ISRO and the business of space

By Somendra Narayan

“When you’re in low earth orbit, you’re halfway to everywhere.” – Robert Heinlein

The space race of the last generation was a result of a rivalry between two world powers, the USA and USSR. Struggle between the two political identities led them from fighter jets to missile systems, and eventually to low earth orbit and beyond. These identities are now diluted. The focus seems to be shifting from fortification to function. This time around, it seems to be the reducing cost of space access that is attracting entrepreneurial nerds as well as private investors. The business of space is changing and this time around, India has its leg in the door, or its satellites in low earth orbit at any rate.

Recently, Indian Space Research Organisation (ISRO) has been in the limelight several times. Especially after successfully launching a record-breaking 104 satellites into orbit. Of these, a whopping 101 satellites are foreign commercial satellites. But this is not new. Commercialization of ISRO’s services started in 1999 with a German-Korean satellite duo hitching a ride to the low earth orbit. Two years on and the German Space Agency (DLR) needed their 92kg micro-satellite called BIRD in the orbit [i]. And Antrix Corporation, the commercial and marketing wing of ISRO, was there again with a better offer than the others. The list of ISRO’s clients today ranges from National Space Agencies like the Italian and Canadian Space Agency, to universities like the TU Delft in the Netherlands, and private companies like the German OHB or French Spot Image. So far, International customers’ satellites from 20 countries have been successfully launched by Polar Satellite Launch Vehicles (developed and operated by ISRO) during 15 of its launches [ii].

In the years since these initial launches, the primary task of Antrix Corporation has been to promote and market ISRO’s capabilities as a high-reliability, low-cost provider of space launch services. Their website states that they seek “to emerge as a globally significant space company fully utilising the strengths of Indian Space Research Organisation (ISRO) and other entities in the field of space [iii].” Although ISRO has indeed emerged in the global space exploration and research ecosystem as a key player, there is a definite lack of other Indian entities in this ‘space’. And combining insights from the experience of other industries and other countries can enable the government to spur growth in several other fields, not just space.

Although, this begins with an understanding of ISRO’s past strategy and current challenges. ISRO’s achievements are more than a symbol of national pride and a source of political capital for the Prime Minister. They are evidence of the success of ISRO’s long range planning. The SatCom Policy (SCP 1999) and Remote Sensing Data Policy (RSDP 2001) set the current direction of space research in India. We were, and still to a large extent are, a farming nation. Mapping land, surveying crops and communication in remote areas were our priorities rather than putting tourists in space. And realistically so. The goal was to slowly build up satellite development and launch capabilities. And judging by the recent sequence of events, things seem to be on track. Using predictive as well as preventive measures, space relatedISRO satellites have repeatedly saved lives during cyclones in states such as Odisha [iv] or Tamil Nadu [v]. This may not be enough in the future, though.

ISRO is now facing serious competition from non-state actors. Large space-related start-ups have taken ground in the last two decades. Similar to the recent growth challenges in the Indian IT services sector [vi], a gain in market share in the space sector based on low cost is not likely to be of long term benefit. Private companies in the US, like SpaceX have successfully tested reusable rocket technology [vii]. Once private competition makes this cheap and readily available in the west, ISRO’s offerings may not be as attractive anymore. While Elon Musk’s SpaceX is the more well-known of these new space companies, the competition includes many smaller and newer companies across the world. Those like the 75 engineer-strong Dutch space solutions provider ISI Space or like Made in Space-the American company that makes 3D printers for space.Several US companies and lobbyists in Washington DC are actively working on framing of rules that will prevent American satellites from being launched by ISRO [viii].

In a world, where the direction of technological research is determined by competitive advantage for private enterprise, a sure way to keep innovating is to let students and entrepreneurs mingle with a healthy side of fast access venture capital funds. The funds though, seem to follow innovation [ix]. An apt example is ISI Space, a spin-off from the Delft University of Technology, is now a leading space systems provider in the low cost market. In fact, their subsidiary, Innovative Space Launch (ISL) managed the deployment of all 101 foreign commercial satellites from ISRO’s PSLV rocket during the February Launch.

