If we take the distribution of space
activities according to the Space Foundation, we can conclude
DOI: 10.1089/space.2017.0039 ªMARY ANN LIEBERT, INC. VOL. XX NO. XX 2018 NEW SPACE 1
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that nowadays approximately not <75% thereof are nowadays
commercial activities, as we can note from Table 1.
A large part of the funding was provided by traditional
financing mechanisms of the large space companies (debt fi-
nancing) or partial government participation. As we can note
from a survey of analogue historical activities, we can con-
clude that such transfer happened also in the past in other
areas such as shipping, railroad transport, and commercial
Indeed, this scenario is closely linked to the dual use of
these activities.
The Indian railway system was initially developed to rapidly
deploy British troops all over the country. The same rationale
was given for further development of
the German railway system in 1841
and for the U.S. and Russian railway
As another example, there was a rapid
development in the aeronautical sector
during World War I with reuse of planes
for civil transportation from 1919 on-
ward (U.S. production lines were able
to produce not <1,000 DH-4 planes
monthly in 1918
Dual use of space activities, in par-
ticular in the fields of localization
(NAVSTAR, later called Global Posi-
tioning System [GPS]) and Earth obser-
vation (such as the U.S. SBIRS Early
Warning system), not only justified
government sources of early financing, but are also the rationale
that government space activities will remain to exist.
With a solid space infrastructure in place (in terms of
navigation systems such as GPS and Galileo, commercially
accessible Earth observation systems, and excess transponder
capacity in the field of telecommunications), young entre-
preneurs are developing new applications.
A major distinction with the previously described com-
mercialization activities is that these entrepreneurs are forced
to look for inexpensive solutions to reduce the investment
efforts as well as searching for cheap launch possibilities (in
general as secondary payloads). Note that for launch oppor-
tunities, they have a larger freedom to do so as they are less
Fig. 1. Transfer mechanism from public to private space activities.
Fig. 2. Distinction between commercial space and new space activities.
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bound by regulatory restrictions (contrary to, e.g., European
Space Agency satellites where by preference European launchers
shall be used).
A second important distinction is that, having limited or
none collateral, the new space entrepreneurs need equity
funding and financial partnerships.
The latter point, in particular, leaves the new space entrepre-
neurs no choice but to look for first financing rounds typically in
sequential order, gathering first seed funding from family,
friends, and founders sources. Initial equity funding, on the basis
of a solid business plan, is then in general found by including
business angels and business angel networks in the process.
In the growth phase of the activities, structured equity fi-
nancing by venture capitalists is the next logic step, whereby a
sharing of the ownership is a condition sine qua non, even if
this step is not always popular in the eyes of the founders.
We can note here the growing interest in crowdfunding as an
early funding source. In addition to well-known crowdfunding
platforms such as Rockethub and IndieGoGo, Kickstarter has
been most successful in the space field. We can refer to ex-
amples such as LightSail,
exploring the concept of solar sail
propulsion (1.2 million US dollars [MUSD] pledged), Arkyd
promoting a space telescope (1.5 MUSD), and Lunar Mission
a scientific mission to the Moon (0.9 MUSD).
For profit-making activities, this mechanism could become
interesting if equity crowdfunding could become a more fa-
miliar and streamlined possibility, once the regulatory frame-
work would have been fully established and such equity
crowdfunding platforms will be fully operational.
The new space activities development, driving these com-
panies, can, therefore, be represented as per Figure 2,asadd-on
to Figure 1.
The main difference highlighted is that commercial companies
have mainly debt financing mechanisms and shareholders,
which could also be public. They, therefore, are more focused on
large applications such as remote sensing or telecommunication-
based applications. New space—entrepreneurial—companies
require equity financing and target completely new markets such
as navigation applications and integrated services.
As an example of successful new space activities, we can
refer to the relatively recent SPIRE company,
formed by a
number of International Space University alumni of the
Master of Space Studies class of 2012.
Indeed, the concept of this group is based upon a fleet of
inexpensive smallsats that can be produced in a very short end-
to-end in-house assembly, integration, and verification process
(even in periods of 8 days only). This is done by simplified design
principles and reduced lifetime requirements (typically 2 years)
to allow for mass and cost reduction.
The satellites are launched seeking for cheap opportunities,
mainly as secondary payloads, without constraints of origin.
The financing process followed the aforementioned equity
financing process, whereby the early involvement of a strong
business angel made a quick kick-start feasible.
If we combine all these considerations, a potential definition of
new space entrepreneurial activities is hereby proposed as follows:
Private companies, which act independent of governmental
space policies and funding, target equity funding and promote
affordable access to space and novel space applications.
