Keywords

1 Introduction

On October 25, 2023, the private Spanish company PLD Space launched Europe’s first fully private and reusable rocket. The launch has put Spain in the exclusive club of less than a dozen countries that can send objects into space and shows the dynamism of the Spanish space sector. PLD Space is not an isolated case; an increasing number of space start-ups and initiatives have recently emerged in Spain to develop cheaper space systems and new commercial opportunities. Although the United States (U.S.) was home to about two-thirds of worldwide space investors in 2019, 12% of the non-U.S. investments are based in Spain after Japan, the UK, Israel, and Canada (De Concini & Toth, 2019). As has happened in these countries, the new entrants have brought about a structural transformation of the Spanish space sector. Consequently, public agencies are adapting to the new scenario to reinforce the industry's competitiveness (Espacio Magazine, 2015).

Since the mid-seventies, the Spanish space industry has developed, fostered by public initiatives and contracts (Plataforma Aeroespacial Española, 2020) and participation in European Space Agency (ESA) international collaborative projects. Further, as a dual technology, the Spanish Ministry of Defence has also supported the space industry through national projects and international collaborations (Fiott, 2023). This public commitment has been reinforced by the 2019 National Aerospace Security Strategy and the 2021 National Security Strategy, which define Space as a technological and strategic priority. At the same time, a focus on the commercial success of new companies has altered how traditional space companies operate, based on high technological complexity and long development cycles to ensure reliability and performance (Mazzucato & Robinson, 2018), with public administration and governments as main clients.

Despite the increasing interest of private investors and specialised media in the Spanish space sector, academic research has been nearly non-existent. This chapter contributes in this respect. In particular, it analyses the role of the institutional context in the recent evolution of the Spanish space sector. We analyse the conditions that influence the market structure, the promotion of entrepreneurship, and the emergence of partnering relationships among different stakeholders.

We show that the Spanish market’s characteristics and the institutional environment have created a bidirectional relationship between “New Space” and “Old Space”. On the one hand, the leading incumbent firms have developed corporate entrepreneurship capabilities over the years (Covin & Slevin, 1991). This has allowed them to identify ways to participate in the “New Space” revolution, developing new technologies, products, and business collaborations. On the other hand, the evolution of new businesses has been influenced by the traditional triad of university-industry-government relationships (Etzkowitz & Leydesdorff, 2000) and the experience and know-how developed by “Old Space” companies. Further, by cooperating with them, new firms gained resources that would otherwise have been difficult to acquire due to small size and limited resources (a similar pattern has been evidenced in the IT sector [Ojala, 2016]).

This chapter explores the conditions giving rise to increasing ventures and start-up “New Space” initiatives in Spain, particularly relationships with incumbent firms to establish mutual influence and symbiosis. In this respect, we begin by introducing the theoretical framework to demonstrate that institutional settings affect established firms and can facilitate the formation of innovative new companies. Next, the methodology adopted is described in some detail, along with the sources and data examined. We then report the analysis results, followed by a discussion of the evidence found. The last section concludes with implications for policy and practitioners, our research's limitations, and future research directions.

2 Theoretical Background

The institutional environment and its impact on industry dynamics and entrepreneurship have received increased attention (Valdez & Richardson, 2013). Research has examined both the influence of formal and informal institutions, as defined by North (1990). Greif (2006, p. 424) claims that different informal institutional norms may require a diverse formal institutional setting to sustain economic growth and entrepreneurship. Accordingly, some interventions may produce little venturing activity, and many created ventures either do not grow or may displace incumbent firms (Colombelli et al., 2016). Similarly, Davis and Williamson (2016) conclude that formal rules to promote entrepreneurship may only meet with success if local conditions are considered. Put differently, the interaction of formal and informal institutions can enhance or inhibit entrepreneurship to exploit new business opportunities (Lamine et al., 2021).