Payload description on ISRO’s 15^th February launch (Source: isispace.nl)

If India makes the decision to open the space industry for private Indian players, it could be the students from our universities who play a key role in international CANSAT competitions and launch coke-can sized real satellites to real space.Axiom Research Labs’ Team Indus [x], a Bangalore-based space startup that brings together retired ISRO scientists, as well as young entrepreneurs, wishes to be the first private Indian company to land a craft on the moon.The young Indian scientific community has the technical knowledge to create space-based start-ups. A truly home-grown achievement on ISRO’s part would be a future where that CANSAT team of students turns into a small but high tech firm and manages a genuinely indigenous deployment of ISRO payload.It is not a question of capability, but of regulation.

One doesn’t have to be an industry expert to see how it is not logical for an airline (think Air India) to manufacture aircraft engines and design its own airplanes besides to operating the routes. In the early days of aviation in the US, when Boing owned United Airlines, they did all of that [xi]. Regulatory changes in the US in 1934 shaped the airline ecosystem that we recognize. Despite still being a high investment industry, disintegration of the value chain made it possible for several companies to simply buy airplanes and operate them. In 1934, Boing also split up into Boing Airplane Company and United Airlines. A third company, the child of this divorce, if you will, was what is now called United Technologies. Besides aerospace, they specialize in elevator technology and own the leading brand Otis. They are now everywhere, from the Eiffel tower to probably your office building [xii].

Much credit for ISRO’s success has been given to its autonomy. Although, ISRO has a relatively unbureaucratic command structure with the Prime Minister himself heading the Ministry of Space, it is immensely tough to keep up with the technological changes in any large organization. Research at the National Institute of Advanced Studies, Bangalore [xiii] has suggested that all other major players in the space industry are gearing up for a major shift in the dynamics of the industry. The US is drawing up a long term plan with high focus on shifting space related activities to the private sector. Japan is looking to the space industry as a source of technological growth and competitiveness. The review of the future of Indian space policy conducted under the leadership of Mukund Kadursrinivas Rao of the NIAS, has also pointed to the importance of developing the Indian private sector capability in the space technology.

In their review, Rao and colleagues find that while most of the space incumbents are rapidly privatizing, the Chinese Space Plan is silent on this aspect. While Dr Rao suggested in 2014 that the Chinese focus is on building their state space program’s capability, a quick look at the upcoming players in the industry in 2017 tells otherwise. For instance, OneSpace is a Beijing based start-up that plans to launch its first low cost carrier rocket in 2018. A key investor in OneSpace is Legend Holdings, which is the parent company of Lenovo. Like other strategic areas, China has also opened up the space industry to entrepreneurs and private investors. The key to this decision lies in the idea that the state-owned Chinese National Space Administration by itself cannot achieve the growth that a network of specialized firms may be able to. While most of the Chinese space start-ups are at least partly owned by the Chinese National Space Agency, this technocratic autonomy to what are essentially R&D units reveals their plan to take advantage of the technology spillover.

Let’s explore the Chinese example further. Over the last two decades, as Silicon Valley grew, it strengthened the idea that the future of high-tech is in software. In business-to-business solutions, that allow your airline to make sure you have a seat when you get to the airport (sometimes by efficiently overbooking flights). Or in apps that utilize the supercomputers that we obliviously carry around in our pockets. During these years, Shenzhen in Southern China quietly grew to become the ‘factory of the world’. Moore’s law proclaims that the number of transistors that can fit on a piece of silicon is likely to double each year. This is what made manufacturing a low-value part of the process. In comparison, the value to be gained by new ideas for application of this computing power was much greater. This is what took manufacturing away from the primary consumers, the west. Although this has brought prosperity to China, which India seeks to imitate by Make-in-India. Soon, 3D printing may bust this bubble.Open source software and hardware is making it extremely easy to rapidly go from prototyping to sales [xiv]. It is expected that cheap 3D printers are likely to impact the Chinese manufacturing economy substantially. The companies in China are reacting by investing in innovation labs that innovate based essentially on trial-and-error and get a quick prototypes made three streets down.

