Capitalism in space: When the European Space Agency (ESA) in May 2024 awarded two contracts to the French startup The Exploration Company and the established Italian contractor Thales-Alenia to develop unmanned capsules for bringing cargo to and from orbit, it also made a major policy change that went unnoticed at the time.
During a press briefing on 23 May [2024], following the Phase 1 awards, ESA Director General Josef Aschbacher explained that the agency would not require participants in the initiative to adhere to its geo-return policy. The policy typically ensures that contracts are distributed among ESA member states in proportion to their financial contributions. “We contract very differently because we will be the anchor customer,” said Aschbacher. “That means we buy a service. We give industry all the freedom to find the best solution technically, but also the best partners, with whomever they want to work with.”
What means is that the two companies, in developing their capsules, have not been required to spread the work out across Europe. Instead, they have been free to do the work entirely in house, or hire just the subcontractors they prefer, from anywhere. As the CEO of The Exploration Company noted, “In plain terms, we choose our suppliers based purely on quality and cost—not because they’re French, Italian, or German. We choose the best supplier for the job.”
In the past, as part of its bureaucratic and political needs, ESA’s “geo-return policy” required every space project to spread the wealth to all of the ESA’s partner nations, in amounts proportional to their financial contributions to the ESA. The result was that every project went overbudget, took too long to complete, and was unrealistically complex. Many projects simply failed because of these issues. Others took decades to get completed, for too much money. And when it came to rockets, it produced the Ariane-6, that is too expensive and cannot compete in today’s market.
This decision last year means that ESA is very slowly adopting the concept of capitalism in space, whereby it acts merely as a customer, buying products that are completely owned and controlled by the seller.
This new policy presently only applies to the development phase of these capsules. Though no decision has been made about the construction phase, involving much more money, ESA publications indicate it will apply there as well.
Though it is taking time, Europe’s space bureaucracy is beginning to accept the idea of freedom and capitalism.