Existing firms can capitalise on new opportunities as well. This ability to identify new approaches is often called corporate entrepreneurship (Teng, 2007). Traditionally, the space sector has been dominated by large companies affiliated with the defence and aerospace industries, closely linked with public agencies, and reliant on government procurement (OECD, 2022). These firms have also enjoyed public R&D support to develop new projects and products. In contrast, “New Space” actors, big and small, brought funding and innovation strategies from other industries with them (OECD, 2023). Although many of the former are concentrated in the upstream sector and most of the latter blossom in the downstream industry, complementarities and synergies may emerge, creating a new ecosystem (Jacobides et al., 2018). This perspective enriches the analysis by considering the complex, coevolving nature of the actors, conditions, and entrepreneurial initiatives in any given entrepreneurial context (Carter & Pezeshkan, 2023).

The role of universities, together with governments and businesses (the “triple helix”), is considered to be an essential driver of knowledge-based economies and societies (Etzkowitz & Leydesdorff, 2000). It implies that it is necessary to have a relevant critical mass of industry to absorb university research outputs and thus foster growth (Youtie & Shapira, 2008). It suggests that technology transfer is a complex and iterative activity involving multiple stakeholders and expanding to the community (“four-helix model”) (Rinaldi et al., 2018). New instruments, such as the technology transfer offices, have been developed to foster innovation and economic progress (D’Este & Perkmann, 2011). The interplay between institutions and actors can be even more relevant for entrepreneurship and developing innovative sectors, as is the case of the space industry.

3 Methods

We employ case study methodology to analyse the evolution of the Spanish space sector. Case study relies on a research strategy of multiple data collection methods to study a phenomenon in its real-life context (Yin, 2009). That is, the detailed empirical information collected over a period allows us to analyse the context and processes involved in it. Case study research offers benefits in terms of process and outcome. The case study will help to focus the research within the confines of space and time. Further, the different kinds of data, such as interviews, documents, observations, surveys, and others, allow an in-depth look at the interactions taking place to deliver a comprehensive understanding of the phenomenon analysed, which can also be applied to gain comprehension of other situations (Schoch, 2019). In addition, it is one of the most extensively used strategies of qualitative social research, and its application has been expanded (Priya, 2021).

Although Yin (2018) claims that case studies can help explain diverse phenomena, case studies have been traditionally used for exploratory and descriptive purposes, especially in scarcely researched topics. This makes them suitable for analysing the impact of institutions on the emergence of entrepreneurship in the Spanish space industry and the bidirectional relationships between “New Space” and “Old Space” that have formed a new ecosystem.

3.1 Data

We use multiple sources of secondary data: information from institutional sources (international and national), companies’ web pages, and media articles. In addition, we collect data from speeches and round tables with various commercial experts, established firms’ and start-ups’ executives and government officials at two specialised summits called “New Space España” held in Vigo (Galicia) in 2018 and 2022. The summits’ debates and speeches detail the recent industry evolution and dynamics and signal new players in the traditionally government-linked space sector. The participation of incumbent firm representatives shows the interest of “Old Space” companies and allows us to ascertain their strategies towards new technologies and entrants.

To analyse the content of the summits, we follow a four-step process inspired by Lotzkar and Bottorff (2001), who conducted a systematic thematic analysis of videotaped data. While thematic analysis may not be as established as other qualitative approaches like discourse analysis (Brennan & Vecchi, 2023), it proves more suitable when the goal is to identify patterns within the data (Nowell et al., 2017). While it doesn’t explore the relationships between language and power as discourse analysis does, thematic analysis is highly effective in summarising critical features of large datasets. This method encourages a well-structured approach to data handling, facilitating the production of a clear and organised final report (King, 2004).

As our research question is to analyse recurrent themes across the data, we consider thematic analysis more appropriate. We proceeded in four steps. First, we reviewed the videotaped summits to identify and describe themes of interest for incumbents and new firms. Second, we reviewed the recordings and notes to determine how and when different themes emerge. Third, we described differences between themes and actors to understand the distinct opinions. Finally, we constructed a detailed theme description, including the observed interactions’ conditions, causes or functions, and consequences. The data analysis is completed with information from other secondary sources. Table 2 in the appendix lists the sources used.

