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New Space: a Franco-German… Ambition?

The Perspectives of Arthur Sauzay and Sebastian Straube

New Space: a Franco-German… Ambition?
 Arthur Sauzay
Counsel, Allen & Overy
 Sebastian Straube
Founder and CEO of Interstellar Ventures

New Space: harder, better, faster, cheaper? From disruptive new players to accelerating innovation dynamics provoking drastic drops in spatial costs, what is really happening in the space sector? How does this new reality affect traditional players? Above all, what role should good old State actors play in this new context? In order to reflect on these fundamental questions, Institut Montaigne and the German Embassy in France organized on February 21 an ambitious event gathering the space sector’s key players. The attendees were high representatives of key agencies and private companies: The European space agency (ESA), the German Aerospace Center (DLR), the NASA, the French National Centre for Space Studies (CNES) and the Japan Aerospace Exploration Agency (JAXA), Airbus Group, Interstellar Ventures or Thrustme. Our Director Laurent Bigorgne, Thomas Jarzombek (Member of the Bundestag and Federal Government Coordinator of German Aerospace Policy), Bernard Larrouturou (General Director for Research and Innovation, French Ministry of Higher Education Research and Innovation), German Ambassador to France Nikolaus Meyer-Landrut and Johann-Dietrich Wörner (Director General of ESA) introduced the event.

Who better than a French expert and a German entrepreneur and investor to discuss the challenges this "New Space" reality raises for two leading countries like France and Germany? Institut Montaigne’s expert on space policy Arthur Sauzay and Sebastian Straube, founder and CEO of Interstellar Ventures, discuss their respective views in this Franco-German conversation.

What is the current role of the Franco-German relationship in the European space strategy, and to what extent can such an event be relevant in strengthening the latter’s ambition?

Sebastian Straube
First of all, let us start by reminding ourselves that Germany and France have by far the biggest spatial industries in Europe and do invest significantly in the space sector. These two countries are thus undoubtedly two leading actors within the European space sector. Similarly, France and Germany are the two largest contributors to the ESA budget. Beyond these figures, France and Germany share another common specificity: both countries can rely on a very strong research and development landscape, from universities to clusters. I am of course thinking of Toulouse, which is a very strong space cluster gathering research institutes, universities and research and development centers.

Let us start by reminding ourselves that Germany and France have by far the biggest spatial industries in Europe and do invest significantly in the space sector.

Likewise, the South and North of Germany, especially around Munich and Bremen, offer comparable research and development institutes. Moreover, Berlin and Paris now have very strong entrepreneurial deep tech ecosystems and many non-space industry innovation centres and labs focused on open innovation and entrepreneurship. Combining all those resources would stimulate New Space-related activities in France and Germany. Last but not least, France and Germany can pride themselves on attracting the highest number of students and engineers in these fields. This is an indubitable strength for the future development of the industry as a whole.

To sum up: we have the institutions, we have the people, we have the talents, now our goal is to work closer together and to define joint innovative projects. Let us not forget that our two countries are already collaborating - Airbus Group is a telling example of this collaboration. I am thus convinced that Germany and France have a very strong role to play, both in terms of industry and in terms of research, development, innovation and entrepreneurship. Furthermore, we should not underestimate the fact that a lot of important French and German non-space companies (for instance Renault, Alstom, Siemens, Deutsche Bahn, Daimler) may benefit from joint initiatives in the space sector.
Arthur Sauzay
Sebastian is definitely right about the Franco-German reality described by the figures he cited. French and German GDP put together amount to almost half of the Eurozone GDP. From a mathematical perspective, it clearly makes sense to begin with a Franco-German initiative to address this new reality in the space business. But ultimately, the argument is of course also symbolic. As history shows, new initiatives require Germany and France collaboration in many European sectors. The arguments are thus both economic and political, and this dual approach is the compelling justification for organizing such a Franco-German event.
Nevertheless, and I would like to emphasize this point, even if a new European initiative in space could be launched at a Franco-German level, there is no willingness to be exclusive, quite the contrary. The pooling of forces should be very open to business sectors and other governments that would like to get involved.

