COMMERCIAL SPACE ECOSYSTEM AND TRENDS IN JAPAN: AN ANALYSIS
by Noel Therattil
The Japanese Aerospace Exploration Agency (JAXA) has contributed beyond its size in the span of its lifetime. Despite being one of the smaller space agencies of the world has made notable contributions. It is one of only six states in the world that posses full launch capability. Unlike in Europe and United States, Japan is still struggling with the commercialization of space and its few space industries are heavily depended upon government contracts. This paper will seek to explore the history of space exploration in Japan and the prospects of commercialization in a country where the space industry is valued at 1 Billion Euro as of 2015. This paper will review the policy of the Japanese government and private interests in japan with respect to commercial space exploration. Along with JAXA the Japanese government closely controls and directs the Japan Space Systems (JSS). The JSS is an organization that supplements the activity of JAXA by focusing on the e industrial and commercial aspect of space exploration. Among other organizations that the Japanese government has promoted and/or established are Institute of Space & Astronautical Science (ISAS) as a lead agency to oversee Japan’s space science programs and National Space Development Agency (NASDA) in 1969, to develop programs in the areas of remote-sensing, communications, meteorology, as well as launching and tracking of satellites.
Inception of Japanese Space Program
Only 10 years after the surrender of Japan in 1945, Japan took its first step towards conducting space activities. Its first step was to launch a Pencil rocket that was a mere 23 centimeters long. By 1962 the Kagoshima Space center was set up as a full-scale launch site[1] and it had launched its first satellite, Osumi, in 1970. The Japanese space program started as an initiative of the University of Tokyo which had established the Institute of Space and Astronautical Science (ISAS). Soon enough the Japanese government had realized the importance of a national space program and had established the National Space Development Agency (NASDA) in 1969. It didn’t however replace the ISAS. The NASDA put the Japanese space program on solid footing and eventually led to the development of launch vehicles for its satellites.
It was only in 2003 that the Japanese space program was consolidated by the creation of the Japanese Aerospace Exploration agency (JAXA) by (Law Number 161 of 13th December 2002)[2]. JAXA was the product of the merger of ISAS and NASDA and the National Aerospace Laboratory.[3] Prior to the merger the NASDA was tasked with the development of large launch vehicles and matters related to the International Space Station, the ISAS was tasked space and planetary research and the National Aerospace laboratory was tasked with development of next generation aerospace technologies.
Interagency co-operation
Despite the agencies small size it has struck numerous interagency agreements. Most notable among these international cooperation agreements is the Japanese participation in the International Space Station program. The agency has not only signed agreements with major space players such as NASA and the Russian Space Agency (formerly Roscosmos) but also with smaller players such as Vietnam, Norway, Sweden, Germany and Italy among others. Most recently it signed an agreement with Canada to promote peaceful development and exploration of outer space.[4] Japan’s oldest international space cooperation has been, unsurprisingly, with the United States. JAXA and NASA have an old relationship albeit JAXA finds itself heavily dependent on NASA for many opportunities most notably astronaut launch capability.
In Asia, Japan has sought to promote cooperation in space activities as early as 1993 where it led to the establishment of the Asia-Pacific Regional Space Agency Forum (APRSAF). The APRSAF is a forum of 69 countries, regions and organizations that seek to promote cooperation in space. In 2006 it established Sentinel-Asia. It is a forum to create an Asian disaster preparations and risk management system that seeks to reduce the human and financial costs of disasters. In 2008 it initiated the Space application for Environment (SAFE) project to monitor environmental changes occurring on the Earth and track the progression of global warming. JAXA has also actively cooperation with the United Nation Committee on Peaceful uses of Outer Space and the Committee on Earth Observation Satellite. Japan also actively cooperates with other UN organizations and committees[5]
Status of commercial space ventures in Japan
Law number 161 of 2002 which established the JAXA keeps in the mind the need for finance and commercialization of the space program. It recognizes the importance of capital and consequently allows JAXA to raise capital for its projects. Article 6 and Article 7 of Law 161 permit JAXA to manage its authorized capital and raise the same with the permission of the Japanese government. It further authorizes it to raise capital via investment bonds.[6] Despite this the agency is heavily reliant on government finance.