4 Findings

In the process of analysing the data, numerous topics emerged. We organised related topics into distinct theme categories. It is important to note that these first categories were provisional, and as new data was scrutinised, we revised the themes. During this stage, we assessed whether additional information genuinely supported the theme and fit into the context of the data collected. Additionally, we examined the coherence and distinctiveness of each theme to establish clear relationships between themes and sub-themes. As a result of the iterative process, five main themes emerged, namely, legacy and opportunity, institutional support and demand, relationships with universities and research centres, investors and financing, and collaboration between different actors.

4.1 Legacy and Opportunity

The Spanish space sector boasts a rich historical legacy. The Instituto Nacional de Técnica Aeroespacial (INTA) was founded in 1942, focusing primarily on aeronautical research. From its inception, INTA embraced international collaborations. During the 1960s, diverse cooperation agreements were signed with NASA to establish tracking stations in Spain to support NASA missions. Consequently, in 1963, the National Space Research Commission (Comisión Nacional de Investigación del Espacio, CONIE) was established to engage in space research and foster enduring partnerships with NASA and other international institutions such as the German Max Planck Institute and the French National Space Studies Centre (CNES). In essence, CONIE has been regarded as the inaugural national long-term space strategy. Along with its collaboration with NASA, Spain became a member of the European Space Research Organization (ESRO), the precursor to the current European Space Agency (ESA). These international collaborations enriched the expertise of the Spanish space sector. By 1970, all NASA monitoring stations came under the management of Spanish personnel. In addition, two survey rockets, INTA 255 and INTA 200 (developed in collaboration with Bristol Aerojet LTD), were launched, and the first fully developed Spanish satellite, INTASAT, appeared in 1974. In 1975, Spain was among the members approving the establishment of ESA (Dorado et al., 2002).

The dual nature of the space sector has played a pivotal role in its advancement. The Spanish government's interest in fostering defence-related technological and industrial capabilities, particularly after the dictatorship, was based on the anticipation that the military demand would drive the development of Spain's high-technology industries, particularly in electronics and aerospace (Molas Gallart, 1998). Notably, INTA is affiliated with the Ministry of Defence, leading to occasional convergence between national space and defence plans.

These sustained efforts at both national and multinational levels have yielded noteworthy outcomes for the Spanish space industry. Firstly, there has been a substantial enhancement in scientific knowledge and expertise, enabling scientific institutions and groups to participate in and lead ESA and European research projects actively. The industry has undergone modernisation, giving rise to internationally competitive companies that have absorbed this knowledge and can now develop products and services that contribute to the nation's prosperity in previously unexplored areas. Consequently, professionals in the industry have elevated their training and expertise to the most advanced technical levels (TEDAE, 2019).

Secondly, Spain is a member of significant space organisations, European (EUMETSAT) and international (International COSPAS-SARSAT Programme and COSPAR). These memberships indicate the presence of a substantial critical mass in Spain's space sector that would only have emerged with Spain's ESA participation (Dorado et al., 2002). In this context, the “New Space revolution” is perceived by “Old Space” companies as an opportunity to leverage accumulated expertise and resources to enhance the competitiveness and position of the Spanish space sector in the global market. This involves embracing new ideas while drawing valuable lessons from recent experiences.

4.2 Institutional Support and Demand

Traditional development costs of space technologies were massive and could only be supported by national governments (Bousedra, 2023) and, in many cases, in cooperation with other countries. Therefore, space activities have been shaped by at least two different factors: on the one hand, the type of international relations that the individual countries engage in, for instance, membership in international organisations or cooperation agreements; on the other, the economic, financial, and technological resources available in the economy. In this setting, national security concerns and defence projects have played a determining role in defining state demand. One interesting feature is that this governmental demand, apart from acting as a pull mechanism, has evolved independently of market constraints. For instance, economic considerations, such as cost reductions derived from the introduction of new technologies, were not the main issue in project development (Mowery, 2010) and have not affected the relationships between governments and companies. Hence, the space industry is a complex group of stakeholders, including different governmental ministries (defence, foreign affairs, research and innovation, and education) and the companies that design and produce the systems (Petroni et al., 2009). One common feature of nearly all countries that carry out space activities is establishing a national public agency responsible for managing the sector and its variety of stakeholders and guiding the choices and the development of the national strategy (Cucit et al., 2004). Yet, Spain, despite its active presence in the space sector, did not have a national space agency or a national space strategy (except for the CONIE antecedent explained previously) until very recently.

