Meld. St. 32 (2012-2013)

Between heaven and earth: Norwegian space policy for business and public benefit — Meld. St. 32 (2012–2013) Report to the Storting (White Paper)

To table of content

3 Development of space activities in Norway

Norwegian space policy has always been pragmatically oriented. Public investment in space-related activities has never been an end in itself, but a tool for meeting important national priorities in other policy fields. The requirement of tangible social benefit, which today has become a part of space policy everywhere in the world, has always been a prerequisite for space activities in Norway.

Most Norwegian space activities have been motivated by geographic factors. Norway is an elongated country, reaching far to the north, with a sea area more than six times larger than its land area. We have a scattered population, rugged topography, long distances to cover and harsh climatic conditions. In addition, Norway’s economy includes heavy elements of natural-resource extraction and maritime transport. The applied use of navigation, communication and earth observation satellites has been emphasised in addressing needs related to ship traffic, fisheries, agriculture, offshore petroleum and the public supervision of maritime activities. Another important objective for space investment has been to stimulate growth and innovation in Norway’s high-tech economy.

As a small country, we have had limited ability to invest in space activities on our own. International cooperation has always been the mainstay of Norwegian efforts in space, first through ESA and later, to an increasing degree, in agreements with the EU. The cost of shared satellite systems is usually divided in accordance with the size of each participating country’s economy. A country’s cost share does not necessarily reflect the extent of its use of a particular system. A small country, therefore, gets off with a relatively low portion of costs, while gaining access to the infrastructure on par with countries that pay a great deal. Norway may be seen as potentially receiving an extra large return on its investments in space infrastructure. Norwegian infrastructure positioned in Svalbard, on Jan Mayen Island and in Antarctica has made ​​Norway an attractive space partner. To take advantage of the international collaboration, supplementary national measures have been instituted, the foremost example being the national development support programme Nasjonale følgemidler.

More detail on Norway’s international collaboration, national policy support instruments and national infrastructure will be presented in Chapter 5, 6, 7 and 8. In this chapter, we examine the political priorities that have fuelled Norway’s rise in space. These priorities can be grouped roughly into three categories: Norway’s need for space-based services, the development of its high-tech economy and the strengthening of its research capabilities.

3.1 Norway’s space-based service needs

The desire to meet national user needs, both public and private, has been an important motivation behind Norwegian space efforts for as long as they have existed. Since the 1960s, Norwegian authorities have been willing to invest strategically to obtain space-based infrastructure, with the goal of meeting national user needs cost-effectively. Most Norwegian efforts have stemmed from challenges relating to the country’s business interests and geography. Maritime communications and ocean monitoring fit that description, as do other challenges more specific to the High North.

Figure 3.1 Norway’s maritime boundaries

Figure 3.1 Norway’s maritime boundaries

Source Norwegian Mapping Authority

The first major challenge that prompted Norway to check out satellite-based technology was communications – specifically, the need to communicate with Norwegian ships, the Svalbard archipelago and oil platforms in the North Sea. Prior to satellites, high-frequency radio (HF) was the best technology for that purpose, but its utility was limited by variable signal coverage and capacity constraints. In the late 1960s, Norwegian authorities began studying various ways to establish national satellite communications capacity. This result, in 1976, was that Norway became the first country in western Europe to have a national satellite system, in the form of the NORSAT A satellite system. It was based on the rental of satellite channel capacity through the International Telecommunications Satellite Organisation (INTELSAT), and accommodated communications with Svalbard and with offshore oil platforms. Ship communications remained an unsolved problem. In the 1970s, Norwegian authorities assumed an active role in the International Maritime Organisation (IMO) and in the collaborative European project MAROTS, whose aim was to create a global maritime satellite communications system. This effort led to the 1979 establishment of the International Maritime Satellite Organisation (INMARSAT), which operated a satellite system of the same name. Norway’s active involvement gave it influence over INMARSAT’s system design, performance specifications and coverage areas, and led indirectly to the emergence of a competitive satellite communications industry in Norway in the 1970s and 1980s. Given strong industry and user interests, satellite communications have remained an important priority for Norwegian industry and the Norwegian authorities, as demonstrated by heavy Norwegian participation in ESA development programmes in this area.

