Economics - Innovation - Inclusive Growth
  • MISSION-ORIENTED INNOVATION POLICY: SPACE

Space Research

Professor Mazzucato, working with Dr Douglas Robinson, has recently worked with NASA and the European Space Agency (ESA) to examine innovation policy related to the core missions of ESA and NASA. Their work explores the existing and evolving public-private partnerships in the US and the European context—and the implications of these for space related innovation, socio-economic impacts and growth.

Public activities in space are undergoing massive change, with more than 60 space faring nations and a growth in the number of private sector organizations interested in the space economy. As a consequence, the space sector is rapidly evolving in its 'ecosystem', and also being pressured to deliver socio-economic impacts at a reasonable cost.

In the US, while NASA has historically been able to drive market creation through its procurement, the past decade has seen a visible shift in US space policy away from NASA-directed developments in areas such as low-Earth orbit (LEO), towards an eco-system with a mix of private, not-for-profit, and public actors in LEO. This has fundamentally changed NASA ‘s role from one of orchestrating/directing, to a more ‘facilitating’ one driven by commercialization needs. This shift in approach has ramifications for the LEO ecosystem as well as NASA’s innovation policy, which has previously centred on clearly defined “mission-oriented” objectives, such as putting a man on the moon or creating the space shuttle fleet.

For the European Space Agency (ESA), creating a strong European space innovation system is a key mission in the current era of what some have called “new space” and which ESA's Director General Jan Woerner calls “Space 4.0”. ESA is exploring new ways of partnering with the increasing number of space faring nations, private space firms and other non-space entities for achieving socio-economic impacts including jobs and growth and societal grand challenges.

Both NASA and ESA have been interested in learning from Professor Mazzucato's work on market creating 'mission-oriented' policies, and how they differ from the more traditional market fixing framework steering public agencies world-wide. The work of Mazzucato and Robinson, with NASA and ESA, is exploring the different implications for public-private partnerships that these different policy frameworks imply.

mission-oriented
innovation policy

Professor Mazzucato is working with policy makers around the world, to explore how mission-oriented innovation policy and investment can also stimulate investment in the business sector, contributing to economic growth that is smarter, more inclusive and steered towards tackling societal and environmental challenges. Her research is developing a new framework that understands the role of the state as shaping and creating markets, not only fixing them. It asks challenging questions about the ways in which public sector investments are currently envisioned, justified and measured, and considers how to build the type of public sector institutions that can welcome the fundamental uncertainty—and hence risk-taking—inherent in the innovation process. Central to this is how we can socialize both risks and rewards so that economic growth is not only ‘smart’ but also ‘inclusive’. Read more about the origins of the project here.

key questions

  • What kind of framework around 'New Space' can foster innovation policy which is also equipped to create sustainable and fair economic growth?
  • What is the influence and role of new actors, brokers and new partnerships (e.g. SpaceX with NASA for launchers) in the expanding space sector?
  • What can be said about the (re)distribution of resources and power between new private actors (e.g. Galaxy, SpaceX, Nanoracks), and the older public actors in space (ESA, NASA)?
  • What are the various forces directing the space industry and to what end?
  • How to integrate the market creation (vs. market fixing) framework into the structuring and execution of space missions?
  • How can “New Space” be combined with grand challenges, such as those around environmental sustainability?
  • What are the various typologies of PPPs in the space sector?

Sharing risks and rewards

Contact: Caroline Cooper - c.j.cooper@sussex.ac.uk

Space projects

Screen Shot 2016-08-15 at 12.51.00Mazzucato was commissioned by NASA to be part of a small group studying the economic development of Low Earth Orbit (LEO). Her contribution focussed on the role of the changing relationship between the public and private sectors in the emerging LEO economy. Other commissioned researchers included Eric Maskin (Harvard), Josh Lerner (Harvard), Greg Tassey (Washington), Al Link, Nichcolas Vonortas (George Washington University). NASA Research Directors: Alexander Macdonald and Patrick Besha. Report completed April 2015.

NASA E-book, Economic Development of Low Earth Orbit, including a chapter by Mazzucato and Doug Robinson, Directing vs. Facilitating the Economic Development of Low Earth Orbit. PDF

Blog by Dr. Dava Newman, deputy administrator of NASA and Tom Kalil, deputy director for policy for the White House Office of Science and Technology Policy

Space Working Papers

Lost in space? NASA and the changing public private eco-system in space

Lost in space? NASA and the changing public private eco-system in space

Mazzucato, M., Robinson, D., SPRU Working Paper Series SWPS 2016-20
“U.S. public activities in space directed via NASA are undergoing change. While NASA has historically been able to drive market creation, through its procurement policy (which is much weaker in Europe), the past decade has seen a visible shift in US space policy, away from NASA-directed developments in low-Earth orbit (LEO) towards an ecosystem with a mix of private, not-for-profit, and public actors in LEO. This has fundamentally changed NASA‘s role from an orchestrating/directing role, to a more ‘facilitating’ one driven by commercialization needs. This shift in mission and approach has ramifications for the LEO ecosystem as well as NASA’s innovation policy, which has previously centred on clearly defined “mission-oriented” objectives, such as putting a man on the moon or creating the shuttle fleet. Such objectives required ‘active’ innovation policy whereby NASA both funded and ‘directed’ the innovation, within its walls and with its partners. The emerging multi-actor ecosystem approach has involved a more open-ended objective that does not have a unified nor clearly defined end-game. In this situation, NASA’s ability to shape activities in a direction in line with its mission will depend on its relationships with other members in the system. The rise of new actors in the space eco-system, and new relationships between them, presents interesting challenges for innovation policy informed by an Innovation System approach. In this paper, we critique the market failure approach of public intervention in markets and describe further work to be done in the innovation systems literature – more focus on the interactions between agents (and the type of agents) as complimentary to the dominant focus on funding programmes in innovation systems. In this paper, we present the evolving processes of NASA’s engagement in building a low-earth orbit economy to draw out case specific insights into a public agency shifting its mission to incorporate approaches to facilitate the market creation policy. The paper focuses on the way that NASA structures its new innovation policy, away from a classical supply side oriented R&D investment through NASA itself, towards a policy of orchestration and combination of instruments rather. We close the paper with a reflection on the ramifications of NASA’s approach to building a sustainable low-Earth orbit economic ecosystem.”

Space talks

ESA Ministerial Council meeting

ESA Ministerial Council meeting

Paris, France – Mazzucato addressed 20 ESA Ministers, with a keynote on the implications for the Entrepreneurial State on the future of Space policy.

SPACE MEDIA

There is a job for regulators in the space economy

There is a job for regulators in the space economy

“To stimulate fresh thinking, Nasa challenged economists, including the Nobel Prize-winning Eric Maskin and Mariana Mazzucato, to examine the economic development of low earth orbit, or ‘commercial space’.” John Thornhill