The establishment of the Technological and Industrial Development Centre (CDTI) within the Ministry of Industry and Energy in 1986 was geared towards enhancing support to leverage technological capabilities in the space sector (and other industries). CDTI granted financial and consulting support. However, coordination with different governing bodies: the Ministry of Science, the Ministry of Defence, and, at the very least, the Ministry of Foreign Affairs was crucial for two reasons. Firstly, as space stakeholders, all these entities are interested in contributing to the national space strategy. Secondly, the sector's key pillars have been national and international programmes. For instance, Hisdesat, the government satellite operator for defence, security, intelligence, and foreign affairs, exerted significant influence (TEDAE, 2019). International collaborations such as ESA programmes, European Union space initiatives, and cooperation with NASA, CNES, or Roscosmos have also played a vital role in the industry's development. Since 2008, CDTI has operated under the Ministry of Science and Technology to improve coordination between scientific and supportive endeavours. One notable outcome of this particular institutional framework is that the state demand for space-related activities in Spain has not been as extensive as observed in other countries and has conditioned (as we will explain below) the development of the “Old Space” sector.

Establishing a national agency to centralise the action of the diverse institutions and formulating a long-term national strategy for Spanish space has been a long demand from industry and business organisations (Plataforma Aeroespacial Española, 2020). In 2019 TEDAE and the Plataforma Aeroespacial Española (Spanish Aerospace Platform) released their own agenda and strategy to signal the need to establish a common and shared long-term industry vision. The Spanish Space Agency was set up in April 2023. The Space Council, launched a year before to define the Agency's duties and objectives, was composed of the Presidential Cabinet, 11 ministries, and the National Intelligence Center, indicating the necessity of a central institution.

Without a single agency, the development of national space plans had not evolved smoothly, depriving the sector of the necessary continuous investment effort. This can explain the discontinuity of some projects (even abandonment because of lack of funds), especially in the seventies and eighties (Dorado et al., 2002).

Since 2018, Spain has been participating in all ESA Space projects (TEDAE, 2019). It forms part of other international consortia, which suggests that institutional demand has allowed Spanish companies to transform from mere equipment suppliers to integrate complete systems and be capable of leading multinational missions.Footnote 1 Despite the positive effects of public support, diverse managers from “Old Space” companies opine that the lack of public investment continuity and ambition has hindered industrial development, which has been less rapid than in other countries.

As elsewhere, the emergence of Spanish “New Space” companies means that the expansion of the space sector no longer depends solely on state-driven demand but is progressively influenced by market demand for space-based services. Conversely, increasing market demand is necessary for the commercial success of these new entrants. Despite these shifting dynamics of public and private sector involvement (Tucker & Alewine, 2023), the market for space-based services is still in its infancy. To fill this void, the Spanish government is designing different initiatives and policies to support the newcomers. For instance, through government calls to develop technological collaborations and public–private partnerships (PPP) on space-based applications. Another outstanding initiative, the Innovative Public Procurement Plan, is related to these PPPs. The plan aims to modernise the public administration to improve public services and, simultaneously, show the market the strength and possibilities of new space-driven products and services.

4.3 Relationships with University and Research Centres

The Spanish university system has experienced a remarkable evolution in the last fifty years. The number of university centres and students has significantly increased in these decades. In addition, the different scientific and research programmes developed by the government have permitted the Spanish scientific community to improve its technological and scientific knowledge, participate in international research networks successfully, and cooperate with industry.