Figure 3.2 ESA satellite CryoSat measures the topography of the Arctic ice

Figure 3.2 ESA satellite CryoSat measures the topography of the Arctic ice

Source Illustration: ESA

Maritime monitoring has for many years been another important priority for Norwegian space activity. Norway’s management responsibilities extend across vast ocean areas that are difficult to monitor satisfactorily by way of aircraft, ships or land-based installations. Early on, it became clear that observation satellites would be a cost-effective aid in enforcing Norwegian sovereignty at sea. The need to monitor maritime areas has been a major factor in many of the key decisions and policy measures that have helped shape the Norwegian approach to space. The chance to gain expertise and exert influence over the development of earth observation technology was a significant incentive for Norway to join ESA in 1987.

Textbox 3.1 Radar satellites and Radarsat

Radar satellites transmit microwaves and measure what is reflected back from the ground or sea. These signals pass right through cloud cover, and measurements can be made day or night. Radar satellites are thus an important tool for monitoring sea ice, oil spills, ship traffic and landslide danger. Due to their high power consumption, the satellites cannot operate continuously. Norwegian participation in international radar satellite projects helps ensure that high-priority areas for Norway are scanned. ESA’s planned radar satellites Sentinel-1A (2013) and Sentinel-1B (2015) will permit additional surveillance of Norwegian maritime areas.

Norway’s 2002 Radarsat agreement with Canada gives Norway the right to order about 2,000 images per year from Canada’s Radarsat-2 satellite. The agreement follows up on a previous partnership between the two countries dating back to Radarsat-1, which was launched in 1995, and also gives Norway access to radar images over Norwegian areas that other countries or organisations order. The PwC evaluation of 2012 (see 3.3) attests to the agreement’s benefits and cost-effectiveness for Norway. The current Radarsat agreement secures data access through 2014.

The need for additional Norwegian access to other kinds of radar satellite is under study. One alternative is for Norwegian agencies, acting independently, to buy high-resolution data as required in the «spot market». Experience from the Radarsat agreement suggests that collective access through the Norwegian Space Centre may hold advantages.

Norway began to employ observation satellites for operational monitoring of Norwegian waters in the mid-1990s. The need for improved coverage area led to long-term bilateral collaboration with Canada on the use of Canadian radar satellites.

Developments since then have shown earth observation satellites to be increasingly indispensible as tools for monitoring Norwegian maritime areas. Satellites provide an overview of large areas, enabling officials to direct more costly monitoring resources, such as aircraft and ships, to areas where closer scrutiny is required. Norway has regularly mounted new initiatives to maintain and enhance the national capacity for ocean monitoring, especially related to vessel traffic and oil spills. The Norwegian vessel-monitoring satellite AISSat-1 was lofted into orbit in 2010. Primarily monitoring areas where Norway has stewardship responsibility, it has also become an important resource in international collaboration, including the fight against piracy off the Horn of Africa. A major goal of Norwegian participation in the EU’s Copernicus earth observation programme has been the need to secure future ocean-monitoring capacity over Norwegian areas.

Textbox 3.2 AISSat-1

Figure 3.3 AISSat-1

Figure 3.3 AISSat-1

Source Photo: Norwegian Space Centre/Norwegian Defence Research Establishment/Seatex

The small maritime observation satellite AISSat-1 is the first satellite owned and operated by the Norwegian state. The Norwegian Coastal Administration uses data from the satellite to track civilian ship traffic in waters off Norway and Svalbard left uncovered by the country’s land-based Automatic Identification System (AIS) stations.

All large vessels are required to have an AIS transmitter on board that broadcasts information about their identity, destination and cargo. Along the Norwegian coast there is a chain of AIS stations, but they cannot track ships travelling beyond 40–60 nautical miles from shore. AIS ship signals now travel via Norway’s AISSat-1 satellite to the Vessel Traffic Service monitoring centre at Vardø, in northern Norway, and to the country’s rescue coordination centres. AIS information obtained by satellite makes it easier and faster for the vessel-traffic and rescue centres to monitor maritime activity, locate ships in need of assistance and identify vessels in the vicinity that may be able to help. Satellite-based AIS services also make it easier to identify vessels responsible for oil spills in Norwegian waters.

AISSat-1 is a nano-satellite measuring 20 cm x 20 cm x 20 cm. It moves in a polar orbit about 600 km above the earth’s surface, bearing a long-range identification and tracking system. It passes over the waters off Norway and receives AIS data from ship traffic every 90 minutes. The lifespan of such satellites is estimated at two or three years. The satellite was launched from India in 2010 and represents a joint effort of the Norwegian Coastal Administration, the Norwegian Space Centre, the Norwegian Defence Research Establishment and Kongsberg Seatex. Its successor, AISSat-2, is to be launched in 2013.

