The EU Agency for the Space Programme (EUSPA) and the European Investment Bank (EIB) have published the GNSS Investment Report. The report shows that with market share of approximately 25%, Europe currently enjoys a strong position within the global GNSS downstream market — a market that is expected to see revenues reach EUR 220 billion this year and up to EUR 510 billion by 2032. Already today, consolidation has become a key characteristic of the market, as has the creation of global leaders with significant market share.
Several European companies are global leaders in their sectors, including the manufacturing of GNSS components, receivers for road and maritime applications, and agriculture. But in fast-growing areas such as consumer solutions and drones, European companies are under-represented. According to the report, this situation, combined with increased competition across the board from the downstream GNSS market, could chip away at Europe’s market share and future competitiveness.
The report provides a comprehensive investment analysis of the global navigation satellite systems (GNSS) market, examining and forecasting the dynamics of the sector overall. It also outlines the current state of play regarding available public and private funding and identifies needs and funding gaps for GNSS companies and startups in the European Union.
Key findings of the report include:
- Europe benefits from increased funding such as the CASSINI initiative (up to EUR 1 billion in funding) and the forthcoming InvestEU fund (total funding envelope of EUR 26 billion).
- Europe lags behind other global players in terms of private funds invested worldwide in space startups between 2015 and 2020 (the United States accounted for 67% of all private investment in 2020).
- European GNSS-specific R&D expenditure is lagging behind North American and Asian-Pacific companies. Catching up would require the European Union to invest between EUR 34.1 billion and EUR 42.7 billion in GNSS R&D over the next ten years.
The report provides recommendations on supporting future EU competitiveness in the GNSS downstream market. These recommendations include the need to mobilise significant investment envelopes through tailored instruments, supported by technical capacity-building activities for fund managers. Moreover, the report recommends support for the adoption of GNSS solutions in other sectors of the economy and ongoing monitoring of the GNSS market, with a special focus on identifying European rising stars.
The report finds that Europe still holds a strong position in the global landscape of downstream GNSS solutions — products and services linked to navigation satellites. However, up to EUR42 billion in public and private investment will be needed over the next ten years if Europe is to stay competitive and remain in a position where it can rely on domestic suppliers.
In 2019, 71% of all worldwide funding for space companies came from venture capital and private equity companies. While the first group tends to invest at relatively early stages of a company’s development, private equity investors are more risk-averse and require predictable revenues, making it difficult for early-stage companies to secure funding for their expansion from these investors. In the near future, the share of venture capital and private equity investments is expected to increase.
“Satellite navigation applications and services are strategic assets. They provide the future foundations for a competitive European transport and agriculture sector and help to address climate change risks,” said EIB Vice-President Kris Peeters. “European companies need to be at the forefront of these technologies. If we don’t want to depend on foreign big tech to meet our demands, we need to address funding gaps for space in the European Union. As a cornerstone investor in Europe’s innovation ecosystem, the EIB stands ready, together with its partners, to mobilise the private and public resources we need to remain competitive.”
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