Spain boasts a higher education attainment rate (39.4%), surpassing the European average of 30.5%. However, the distribution of graduates varies significantly across fields of study. Popular areas include business, administration, and law (19%), and education (17%). In contrast, fields such as information and communication technology (3.9%), mathematics and statistics (0.5%), and manufacturing and processing (0.8%) attract fewer graduates (Cedefop, 2016). This shortage may be related to the persistent gender gap in STEM enrolment.

From 2018 to 2020, women overwhelmingly favoured non-STEM fields, with 78% and 72% enrolling in education and health, respectively. Within STEM, Usart et al. (2022) show that the gender disparity is more pronounced, particularly in technology-related studies (13% women compared to 87% men) and engineering (29% women and 71% men).

Public institutions and business organisations are aware of the need to reduce the shortage of qualified workers to meet the challenges of the knowledge economy. Action has been proposed in two interconnected areas. Firstly, there is a call to increase the enrolment of women in technological subjects. Secondly, closer collaboration between universities and businesses is promoted by aligning education programmes more effectively and offering on-the-job traineeships. In addition, many universities have incorporated entrepreneurial activities and formal courses in their academic curricula to encourage entrepreneurship among students.

In this respect, a vibrant network of technological and science parks associated with universities, more than 50 nowadays, has emerged to enhance the connection between universities, businesses, and society. This network has also strengthened the relationships between academia and industry, with many scientific parks serving as incubators for student-generated business proposals.

The relationships between universities and research centres, and industry in the space sector have always been close. Firms like Alen Space or DasPhotonics originated in research groups. However, the shortage of STEM and technological graduates can lead to future industry challenges. As the demand for space-based applications grows, one potential challenge will be commanding the resources and technology for satellite mass production, that is, to manufacture regularly.

Spain has recently committed to addressing this gap by participating in two European projects: the educational ESA project, ESERO, and Women in Aerospace (WIA-Europe). These initiatives encourage science and engineering careers in space and promote female talent and leadership, respectively. Spain's participation in these projects signifies a commitment to foster greater interest and participation in STEM and space-related fields. However, it also reveals a noteworthy delay in joining such initiatives. Granada Science Park, representing ESERO in Spain, was commissioned only in 2017, while ESA educational activities started in The Netherlands as early as 2005. This tardiness underscores the urgency to promote vocations in the space sector.

The Spanish participation in the Copernicus project, the observation component of the European Union’s Space programme, has allowed the Spanish inclusion in the Copernicus Academy, which connects universities, research institutions, business schools, and private and non-profit organisations. The main goal is to facilitate collaborative research and improve educational and training material to empower the next generation of researchers, scientists, and entrepreneurs. Spain has more than 25 universities and research centres collaborating with this initiative. Further, in Madrid and Barcelona, two ESA Business Incubation Centers (BIC) were established in 2015 and 2017, respectively, as part of the ESA BIC Network, which started in 2003 and is currently in nine countries. In November 2023, there are three other active BICs in Leon, Castellón, and Sevilla. It is expected that all these public initiatives will have a positive impact on talent attraction to the space sector.

4.4 Financing

The dual nature of space activities has allowed for diverse sources of financing, both civil and military. In the case of civilian applications, the national budget allocated to space programmes has lacked continuous commitment, as mentioned earlier. Notably, Spain's contribution to ESA nearly doubled in the 2000s, aligning with the decision to develop Earth observation satellites for both civilian and military use—this double effort aimed to enhance the technological capabilities of national companies. The long-term goal was to increase Spain's ESA contribution to its economic weight proportionally. This is particularly crucial as the ESA's industrial policy comprises the geographical fair return (GFR). Under GFR, a country's share in the weighted value of contracts should align with its share of financial contributions. Despite Spain's efforts, the progress made by other members, led by France and Germany, resulted in a financing contribution of approximately 5% in 2018—falling well short of Spain's 7% GDP representation. It wasn't until 2019, with a former astronaut serving as the Minister of Science, that a formal commitment to achieving the 7% contribution 2020–2025 was announced. However, as of 2023, Spain's ESA contribution of €285.7 M remains below the 7% target, lagging behind the contributions of Germany, France, the UK, and Italy with 1046.8 M€, 1000.9 M€, 609.8 M€, and 580.1 M€, respectively. Additionally, in March 2022, as part of the Spanish government's economic recovery efforts post-COVID-19, the Strategic Project for Aerospace Economic Recovery and Transformation (PERTE) was approved. This initiative aims to mobilise nearly €4.5 billion in both public and private funding to boost research, development, and innovation in the aerospace sector. This double investment effort reinforces the consideration of the space sector as a national strategic priority. It also highlights the preponderance of public support despite increasing private venturing activity.