Norway’s investment in satellite navigation is another example of how national user needs have driven the development of Norwegian space activity. A major goal has been to address needs associated with maritime activity and the offshore oil and gas industry, but challenges in aviation and land-based operations have also been motivating factors. Norway’s decision to join the EU satellite navigation programmes Galileo and EGNOS in 2009 may be the clearest example of national navigation needs helping to shape Norwegian space policy. The desire to satisfy such user needs, especially relating to maritime navigation in the High North, was a key motivation.

However, Norwegian involvement in satellite navigation extends quite a bit further back in time. A cornerstone of Norwegian expertise in this area was laid in the early 1990s. A NATO exchange agreement made it possible for researchers from the Norwegian Defence Research Establishment (known best by its Norwegian acronym, FFI) to work in the GPS Joint Program Office, which was responsible for developing the American GPS satellite navigation system. The technology skills and system insight these researchers brought home with them allowed Norwegian engineering experts to address special navigational challenges. In Norway’s offshore oil and gas industry, the expertise was used to develop GPS-based technology for precision navigating, positioning and localisation during operations like seismic surveying and test drilling. Lower costs, greater accuracy and simplified procedures were the result.

Avinor, which operates Norway’s airports, was quick to develop GPS-based airport flight approach procedures. This early adoption of GPS technology stemmed from a recognition that Norwegian navigation procedures needed improving, especially after tragic aircraft accidents at Torghatten (1988) and Namsos (1993). Avinor is now in the process of introducing the world’s first satellite-based airport approach system (SCAT-1), which is to ensure safer approaches to Norway’s regional airports. The system is based in part on the Norwegian-developed technology.


COSPAS-SARSAT is a collaborative international search-and-rescue system. Using satellites in polar orbit, it relays distress beacon signals to ground stations. The system is thus able to pinpoint the site of emergencies transpiring in the northern seas.

With regard to land-based tasks, the Norwegian Mapping Authority has long been engaged in developing satellite-based services for geographical surveys. These efforts have led to simplification and cost savings in mapping and surveying for construction, property delineation and other tasks that require accuracy down to the decimetre, centimetre and millimetre. In order to provide such precision, the mapping authority operates a network of reference stations across the country.

Straightforward satellite communications, ocean monitoring and satellite navigation are not the only space policy areas where user interests have helped determine the way forward. The objective of improving search-and-rescue operations at sea gave rise to one of the first international projects that Norway joined: the satellite-based emergency warning system COSPAS-SARSAT (see Box 3.3). Weather forecasting is another field in which national user needs have been crucial to the shaping of Norwegian space policy. Since 1986, Norway has been a member of EUMETSAT, the joint European programme for weather and climate satellites, and the country has long participated in a wide variety of ESA weather satellite programmes.

Textbox 3.4 EUMETSAT

EUMETSAT is the European Organisation for the Exploitation of Meteorological Satellites. The organisation’s main goal is to provide information applicable to weather forecasting and climate research. ESA and EUMETSAT have established a partnership in which ESA develops new-generation satellites and EUMETSAT prepares the way for their operational use. Norway is a member of EUMETSAT, and Norwegian agencies and research institutions are among the end-users of the information provided. Norwegian companies have supplied technology for many of the satellites in EUMETSAT’s fleet.

3.2 Development of high-tech Norwegian industry

Business development considerations have long played a major role in Norwegian space activity. Business development has occurred partly as a by-product of measures implemented chiefly to find solutions to Norwegian user needs, but also a result of conscious efforts by the Norwegian authorities to use space activities to help develop the country’s industrial sector. Since 1970, Norway has created a niche-oriented, but competitive, array of space-oriented businesses. In some fields, the country is a global leader. Sales of Norwegian-produced goods and services related to space totalled about NOK 6 billion in 2011, with an export share of almost 70 per cent.

The most prominent policy instruments in the development of space-related industry in Norway have been the country’s participation in ESA, its participation in the EU’s Galileo and Copernicus space programmes, and the national technology support programme (Nasjonale følgemidler). A detailed account of how these contributing activities are organised will follow in Chapters 5, 6, 7 and 8. The theme of this chapter is how business development objectives have helped shape Norwegian space policy. There are three main mechanisms through which Norwegian investment in space has helped to promote growth and development in Norwegian industry. These can be designated as technological advancement, market access, and system insight. For 30 years, the desire to exploit those mechanisms to promote business development has been behind many of the key strategic actions of the Norwegian space effort.

