Interventions

Space Economy: the trillion in orbit and Italia's strategic crossroads

by Valerio Francola*

14 March 2026

4' min read

Translated by AI

Versione italiana

4' min read

Translated by AI

Versione italiana

The space economy is no longer a technological promise or futuristic suggestion, but one of the new fields of global industrial competition. In 2024, the space economy reached $613 billion, with annual growth of 7.8%, confirming it as one of the most dynamic sectors in the world economy. Over the past fifteen years, the sector has expanded almost uninterruptedly, showing rare resilience even in the face of the most turbulent cycles in the global economy.

This extraordinary change of pace has been brought about in particular by the arrival of new players in the field. While public spending remains crucial with its 135 billion dollars, led by the United States and followed by China, Japan and a Europe still penalised by the fragmentation of investment, the real driver of growth has, however, changed its skin.

Today, the engine of expansion is no longer government agencies, but the commercial component, which has come to dominate as much as 78% of the market. Terrestrial orbit has effectively turned into a full-fledged industrial ecosystem, driven by private players, digital platforms and entirely new business models.

A development trajectory that does not seem destined to slow down. Indeed, projections indicate that the sector could surpass the trillion dollar mark between 2032 and 2033, and then approach the 1.8 trillion mark by 2035. A further boost to growth will come from the ever closer integration of satellite data and artificial intelligence, which will expand the market for digital services based on information from space.

In this context, however, the real competition ground of this new economy lies in the Low Earth Orbit (LEO), where the game of large satellite constellations for global connectivity is being played out.

Today, the market is dominated by SpaceX with its Starlink network, which will have some 9,500 operational satellites and over 9 million subscribers in more than 150 countries by early 2026. Its competitive advantage derives from a highly integrated industrial model that has drastically reduced the cost of access to space.

This is a substantial difference from, for example, one of its main competitors, the Kuiper project of Amazon. The latter, in fact, despite having reached the number of over 200 satellites in orbit and aiming to have over 3,200 units by 2029, appears to be lagging behind also in light of the fact that it does not have a proprietary launch system and therefore has to resort to external launchers with significantly higher costs, estimated between 5.5 and 6 million dollars per satellite.

Faced with this strong market concentration in the hands of US operators, Europe has become aware of the risk of technological dependence in satellite communication infrastructures. Brussels now considers space a critical infrastructure for European strategic autonomy. The response is moving in two directions: the strengthening of the Eutelsat-OneWeb constellation, today with over 600 satellites, and the IRIS² project, the future European infrastructure for secure satellite communications.

Within this global scenario, Italia occupies a more prominent position than is often apparent in the public debate. Our country is among the main European players in the sector and is the third largest contributor to the European Space Agency, with around 15% of the ESA budget. The Italian space industry today counts more than 200 companies and around 7,000 employees, with a total turnover of more than 2 billion euros, testifying to a consolidated technological supply chain.

In recent years, the national ecosystem has been further strengthened, also thanks to the resources of the PNRR, with 7.3 billion euro investment by 2026 to support a supply chain made up of approximately 80% highly specialised small and medium-sized enterprises, alongside large industrial players such as Leonardo.

The symbolic project of this strategy is IRIDE, the 'constellation of constellations' developed under the PNRR and managed by the ESA together with the Italian Space Agency. The system, which should become operational by 2026, includes 34 satellites built by over seventy Italian companies and represents a strategic infrastructure for environmental monitoring, civil protection and the development of digital services based on geospatial data.

At the same time, the national regulatory framework also took an important step with the approval of Law 89 of 2025, which introduced a clearer authorisation system for space activities, although it left some critical issues in the background, particularly with regard to the resources dedicated to research and development, which are still modest when compared to the investments of the main international competitors.

However, the most delicate challenge for the Italian space industry remains of a strategic nature. Italy possesses consolidated skills in the manufacturing component of the supply chain - the construction of satellites and space infrastructures, the so-called upstream segment - but runs the risk of being less competitive in the most profitable phase of the value chain today: data processing and the development of digital services, the downstream segment, where a growing share of the sector's economic value is concentrated. In the Earth observation market, for example, value-added services based on satellite data analysis already account for over 45% of commercial revenues.

Looking ahead to the next decade, Italy's space system is therefore facing a real strategic crossroads. The new space economy is no longer just a technological frontier, but represents one of the backbone infrastructures of the global digital economy. For Italia, the strategic challenge is to choose in which segment of the value chain it really wants to compete.

*Public policy expert. Opinions expressed do not bind the institution to which they belong.