https://asia.nikkei.com/Business/Aerospace-Defense-Industries/Japan-s-government-emerges-as-incubator-for-space-industry
Japan's government emerges as incubator for space industry
October 4, 2024 10:24 JST
The Japanese government is becoming increasingly like a venture investor in space startups, soliciting ideas, making them compete for money and investing in those with the most business potential.
On Sept. 19, the government awarded a total of 10 billion yen ($69 million) in subsidies to three launch startups in the second leg of a three-stage competition.
The first leg was held in September 2023, and four launch startups were selected.
The last selection is scheduled for April 2026, in which two finalists will be chosen for full subsidies.
The selected startups include Space One, which will make a second attempt at orbital launch in December, and Innovative Space Carrier, which has started testing its reusable launch system, eyeing a 10-meter flight test next year.
Eliminated from the race was Space Walker, a spaceplane maker that is aiming for a suborbital spaceplane launch by 2028.
Space Walker is preparing for a test of a navigation, guidance and control system as well as a captive firing test of a winged rocket next year.
Space One, Innovative Space Carrier and Space Walker all inherit or build on technologies originally developed by the Japan Aerospace Exploration Agency (JAXA).
"The government is apparently choosing projects with the strongest commercial case," said Atsushi Murakami, who runs space business consultancy Satellite Business Network.
The government budget is limited and focusing money on those that look most promising is natural, he said.
Space One, for instance, inherits JAXA's work on solid-fuel technology. Canon Electronics and IHI Aerospace, the company's two major shareholders, both participated in the project that demonstrated the ability to add satellite launch capability.
Now, those space startups are trying to turn the technology for scientific research into commercial services with financial support from the Japanese government.
The support may be modest, up to 14 billion yen each if full subsidies are awarded, but it highlights a new role for the government as a "venture capitalist" in the space industry.
The move comes as Japan hopes to maintain its position as a major player amid a rising China and the rapid growth of private space companies led by SpaceX.
The financial support for the three startups comes from the Small Business Innovation Research (SBIR) program, which is modeled on a similar scheme that has been in place in the U.S., aimed at helping startups commercialize their technologies.
The government expanded the SBIR program in 2023 to support not only the development but also the commercialization of space technologies.
The government has also created a Space Strategy Fund for technologies at an earlier stage, dispensing 1 trillion yen in total over the next 10 years under JAXA oversight.
Examples include a satellite constellation project by Interstellar Technologies, the startup that launched a sounding rocket reaching space in 2019.
The project aims to develop technologies for the formation flight of many small satellites to enable direct satellite-to-phone service.
For technologies that are already well-proven, the government can serve as an "anchor tenant" of their services until commercial demand takes off.
In the budget request for the next fiscal year starting April 2025, the Ministry of Defense requested 323.2 billion yen to develop satellite constellations for guiding long-range missiles against enemy targets.
The ministry plans to have the systems in place in fiscal 2027, fueling expectations that it intends to use satellite constellation services offered by Japanese startups, such as Synspective, iQPS and Axelspace.
Between fiscal 2020 and 2024, the government agencies expanded their space-related budget by 2.4 times to a total of 895 billion yen, partly due to bigger support for the private space sector. Such support, however, is meant as a short-term measure.
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