The goal of technological advancement in Norwegian industry was a key motivation for Norway’s accession to ESA in 1987. ESA is an industry-oriented organisation in which technological development is carried out in close collaboration with industry. Most development tasks are contracted out to suppliers based within the member states. A high degree of industry involvement is also traditional in development projects executed internally by ESA. Member states are thus quite able to use their membership to boost their own industries. Norway’s ESA priorities have been guided in part by its ambition to develop technology relevant to Norwegian user needs and in part by its growth and development goals for Norwegian industry. Norwegian ESA participation has been especially strong in technology areas where we have large business interests, such as satellite communications. Norway has deliberately used its Nasjonale følgemidler support programme to enhance the positive effects of ESA membership on Norway’s business community.

ESA’s value as a tool for Norwegian technological advance has been largely twofold. First, participation has helped raise the technological level of Norwegian companies that provide goods and services to ESA development programmes. This has been possible through direct ESA funding of development projects, and through the transfer of technology to Norwegian companies from their ESA programme partners. Second, the provision of supplies to ESA test satellites has made ​​it possible to test out new technological components. Flight heritage, documenting that a company’s technology has already served aboard a satellite, is normally a prerequisite for the company becoming a candidate to provide operational satellite components in the institutional or commercial markets. However, much of the benefit that Norwegian companies gain from ESA participation is a matter of technological spillover – the repurposing of space-related technologies for use in other sectors. There are few companies in Norway that operate exclusively in the space sector. International competition in the sector is formidable, and the markets to which Norway has access (primarily ESA, the EU and the commercial satellite segment) are relatively limited. Many companies, though, combine their space-related activities with other high-tech business pursuits. Most of these companies use their participation in ESA programmes as a means to develop technology that can also be applied elsewhere in their operations. The spillover effect from space activity is most notable in the realm of advanced technologies suitable for extreme conditions. Likely beneficiaries include the defence, aerospace, offshore petroleum and maritime industries.

Textbox 3.5 Technology spillover

Products and product improvements that build on technology or expertise from ESA contracts and from Norway’s own national development support (Nasjonale følgemidler) contracts:

  • Receiver for AIS vessel detection (Kongsberg Seatex)

  • Gas detector for measuring explosive gas at oil installations (SINTEF GasSecure)

  • Calibration-free pressure sensor for extreme environments (Presens)

  • Technology for radiation detection (Ideas)

  • Technology for efficient transfer of images and video (Ansur)

  • Software for large, complex development projects (Jotne)

  • Data processing for ground stations (Kongsberg Spacetec)

  • Methodology for software validation (DNV)

  • Synergy effects between space and defence sectors (Kongsberg Gruppen and Nammo)

Market access has been a considerable motivational factor for Norwegian participation in the EU space programmes Galileo, EGNOS and Copernicus. EU space programme supply contracts have been reserved for bidders from countries participating in the programmes. Through Norway’s programme participation, Norwegian companies have been granted the same opportunity to compete for contracts as EU-based companies. Norwegian actors have proven themselves competitive, obtaining EU space-programme contracts valued at some 130 million euros through February 2013. In addition to direct sales income, those contracts represent high-profile reference projects for the companies concerned. Naturally, Norway’s ESA participation has also opened up a market for Norwegian businesses. But the aggregate direct value of ESA supply contracts is relatively low in relation to ESA’s value as a tool for technology development, partly because the volume of any single product purchased by ESA is normally rather limited.

System insight has been a motivating factor for Norway with particular regard to the EU space programmes, though ESA participation has led to a certain degree of system insight as well. Insight – as early as possible – into the technical, practical and commercial aspects of a satellite-based infrastructure system is a key to succeeding as a provider of products and services that exploit that system. Such insight can normally be achieved only through active participation in the development of the system. Norwegian authorities and business representatives have acquired a solid understanding of Galileo, EGNOS and Copernicus through participation in the governing bodies and working groups of these programmes. Gaining insight into those systems has been regarded as an important factor in Norway’s competitive strength as a supplier of products and services that exploit satellite navigation and earth observation data. For that reason, it has been a major objective of Norwegian space policy. Norwegian companies have also gained insight into ESA space systems. ESA activities are relevant primarily to upstream companies. That agency’s focus is on developing new technologies for satellites and launch vehicles; less attention is paid to building and operating infrastructure systems that may be favourable to value creation downstream. Nonetheless, Norwegian companies active mostly in the downstream sector report that they, too, benefit from participation in ESA programmes, by gaining insight into the technology that will underpin the next generation of operational satellite technology.