What do you think were the most important topics discussed during this event?

Sebastian Straube
In my view, and it might be because I’m speaking as an entrepreneur and investor, financial support is a crucial issue, as, by definition, it enables the growth of an industry. Generally speaking, there is a need for new types of financing and support schemes in order to deeply leverage the opportunities unlocked by the New Space dynamic. I’m also thinking about the new kinds of private-public (not the other way round) partnerships that must be invented. The question is: how can different factors gather to support the growth of small companies or startups in the sector? And how can we enable European Space Entrepreneurs to be highly innovative and competitive in a global playing field?

But there remains an unresolved question: how can the traditional space industry be supported and financed in this new context? The established industry is, to a large degree, still dependent on public funds and quite influential when it comes to public funding and support decisions. On the other hand, you have this new startup community, which is somehow still excluded from conversations around public funding. All this needs to be clarified.
Arthur Sauzay
In my view, three key points have emerged from the discussions.

  • First, no one really agrees on the definition of "New Space", and it is true that it is difficult to fully embrace all the ongoing changes that relate to it. I did not see differences between German and French stakeholders on this topic, but rather different approaches depending on the nature of stakeholders: Agencies, large companies, start-ups, etc.
  • Second, national space agencies are facing difficulties in defining their missions. Peter B. de Selding had the good idea of asking agencies representatives to summarize their institution’s current strategy and mission. Interestingly, all the answers were different and none were very synthetic! We heard a lot of keywords like "innovation", "industry competitiveness", "employment", etc. This shows that the role of the space sector’s various stakeholders is changing, and all must reflect on the nature of their mission in the coming years.
  • Finally, the relationship between the public and the private sectors is changing and especially so in Europe. Interaction, cooperation or competition? I believe every space player, and space agencies in particular, should be acutely redesigning their mission. Should they directly support companies and take shareholdings in these companies’ capital? For the time being, things are still quite unclear, but one thing is certain: there is room for proposals on this matter. One key aspect for me is the fact that Europe has not yet taken full advantage of the NASA’s achievements in terms of public-private partnerships in the past 12 years.

As French and German people who have a forward-looking take on the current situation, what do you think are the strengths and weaknesses of the Franco-German cooperation on space?

Sebastian Straube
For the moment, I think that unalignment and mistrust are the main weaknesses of the Franco-German relationship. At the level of President Macron and Chancellor Merkel, there is a lot of hope and support. However, we should acknowledge the fact that the relationship between CNES and DLR - even though they are jointly working on multiple ambitious projects - is not as enthusiastic as it could be. Different roadblocks are disorienting this cooperation. Ariane 6 is one of them, but there are also questions related to key positions within European institutions. The fact is that the two countries are not perfectly aligned for the moment, and we must thus find ways to overcome these obstacles and engage in new projects.
However, there are also a lot of reasons to be optimistic about the Franco-German relationship, especially when it comes to business partnerships. Entrepreneurs from the two countries have very healthy business relationships, the ecosystems on both sides are complementary and accelerating very significantly. And the good news is, this reality is not only Franco-German, it also applies to other European countries. Indeed, we have growing European deep tech and corporate innovation ecosystems, which should be part of joint Franco-German initiatives and projects.
Arthur Sauzay

I agree with Sebastian on the fact that we need to build more trust between France and Germany. Some French decision-makers tend to think that Germany is not willing to invest sufficiently in space. At the same time, it is also completely understandable for Germany to cautiously monitor its investments and to request a bigger role in the decision-making process.

On the positive side, the potential of the Franco-German cooperation is extremely important. We should focus on unlocking this potential. As Sebastian said, including new players (such as startups but also "non-space" organizations and companies) can be key driver to energize the French and German partnership in space.

Including new players (such as startups but also "non-space" organizations and companies) can be key driver to energize the French and German partnership in space.

I would add a final point: we need high-level political leaders from both France and Germany to be more involved! Personally, I think that a joint speech by President Macron and Chancellor Merkel announcing common goals regarding space would be a strong signal for all stakeholders, from startups to large companies, to students and more generally to European citizens. 

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