It is hereby acknowledged that, as each definition, there is a
level of simplification imbedded in the aforementioned definition:
New space companies evidently have to abide to government
regulations, but they have more flexibility, for example, in
the choice of a launcher for their (secondary) payloads.
New space companies will surely not refuse government
contracts, but primarily they try to minimize their de-
pendency in the long run.
Affordability is a relative factor, but trying to penetrate in
the markets of emerging countries requires providing
solutions that are of good quality, at the same time re-
specting budgetary limitations.
Whereas there is no doubt from a macroeconomic per-
spective that we are evolving in space activities toward a
different ecosystem, there is still a microeconomic need to
distinguish between the commercial space activities as they
took place during the period 1970–2010 and the new space
activities nowadays. In this context we have to include the
present considerations and research on commercial space
companies and definitions thereof.
In this article, an emphasis is placed that financing is one of
the major differences between new space and traditional com-
mercial activities, in addition with a strong desire to develop
Table 1. Space Sector Distribution in 2015
Funding Source
Speeding in Billions
of Dollars
Commercial infrastructure
and support industries
Commercial space products and services 126.33
U.S. government space budgets 44.57
Non-U.S. government space budgets 31.95
Table adapted from Ref.
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new space applications independent from governmental mo-
tives. This also results in the need to find novel solutions to
reduce mass and costs as the entrepreneurs are depending on
equity financing.
Many entrepreneurs reduce their investment costs by
benefitting from the systems developed by government
funding in terms of satellites and launchers. They can,
therefore, propose more affordable applications in specific
markets, which are not the prime targets of the commercial
space companies focusing on large turnovers.
It is on this basis that a proposal is made for a definition of
new space activities in this article, hoping to initiate an in-
teractive dialogue.
No competing financial interests exist.
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Address correspondence to:
Walter Peeters
International Space University (ISU)
F67400 Illkirch-Graffenstaden
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Full-text available
The goal of this article is to define "commercial activities" and "space industry actors" of the global space community as a foundation for clear communications (important for informal discussions and formal agreements alike) and academic studies. To facilitate better communications through clear definition of the word "commercial," two dimensions of "commercial activities" are identified to include the level of subjugation to market forces and independence from government control, based on multiple U.S. government documents and using a qualitative analysis method. The practical result of the analysis presented here identifies the proper response to the question "Is this company commercial?" as "This is a private (or hybrid, or public) firm engaged in commercial activities." To clearly define the set of actors included in academic analyses of different space industries, a culturally neutral definition of "space industry actors" is also identified using an established glossary of organizational forms. Although the intent is to develop a definition of "commercial" from a global perspective, this initial study uses source material primarily from the United States in formulating the definition. The resulting "Market Sector" is defined to include all Public, Hybrid, Quasi and Private Corporations, as well as Market Non-Profit Institutions (NPIs) Serving Businesses or Market Production NPIs. All space-related Market Sector and General Government Sub-Sector entities would be included in academic industry analyses of different space industries.
Traditionally, the ecosystem of space was controlled by national activity and was a state-only playground. In the past several years, we have witnessed dramatic changes in global space activity toward greater involvement by the private sector. These changes come together under the overarching expression, "New Space." New Space is drawing considerable attention by many in the space sector. Nevertheless, what does it mean? This question may be answered in many different ways: innovative technologies, entrepreneurial activity, new models for R&D, commercialization, financing, new frontiers and explorations, etc. Understanding the complexity of the changes in the ecosystem of space is important to better forecast its implications, opportunities, and challenges. This article provides an overview and analysis of the differences between the ecosystems of "Old" and New Space.
There is scientific proof that the study of past analogues can help us to judge the development cycles of future projects. Faster transport of goods and persons has always been a major concern for humans in view of conquering next frontiers. It is therefore obvious that the development process of past transport means has a strong analogy with the developments of New Space nowadays and in the near future. We will therefore make an analysis of past sea, train, and aeronautical transport developments and financing processes in order, by analogy, to try to formulate conclusions for present New Space developments and their future evolution. We will also point out that each new development has encountered strong skepticism by experts. There is little or no hope that this will improve in the future.
Two Sides of the Moon: Our Story of the Cold War Space Race
  • A Leonov
  • D Scott
Leonov A, Scott D. Two Sides of the Moon: Our Story of the Cold War Space Race. New York: Thomas Dunne Books, 2006.
Encyclopedia of Political Science. 1881;3:118. library/YPDBooks/Lalor/llCy888.html (Last accessed on
  • J J Lalor
Lalor JJ. ed. Encyclopedia of Political Science. 1881;3:118. library/YPDBooks/Lalor/llCy888.html (Last accessed on June 21, 2017).