Textbox 3.6 Norwegian satellite communications industry

Norwegian companies involved in satellite communications had sales of NOK 4.2 billion in 2011, accounting for two thirds of space-related revenue in Norway. By far the largest portion consisted of communications services to the maritime sector, and to the broadcasting of television signals. Maritime communications service providers have proven to be very attractive as acquisition candidates, and most of them are now foreign owned.

Norway’s purposeful efforts to develop space-based industry by participating in EU space programmes and in ESA have been complemented by measures designed in the first instance to accommodate national user needs. That applies especially to business activities in the downstream sector, such as satellite communications and specialised satellite navigation services, where early involvement has paved the way for system insight, technology development and early testing of space-based services. Today, Norwegian suppliers are global leaders in services related to satellite communications and satellite navigation for the offshore sector. The Norwegian satellite communications industry grew in large part out of expertise built up in the 1970s in connection with efforts to provide satellite communications for Norwegian ships. Development of high-precision navigation services for the Norwegian offshore petroleum industry gave rise to the emergence of competitive Norwegian technology companies – one example being Fugro Seastar, which today is the leading supplier of high-precision navigation services to the offshore industry. Telenor Satellite Broadcasting, which by revenue is clearly the largest Norwegian business player in the space sector, is a prime example of how investments motivated by national user needs have sparked commercial success. In the 1980s, Norway’s challenging topography, large expanse and sparse settlement pattern made it difficult and expensive to develop a nationwide terrestrial network for television broadcasting. So Televerket, the state-owned forerunner of today’s Telenor, pursued the development of satellite broadcasting – a business that has since become a major commercial success. Since 1992, Televerket and then Telenor Satellite Broadcasting have acquired altogether six communications satellites. The company sells satellite capacity for broadcasting and for broadband service to shipping and offshore operations, and is currently the sixth largest satellite operator in Europe.

Textbox 3.7 Norwegian space players

Figure 3.4 Geographical overview of Norwegian businesses engaged in space

Figure 3.4 Geographical overview of Norwegian businesses engaged in space

Source Norwegian Space Centre

Norwegian actors in space include a wide variety of companies, scientific research institutes, public agencies and educational institutions, of which a selection is presented here. They either supply products and services related to space-based activity or are active users of satellite data. They are spread throughout the country and their range of activities is quite large – from maritime satellite communications and rocket engine production to managing fish resources and tracking sheep.

3.3 PwC’s evaluation of some Norwegian space activities

Under assignment with the Ministry of Trade and Industry, the consulting firm PricewaterhouseCoopers (PwC) in 2012 conducted an evaluation of Norway’s participation in the European Space Agency (ESA), the Radarsat agreement and Norway’s own national funding support programme, Nasjonale følgemidler. The evaluation did not cover scientific activities or Norway’s participation in Galileo and EGNOS. As a result, the evaluation does not provide a complete picture, but contributes helpfully to further space policy development. The review process was anchored in a reference group with input from relevant ministries, agencies and industrial players, and it was conducted in dialogue with the Norwegian Space Centre.

The report describes Norwegian space activities and the international framework in which they occur. It notes that important aspects of Norwegian space policy are working well, providing significant benefits to society; but the report also casts light on structural factors that may make policy adjustments necessary. It also makes several specific suggestions for the future design of Norway’s policy apparatus. A complete and thorough review of PwC’s comments and proposals is not possible in this white paper. We do present PwC’s assessment of the strengths and weaknesses it found in various segments of the space sector, along with its strategic and operational recommendations. Those recommendations form some of the basis for the analyses presented in Chapter 1 of this white paper. Recommendations not included in Chapter 1 are not a part of the Government’s policy.

The PwC evaluation focuses on Norway’s participation in ESA as well as the country’s national development support funding programme and the Radarsat agreement with Canada. The main conclusion is that Norway has benefitted greatly from all three. The report asserts that key aspects of the model for public support to the sector are working as designed, and that progress is being achieved towards the objectives of value creation, innovation, knowledge development, environmental protection and public security.

Textbox 3.8 PwC’s assessment of strengths in the Norwegian space activities it examined

  • Important aspects of the model for public support to the sector work as intended. These public policy instruments reinforce positive developments that contribute to the achievement of goals on wealth creation, innovation, knowledge development, environmental protection and public security.

  • Norwegian industry has large market shares in segments of the space-based service sector, particularly in connection with satellite communications and earth observation. Certain companies that produce space-related technical equipment have also seen revenues and market share grow, albeit to a lesser extent than the service sector.

  • Space activities create positive ripple effects across Norwegian industry. Positive synergies exist between the country’s various support mechanisms. The proportion of national space industry that is devoted to commercial activity is greater in Norway than in many other countries.