Related to defence projects, the Special Armament Programs (SAPs) have been used to modernise Spanish Armed Forces equipment since the nineties. The HISDESAT satellites project was essential to these SAPs and significantly impacted the space industry. The 2015 Defence Space System Plan highlighted, however, the need for international cooperation to attain future space capabilities (DGAM, 2015). Consequently, Spain has heightened its involvement in European projects related to security and defence, exemplified by its participation in the EUSatCen, located in Madrid. Spain is also engaged in Permanent Structured Cooperation (PESCO) and European Defence Fund (EDF) capability projects, participating in all four ongoing PESCO space projects. In the 2021 and 2022 EDF calls, 19 and 12 Spanish firms and institutes are involved in seven out of eight and three space-related projects, respectively. While Spain may not coordinate any space projects, these investments are expected to enhance the competitiveness of Spain's technological, scientific, and innovation sectors.

The upstream market still requires significant public investments. More than 60% of the turnover in the ground segments comes from government budgets (TEDAE, 2019). On the contrary, the downstream market (focused on satellite applications and services) has a high volume of private business. In this respect, new supportive mechanisms have been implemented to foster the development and expansion of space start-ups. Two key entities under the Ministry of Industry play a crucial role. Firstly, the National Innovation Enterprise (ENISA) extends financial support to small and medium-sized businesses engaged in innovative entrepreneurial projects. Notably, these funds can complement other potential public or private investment sources. On the other hand, the Technological and Industrial Development Centre (CDTI) has expanded its traditional low-interest loan programmes. CDTI now encompasses initiatives such as creating an investment fund to attract venture capital and private investors for new firms and developing co-ownership models to collaborate with business angels and investment funds in their investment decisions. Overall, these initiatives try to inject dynamism into the Spanish market for private ventures and, particularly in the case of space start-ups, have facilitated the involvement of private investors.

4.5 Collaboration Between Different Actors

The Spanish space ecosystem is vibrant and diverse. TEDAE, the business organisation, identifies 26 prominent space companies within the sector, including “New Space” companies like PLD Space and Satlantis. Moreover, Plataforma Aeroespacial Española (Spanish Aerospace Platform) boasts 41 space associates, with 25 classified as SMEs (small and medium enterprises). Some are also considered “New Space” firms, such as Alen, Emxys, Pangea, or Uarx (Table 3 in the appendix lists the leading Spanish space companies).

The number of “Old Space” companies participating in the “New Space” summits has risen, showing increased interest. Further, “Old Space” managers describe themselves as “Proto-New-Space”. There are at least two reasons they claim for this identification. Firstly, nowadays, many of them would be described as start-ups. Secondly, as institutional support had not evolved smoothly, they were used to working with tight budgets; therefore, controlling costs and shortening development timeframes were crucial. Further, they have developed the ability to adapt to the circumstances and be aware of potential changes. Accordingly, they are creating new divisions or branches to participate in developing the “New Space” segment and partnering with newcomers and start-ups. In some cases, these investments have turned to shareholdings and participation in the boards of directors.