According to the first and only Japanese white paper on space policy, Japan has largely focused on “ acquisition of technologies, resulting in its own space transportation (rockets), discoveries in space science and acquisition of the technologies for manned space activities through the experiences in the ISS. Meteorological, communications/broadcasting and other satellites were developed based on specific users’ needs, resulting in their commercialization.”[7] In fact as of 2013 the only commercial order received by Japan was from the Republic of Korea (South Korea) for commercial satellite launch.
According to the paper boosting even private interest in the space market in Japan would require state support and finance. Incidentally one of the reasons cited for the inability of the Japanese space industry to compete with other international players was that the industry did not receive considerable support from the Japanese government in the 1990s. This lack of support was more specifically categorized as poor government demand and inadequate investment in research and development for industrial and commercial purposes. The limited experience of the few space ventures in japan has further compounded the matter. [8]
Challenges in commercialization and expansion.
Curiously despite having a considerable private entrepreneurship and industrial base in the country, the space sector still hasn’t found it worth investing in the space sector. Many reasons may be cited for the failure of the private industry from both entering the sector and generating their own demand. Some of these reasons even appear contradictory to the solutions offered by the Japanese government. On one hand it has been suggested that a reduction in the share of government demands would allow the Japanese space industry to satisfy demands from the private sector and international players; on the other hand, it has been suggested that the industry still requires government capital and finance to sustain itself. This capital would, however, come in the form of government demand. Nevertheless such a proposal when examined in detail does not appear contradictory. Projects initially will necessarily require to be initiated and led by the government. Private enterprises must consequently be involved in these projects. Hand-holding is thus required but eventually one would assume that the private sector going gain the experience to initiate private enterprises of their own.
There is also the issue of human and financial capital. According to some estimates the financial and human capital of the Japanese Space industry has actually diminished since the 1990s. From ¥ 350 Billion and 10,000 workers in 1990’s to ¥ 260 Billion and 7,000 workers in 2013 the Japanese space industry has in fact diminished. In part this may be ascribed to the stiff control over the space industry and the space market by the European Space Agencies and NASA. It is important to mention here that national space policy was laid out on the assumption that the budget for same would be ¥ 2.5 Trillion Yen for five years from both government grants and private sector funding however the actual budget allocated was ¥ 300 Billion per year. The private sector has failed to make any significant contribution
China and India have also captured a significant share of the market. India for example has significant control over space launch and maintenance services. It must be noted that the issues isn’t simply the lack of capital. The lack of capital is a microcosm of a many other issues. The space industry being a very niche sector means that not only is there low, on-order-only demand, there is also no sustainable economy of scale that exists. “Materials and components for spacecraft are still unprofitable items for the industry due to small outlet and lack of versatile applications, and many companies have ceased production. On the other hand, imported materials and components have risks of defects or unexpected suspension of production.”[9]
The Japanese space industry will also do well by trying to establish a niche in the production of system components. However one of the hindrances identified is curiously the export policy of these systems. Among other things these systems include transponders, lithium ion batteries solar cells etc. It has been suggested that rather than marketing these components together as one system, they may be marketed and exported separately to boost production and achieve an economy of scale. There is of course the question of products that do not have a general demand in the market. Such products would require the generation of artificial demand by the government, perhaps closer to home in the domestic market.
Lastly it may further be pointed out that the commercialization of space has not featured high in the Japanese space policy. Rightly or wrongly, it has been seen only as a tool for industrial development. Among the three priority subjects identified by the Japanese space policy are National security and Disaster Management, Industrial development and to Progress in frontier areas including space. Commercialization is hence one of the hopes of the Japanese space program but is not actively pursued as an objective of the space program. Nevertheless, the spill over of any advancements of scientific research would benefit the private sector but the transition of these advancements would be slow due to the lack of entrenchment of private players in the japans space endeavors.
Future of Japanese Space Program.