  • Norwegian space efforts have resulted in cost-effective systems that meet user needs in the public sector. The development of space-based systems for maritime surveillance, such as the AIS satellite, has been a particular success.

  • The Norwegian Space Centre’s expert advisory services and leadership are highly regarded by the authorities and by industry alike.

Norway’s space industry is more commercial in nature than its counterparts in many other countries. It has large market share in segments of the space-based services sector, particularly those related to satellite communications and earth observation. Several companies in this sector have experienced rapid growth in recent years. Certain companies that produce space-related technological equipment have also seen growing revenues and market share, albeit to a lesser extent than companies in the service sector.

The report also documents positive spinoff effects elsewhere in the economy, as well as positive synergism between the country’s various support mechanisms. Participation in ESA strengthens Norwegian industry in general, with ripple effects in the form of increased sales for companies that have participated in ESA programmes. The report suggests there is positive interaction between support mechanisms – between, for example, the national development support funds for industrial development (Nasjonale følgemidler) and ESA programme participation.

Textbox 3.9 PwC’s assessment of weaknesses and challenges in the Norwegian space activities it examined

  • Indicators are declining for Norwegian space-related industry as a whole. Total sales volume has not increased in recent years and the global market share for Norwegian companies is falling.

  • Space-related companies are being bought up and incorporated into foreign-owned concerns. In some cases this has led to operations being moved out of Norway.

  • Internationally, the sector is increasingly dominated by commercialisation and the emergence of new service segments. Norway’s set of policy instruments is somewhat out of alignment with this development.

  • Support mechanisms for industry are largely directed towards the production of space-related technology, while much of the international growth potential lies in service development.

  • Structural changes in international space programmes, including the EU’s enhanced role and increased activity by countries such as China, India and Brazil, pose a challenge to Norway’s position.

Likewise, the national development support funds in combination with initiatives like Radarsat and the AIS satellite development programme have resulted in cost-effective systems that meet space-related needs in the public sector. The development of space-based systems for maritime monitoring, such as the AIS satellite, is cited as a particular success. The PwC report also points out promising projects associated with space-based systems for surveillance of land areas. Last but not least, the report says that the Norwegian Space Centre’s expert advisory services and leadership are held in high regard by both the authorities and private industry. The NSC is also said to contribute to positive synergy among Norway’s different support mechanisms.

Textbox 3.10 PwC’s strategic recommendations

  1. Support should be reoriented towards market segments with significant growth potential and comparative advantages.

  2. Earth observation data services have large public-sector customers that can trigger further technology development and demand for services. A commercialisation strategy for government procurement of earth observation data services should be considered. A strong domestic market could fuel growth in new value-added segments.

  3. Support for space-related business development should increase in scope across the value chain and reach a larger number companies in order to ensure a level playing field among competing actors and solutions. Recruitment of new businesses in IT and telecommunications may help to increase the number of participants.

  4. Further support to segments whose growth is stagnating should be carefully weighed to maker sure support corresponds to the potential for value creation and growth. Companies offering space-related ground equipment have anchor customers in the maritime sector but limited growth and market share. Certain upstream sub-segments have achieved strong results. However, there are strong obstacles to upstream industry growth, and no national anchor customers.

  5. Other tools to encourage service expansion must be developed, a process that may involve national or bilateral programmes. In PwC’s view, ESA programmes are less useful for service development. National programmes may have to be expanded to develop support mechanisms for the commercialisation of near-market-ready downstream technologies.

On the other hand, the evaluation mentions a number of overall weaknesses, challenges and ongoing change processes that, according to PwC, might make it necessary to adjust the public policy apparatus that supports Norwegian space activity. The report cites declining indicators for the industry as a whole in Norway. Overall, public expenditures on space-related activities are rising faster than commercial sales. Even though some companies and segments are growing, the space sector’s share of Norwegian GDP is falling. Total sales volume has not grown in recent years, and the global market share of Norwegian companies is sinking. Ground equipment manufacturers in particular have lost a great deal of sales volume and market share.

Furthermore, few new companies have arisen in the past decade, and among the companies that have received support, there has been no growth in space-related employment. The report asserts that public funding has long been concentrated in a small number of actors – in particular, upstream companies that produce ground equipment and equipment for use in space. Meanwhile, the industry has experienced a prolonged period of consolidation, with space-related companies being bought up and incorporated into larger concerns. Some of these concerns have foreign owners, leading in some cases to the movement of operations out of Norway. Industry support programmes are largely geared towards the production of space-related technology, while much of the international growth potential lies in service development.