“New Space” firms are also affected by “Old Space” companies. Some of the founders and CEOs of the new firms have previous experience in “Old Space” firms and have taken advantage of the experience, knowledge, and networking developed previously. In addition, apart from financing, technological relationships with “Old Space” have also been crucial to obtain valuable resources that would have needed much more time otherwise to acquire. Therefore, the evidence suggests that both types of companies show complementarities and that bidirectional relationships have been developed as each group has exerted influence on the other differently. “Old Space” managers acknowledge this influence by recognising strategic and management decision changes. The companies’ profiles in the TEDAE latest yearbooks also admit newcomers’ impact when they present their expertise in COTS (commercial-off-the-shelf) components’ validation or Low Earth Orbit (LEO) satellites. Overall, “Old Space” companies concede recognition to newcomers as market participants and potential competitors, indicating the emergence of a new space ecosystem.

Further, the cost reduction strategy of “New Space” companies has put focus on the verticalisation of production. Again, these partnerships are bidirectional. For example, PLD Space, the rocket launcher company, was awarded one of the Strategic Project for Aerospace Economic Recovery and Transformation Plan (PERTE) projects in June 2023. An advantage presented by PLD is the incorporation of “Old Space” partners (Airbus, Aciturri, and Deimos) to guarantee the quality and supply of components. Another example of New-Old Space technological partnerships is the case of Sateliot, one of the “New Space” start-ups in which Indra (a leading “Old Space” company) holds a significant stake. Sateliot has signed an alliance with Open Cosmos (a “new space” company started by Spanish Engineers but located in the UK) to construct and develop satellites for a constellation project.

One potential explanation for these bidirectional relationships could be that traditional Spanish companies are not as large as their European counterparts. For example, GMV, the European leader in the ground segment of navigation systems (EGNOS and Galileo), is the 6th industrial group in the European space sector, after Airbus, Thales Alenia, Ariane, Leonardo, and OHB. The “Proto-New-Space” self-identification and size structure may have helped them to be flexible enough to adapt to industry changes and cooperate with new entrants. Figure 1 illustrates the main concepts found in the data on which our thematic analysis of the evolution of the space Spanish market, its participants, and the bidirectional relationships among them were built.

Fig. 1
An illustration highlights key concepts in the data, such as legacy, opportunity, institutional support, research collaboration with government, industry, universities, society, finance and funding, and stakeholder relationships.

Summary of main concepts found in the data

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5 Discussion

From our data analysis, five different themes have emerged (see Table 1), and the explanatory power of the triple/quadruple helix model is particularly evident. Further, we have identified some circumstances that could have been improved to better align the context to the needs of the space industry.

Table 1 Themes and the triple/quadruple helix model
Full size table
  1. 1.

    Legacy and opportunity. The government has provided the institutional framework, both national and international, for the space sector to be established and developed. However, the government's support has not been remarkably constant. Further, the absence of a central agency has prevented the sector from having a unique strategy and has caused coordination problems. The situation has changed recently; coordination among agencies and ministries has been enhanced and will crystallise in the National Space Agency. Newcomers find a solid playground to start operations and develop valuable relationships.

  2. 2.

    Institutional support and demand. Government and state demand has allowed the industry to flourish and upgrade its technological expertise. The lack of continuity has, however, caused the industry not to be as prepared as other competitors to increase production since the institutional demand was based on few units. The “New Space” firms are assumed to depend on commercial demand, but that market is still underdeveloped. Therefore, although the new space ecosystem has reduced the relevance of government demand, it can still complement the commercial demand or even help to create it, as the plans adopted by the Spanish government to promote the development of new services show.

  3. 3.

    Relationships with universities and research centres. The research projects developed by the government have enabled a close relationship between the research centres and the space industry. The development of technological parks with its incubator initiatives has also helped to intensify the relationships between firms and the scientific community. It has reinforced the links between the three central actors of regional innovation systems: government, universities, and industry. In addition, entrepreneurial activities, university courses, and consulting have helped disseminate opportunities among students. Despite these efforts, some imbalances should not be overlooked. The shortage of graduates in technological and scientific areas or the low level of women in STEM programmes and industry reveals that public initiatives have not been adequately designed. In addition, the closed perception of the space industry might have acted as a barrier to entry for newcomers. Incorporating Spanish universities into different programmes sponsored by the ESA can resolve this situation by increasing enrolment in technological studies. Moreover, more industry transparency and openness to society could enhance the attraction of new graduates, narrowing the ties between university-research-industry-society.