The basic roadmap of the Japanese Space program has seven components which are to be fulfilled by 2022.[10]
1. Development of Positioning satellites.
2. Development of Remote Sensing Satellites.
3. Communication broadcasting satellites.
4. Launching Systems
5. Space Science and Space Exploration
6. Human Space Activity
7. Space Solar System and Research and Development.
It would be beneficial for the Japanese space policy to also include within it’s the road map ‘sub-orbital flights’. Sub orbital flights have potential sui generic to orbital flights. A case in point is the potential for sub orbital space tourism. Another innovative use is the he ability to provide internet services via balloons in remote areas and/or increase the speed of internet services. An example of this is Google’s Loon Program.
JAXA is assisting private initiatives such as “launching “small or ultra-small satellites developed by the private sector and universities as ‘piggyback satellites” on an Epsilon rocket, and provides them opportunities for on-orbit demonstrations of new element technologies using these small satellites as test beds”.[11] JAXA has been slowly but steadily emulating NASA’s policy on private participation. It seeks to use the private sector’s ideas and innovation to demonstrate its technology for the removal of space debris.[12]
Japans has sought to involve the private sector to a considerable extent in the Moon and Mars missions of the future. It has sought to make it clear that it seeks to “foster business-oriented partnerships that offer mutual gains for the private sector and future space exploration”[13] Importantly JAXA has made some inroads with the private sector. Amongst these inroads is Avatar X and Tansa X. Avatar X is “is a joint project with the private sector utilizing “Avatar” remote control technologies such as virtual reality, robotics, and haptics for construction, exploration, maintenance and operation of habitation, or other remote entertainment solutions in space.”[14] Tansa X[15] (Technology Advancing Node for SpAce eXploration) has partnered with Videocon and Sony to find way to cultivate on the moon.
The Japanese space policy needs a more aggressive focus on way into partner with private players and eventually make them independent. The Japanese government has hence attempted to copy the model for private participation adopted by NASA. There is still a long way to go before the private industry sees value to investing in the space industry. It must be noted however that the industry itself has a potential beyond just orbital flight and satellite maintenance and launch. Production of systems and system parts, sub orbital flights and research and development are incentive enough to motive the private sector to invest in the c space industry.
The Japanese government will however need to provide aid and hand hold the industry for the time to come. This may be a problem if adequate funds cannot be allocated by the government. It is evident that even before the COVID-19 pandemic struck the Japanese government was struggling with financing the Japanese space program. It will need to find way to raise funds and provide incentive for funds to be raised.
For now, the Japanese space industry appears to have a focus on research in technologies that have a wide implication, from healthcare to disaster management. Despite its small size and rather inadequate funding the Japanese space program has done well for itself. In the end the space program will need to find the amount of privatization that benefits the long-term policy of the Japanese space program and not merely emulate American or European space policy on private players.
[1]ISAS | Brief History / History of Japanese Space Research Isas.jaxa.jp, available at : https://www.isas.jaxa.jp/e/japan_s_history/brief.shtml (last visited May 24, 2021)
[2] (Law Number 161 of 13th December 2002)
[3] Britannica, The Editors of Encyclopedia. “Japan Aerospace Exploration Agency”. Encyclopedia Britannica, 30 Apr. 2020, available at : https://www.britannica.com/topic/Japan-Aerospace-Exploration-Agency. (last accessed 24 May 2021.)
[4] JAXA | International Cooperation JAXA | Japan Aerospace Exploration Agency, available at: https://global.jaxa.jp/activity/int/index.html (last visited May 24, 2021)
[5] Id.,
[6] Supra note 2
[7] Strategic Headquarters for Space Policy, Basic Plan on Space Policy, 5, (JAXA) (2013)
[8] Id., at 9
[9] Id., at 10
[10] Supra note 7, appendix 3
[11] The Space Law Review: Japan Thelawreviews.co.uk, available at: https://thelawreviews.co.uk/title/the-space-law-review/japan (last visited May 25, 2021)
[12] Id.,
[13] A new commercial space Media.nature.com, available at: https://media.nature.com/full/nature-cms/uploads/ckeditor/attachments/8793/01_JAXA_UK.pdf (last visited May 25, 2021)
[14] Japanese Aerospace Exploration Agency, 34, JAXA (2021)
[15] JAXA｜Space Exploration Innovation Hub Center Ihub-tansa.jaxa.jp, available at https://www.ihub-tansa.jaxa.jp/english/ (last visited May 25, 2021)