Textbox 3.11 PwC’s operational recommendations

  1. The Ministry of Trade and Industry should develop a comprehensive policy on space-related activities that assigns relative weights to industrial development, public-sector programmes and scientific research.

  2. Increased investment in national programmes should be conditioned on broader economic options analyses, along with normal assessments of life-cycle cost and market options.

  3. Bilateral agreements and industrial return schemes should be subject to a greater degree of evaluation, pitting the benefits to particular companies against the state’s costs. The processes should be open, with competition conforming to normal practice.

  4. Clearer separation is needed between space programme development support and the acquisition of specific services from public bodies, such as Radarsat and AIS. Such separation will help to clarify objectives, priorities and costs. An expanding marketplace, meanwhile, is able to meet the state’s operational requirements for data, and market options should be reviewed with regard to further investment in AIS. Procurements and support schemes should also be reviewed to make sure they accord with legal and regulatory codes.

  5. The Ministry of Trade and Industry and the Norwegian Space Centre should revise their hierarchy of goals and priorities and link it more closely to governance dialogue and organisational strategy. The system of management by objectives and results should be simplified, clarified and made relevant to the Norwegian Space Centre’s strategic plan.

  6. Transparency with regard to support schemes and awards within the ESA framework can be improved. The information is not publicly available at present, which is a problem, given that so few companies are involved.

  7. The Ministry of Trade and Industry should consider a reorganisation of corporate governance at KSAT to reduce the potential for conflict of interest.

  8. The Ministry of Trade and Industry should consider strengthening capacity and support for changing ESA’s budget process and IPSAS accounting principles.

  9. If a further scale-up of national programmes is desired, the Norwegian Space Centre ought to be strengthened.

  10. If the EU and ESA roles converge further, the Norwegian Space Centre ought to be strengthened.

The report also cites challenges stemming from major structural changes in international space activities. Political processes in the EU and the United States will affect access to decision-making arenas in Europe and market access for Norwegian enterprises. The EU’s strengthened role is highlighted as a possible challenge for Norway, especially in view of an accelerating EU-ESA convergence. Intensified activity in space by countries such as China, India and Brazil signals geopolitical changes underway. Internationally, the market is increasingly characterised by commercialisation and the emergence of new service sectors. This poses challenges to the commercialisation strategies of Norwegian companies. According to PwC, the Norwegian public support apparatus for space activity is somewhat out of step with such developments.

According to PwC, there is also room for improvement with regard to public-sector governance issues. The Ministry of Trade and Industry and the Norwegian Space Centre could be clearer in their dialogue about goals and priorities. Clarifying and operationalising objectives, the report says, would be a step towards a more robust space strategy. In addition, strategies should be developed to improve the balance between national programme development and compliance with regulations, with the goal of avoiding risky practices related to procurement and competition. The report notes a potential conflict of interest in the state’s partial ownership of Kongsberg Satellite Services (KSAT). Given the strength inherent in the company’s solid growth, it is possible that close relationships with the Norwegian Space Centre and blurred roles could contribute to a potential conflict of interest and to the exclusion of market competitors.

On the basis of its analysis, PwC also recommends improvement measures, some of them strategic and some operational. A complete and thorough assessment of PwC’s recommendations is not possible here. However, PwC’s recommendations do form some of the basis for the analyses made in Chapter 1 of this white paper.

3.4 Research in Norwegian space activity

Space activities have always been closely linked with scientific research. The technologies that have underpinned practical applications and value creation in the private and public sectors often stem from basic research at research institutions. Society’s increasing dependence on advanced electronic infrastructure has strengthened the need for knowledge about solar storms and other natural phenomena that can interfere with electronics on the ground, in aircraft and on satellites. Satellites have become an important tool for researching phenomena on the earth’s surface and in the atmosphere, including ocean currents, weather systems and ice cover. Observation of distant stars and planets helps enhance our understanding of fundamental principles of physics.

Although national user needs and business development goals have been the main factors driving Norwegian public investment in space, scientific research has influenced Norwegian space activity as well. For many years, Norway has participated in international space-related research through ESA and EU framework programmes. In addition, bilateral and multilateral agreements have been signed with a number of countries, including Japan, Germany, France, Switzerland, the United States, Sweden and Canada. The Research Council of Norway’s space research programme has contributed to national funding of space-related research for many years.