  4. 4.

    Financing. The financial support system has encompassed state demand and institutional aid. The duality of the space industry has profited from the ad-hoc financing associated with the defence special programmes; the pre-financing system designed by the government has permitted the industry to reduce the risks considerably and has acted as a competitive advantage. Further, the state-owned enterprises and agencies designed to boost industry innovation have proven flexible enough to adapt their instruments to the changing ecosystem and its financial needs. Although it is still early to evaluate the effects of the new financial instruments (and it is out of the scope of this chapter), it seems that the government, through its delegated bodies, has understood the necessity to adapt mechanisms and has acted rapidly in reaction to the industry's new demands. In addition, business angels and private investors (national and international) are financing new ventures.

  5. 5.

    Collaboration between different actors. The emergence of “New Space” firms has brought about a new space ecosystem where bidirectional relationships between “Old Space” and “New Space” have emerged. Incumbents have incorporated new business models (through subsidiaries or new divisions), showing flexibility to adapt and entrepreneurial corporate culture that has not been so much observed in other European countries (see Lamine et al., 2021). Some of these initiatives are the result of partnering with newcomers. In addition, relationships with universities to discover and support new business ideas and stay closer to potential start-ups are being reinforced. Second, newcomers receive support from incumbents, either as technological or financial partners, to submit proposals for national or international tenders. These business relations rely on complementarities and could be an opportunity to develop the space sector further. However, society is not very conscious of the space potentiality or the multidisciplinarity introduced by “New SpaceNew Space” yet. More transparency by the industry and more fluid communications with universities and business organisations are needed to translate the space possibilities for economic well-being to attract and retain talent and develop a critical mass to absorb the advances and envision the possibilities of space-based markets.

6 Conclusion

In this chapter, we have examined the recent developments of the Spanish space industry and the “New Space” ecosystem in the light of institutional theory. Our interest is to show how institutions and institutional arrangements (or their absence) have shaped the emergence of different types of ventures. We also explore how newcomers have compelled both institutions and incumbents to adapt and how close relationships among market participants have emerged. To achieve this, we applied the three/four-helix theoretical model and conducted a systematic thematic analysis of various secondary information sources.

This chapter contributes to the broader analysis of national and regional space sectors (see, e.g., Brennan and Vecchi [2023], Castelnovo et al. [2023], and Clifton et al. [2011] for the Irish, Italian, and Welsh industries, respectively). We demonstrate the explanatory power of institutional theory and highlight the utility of thematic analysis in identifying patterns and gaining insights into the experiences and perceptions of industry participants. However, like all qualitative studies, ours has its limitations. Thematic analysis, while straightforward, may oversimplify the richness of the data and overlook broader contextual factors. Additionally, exploring aspects such as power dynamics, ideologies, and the relationships between language and meaning among industry participants would have been interesting due to the diverse nature and size of space industry participants.

Nevertheless, our analysis provides novel and valuable findings. The specifics of the Spanish case can be attributed to institutional support and the relationships between the government, universities, industry, and society. The “New Space” revolution has come with the adjustment of traditional players to adapt to the new circumstances and follow the pace of the newcomers. This process has been accompanied by the adaptation of institutional arrangements and support strategies as well. These new supportive measures imply that government demand and public finance are still relevant. Altogether, it suggests that “Old Space” has had the flexibility and speed to change its skin to the new circumstances. Further, the data indicates that the evolution and bidirectionality of the relationships among market participants appear crucial for building a competitive space sector. However, the analysis reveals some imbalances underscoring the need to address these to enhance the effectiveness of future political support. This is particularly important for fostering entrepreneurial activity and developing a commercial market for new space-based products and services.

The ongoing activities, events, and initiatives organised by various government bodies, universities, and industry organisations during the writing of this chapter and planned for 2024 reflect the sector's dynamism. They also point to future research opportunities, including exploring power relationships, enhancing contextual understanding, and evaluating recent policy initiatives in response to the evolving landscape.