What does this mean for something like ‘Make-in-India’? It seems that it is the same Moore’s law that has got us here, gives hope for creativity and innovation in India. Integrated circuits today are bizarrely small even for the standards of 20 years ago. Now, suddenly, even the smaller objects of daily use can have built-in computers. While a few years ago, it would have been inconceivable to talk to a wireless speaker and tell him/her to switch the lights off in another room and also tell you what the score is. Today this is just another product on the internet. Internet of things is expected to be a $470 billion industry by 2020 [xv]. And it needs a replacement for the increasingly overcrowded Silicon Valley.

In Europe, an innovator developing something like a spoon stabilizer for Parkinson’s patients needs to wait several weeks and sometimes months, before a specialist part can be ordered, made and delivered.  Currently Shenzhen provides an ecosystem with a three day wait.

Can technological spillover from a proper indigenous space ecosystem mean that Mumbai has it ready to test in two days?

For reference:

[i]                       Technical University of Berlin. TUBSAT Program. TUBSAT – EoPortal Directory – Satellite Missions. N.p., n.d. Web. 12 Apr. 2017.

[ii]               “ISRO Crosses 50 International Customer Satellite Launch Mark.” ISRO. N.p., n.d. Web. 15 Apr. 2017.

^[iii]                     Antrix Corporation Limited. “Vision Statement.” Vision Statement. N.p., n.d. Web. 12 Apr. 2017.

[iv]              “‘Isro Reduced Odisha Cyclone Casualties’.” Deccan Herald. N.p., n.d. Web. 15 Apr. 2017.

[v]               Laxman, Srinivas. “Cyclone Vardah: ISRO Satellites Saved 10,000 Lives in Tamil Nadu – Times of India.” The Times of India. India, 17 Dec. 2016. Web. 15 Apr. 2017.

[vi]                     Alawadhi, Jochelle Mendonca & Neha. “Indian IT Industry Needs to Rethink Business Strategy after Immigration Curb in US, UK & Singapore.” The Economic Times. Economic Times, 05 Apr. 2017. Web. 12 Apr. 2017.

^[vii]                    Leu, Chelsea. “Watch SpaceX Launch Its First Truly Reusable Rocket.” Wired. Conde Nast, 30 Mar. 2017. Web. 12 Apr. 2017.

[viii]             Pti. “US Private Space Cos Opposed to Using ISRO Rockets to Launch American Satellites.”The Wire. N.p., 21 Apr. 2016. Web. 15 Apr. 2017.

[ix]                     Groh, Alexander Peter, and Johannes Wallmeroth. “Determinants of venture capital investments in emerging markets.” Emerging Markets Review 29 (2016): 104-132.

[x]               D’Monte, Leslie. “Meet TeamIndus, India’s Moonwalkers.” Http://www.livemint.com/. Livemint, 22 Sept. 2016. Web. 15 Apr. 2017.

[xi]                     Lombardi, Mike. “Historical Perspectives: Emerging Stronger.” Blog post. Boeing History. N.p., Sept. 2009. Web. 13 Apr. 2017.

[xii]                    Quirk, Vanessa. “A Brief, Interesting History of the Otis Elevator Company.” ArchDaily. N.p., 02 Apr. 2013. Web. 12 Apr. 2017.

[xiii]                   Rao, Mukund, K. R. Murthi, and V. S. Ramamurthy. “Future Indian Space–Renewing Policy dimensions.” (2014): 1-17.

[xiv]             Thompson, Clive. “Build It. Share It. Profit. Can Open Source Hardware Work?” Wired. Conde Nast, 20 Oct. 2008. Web. 15 Apr. 2017.

[xv]                    Columbus, Louis. “Roundup Of Internet Of Things Forecasts And Market Estimates, 2016.”Forbes. Forbes Magazine, 27 Nov. 2016. Web. 12 Apr. 2017.