Norway has a long tradition of space-related research, particularly in fields relevant to the High North. Norwegian scientists have long played a pioneering role in aurora research; in 1899, they set up an observatory on Haldde mountain near Alta. Since 1962, Norwegian and foreign researchers have taken ​​measurements in the atmosphere and near space using sounding rockets launched from the Andøya Rocket Range (ARR). Over the years, Norwegian universities have developed advanced capabilities in fields such as solar research, cosmology and astrophysics. Largely due to its commercial interests and geographical location, Norway has long had leading research organisations active in such fields as ocean science, meteorology, polar research and climate and environmental research. Increasingly, such research relies on data from earth observation satellites. Norwegian universities, research institutes and public bodies are at the global forefront in exploiting earth observation data. Examples are the Norwegian Meteorological Institute, the Institute of Marine Research, the Norwegian Forest and Landscape Institute, the Geographical Survey of Norway, the Norwegian Institute for Air Research, the Norwegian Institute for Water Research, the Northern Research Institute (NORUT), the Norwegian Computing Centre and the Nansen Environmental and Remote Sensing Centre (NERSC).

Through ESA programmes, Norway participates in the development of satellites and space probes to observe the sun and outer space. Norwegian researchers utilise data obtained through ESA to investigate basic questions about the universe’s origin, the possibility of life on other planets and the fundamental forces of the solar system. Norway also contributes to scientific research by way of a small financial stake in the International Space Station. This gives Norwegian researchers access to the space station’s on-board laboratories. Materials technology and biological processes are Norway’s priorities in space-station research. Such knowledge is applicable to aquaculture, plant breeding and the development of new materials, among other things. The technology behind Norway’s AIS satellite was tested aboard the space station. The control centre for ESA’s space-station plant experiments is located in Trondheim. The Norwegian University of Science and Technology (NTNU) has been a pioneering environment for research into plant behaviour in weightless conditions and under varying light and radiation conditions. The University of Oslo has world-class expertise in solar research, and it houses the European data centre for Japan’s Hinode solar research satellite and for an upcoming NASA satellite called IRIS. Research conducted with data from such satellites helps us to understand the fundamental laws of physics as well as pressing matters like the sun’s effect on climate change and the phenomenon of space weather, which can disturb critical electronic systems.

Textbox 3.12 Space weather

The sun is a variable star. Space weather occurs where solar radiation and the solar wind encounter the earth’s magnetic field and atmosphere. The aurora borealis (northern lights) is a visible manifestation of this. Satellites and astronauts in orbit are more vulnerable to solar storms and space weather than people on the ground, but technical systems down below can be affected too. Space weather affects radio communications, navigational precision and radiation levels for aircraft personnel. The sun can also trigger geomagnetic storms, which can disturb power grids and increase corrosion in pipelines. Government, industry and tourism would all benefit from improved space weather forecasting. A European space weather service is under development, with participation by several Norwegian actors.

Several Norwegian educational institutions have developed centres of learning with a focus on space. Narvik University College and NTNU offer engineering programmes in space technology. The University of Stavanger has research and educational programmes related to the synergy between space activities and the oil and gas sector. Most Norwegian universities offer educational programmes involving space-related physics.

The Tromsø Centre for Remote Sensing at the University of Tromsø is a hub of important Norwegian research actors in the field of earth observation. Participants in the centre collaborate on research, technology development, services development and the establishment and operation of earth observation infrastructure.

In 2013, the Birkeland Centre for Space Science was established as a Centre of Excellence in research. Its mission is to increase knowledge of electrical current flows around the earth, particle showers from space, auroras, gamma-ray bursts and other links between the earth and space. The work will lay a foundation for improved space-weather forecasting and heightened security for satellite navigation and positioning systems, TV signals, payment systems and other satellite-based services. The centre is operated by the University of Bergen and will receive a total of some NOK 160 million from the Research Council of Norway over a 10-year period.

The Research Council funds space research primarily through its 2011–2018 Romforskning (space research) programme. It was set up to fund follow-up research exploiting Norwegian space activities within ESA, EISCAT (European Incoherent Scatter Scientific Association) and NOT (Nordic Optical Telescope) organisations. The programme follows on the heels of prior programmatic commitments to basic research in priority segments of Norwegian space research. It aims to improve fundamental knowledge of space by examining important physical processes and developing the necessary technological tools. The research programme also encompasses near space, where cosmic radiation, solar wind and other solar processes interact in the earth’s upper atmosphere.

The Centre for Earth Evolution and Dynamics (CEED) at the University of Oslo conducts research into mechanisms at work near the earth’s surface and their connection to processes deep within the earth. The centre is to be funded by the Research Council of Norway as a Centre of Excellence from 2013 through 2023.

To front page