Capital Markets Report: Investigating new opportunities in Japan for investment in space industry

Philippines Space Agency director-general Joel Joseph Jnr Marciano (from left), Prime Minister Christopher Luxon and Tāwhaki National Aerospace Centre CEO Linda Falwasser in Manila on the PM’s South-East Asia mission.

Aerospace pioneer Linda Falwasser is looking forward to investigating new opportunities for investment and business collaborations with Japanese space industry players.

Falwasser is chief executive of the National Aerospace Centre on the East Coast of the South Island, a 50-minute drive from Christchurch.

New Zealand’s burgeoning space industry, of which Falwasser is a member, will be spotlighted during Prime Minister Christopher Luxon’s upcoming mission to Japan. Japan has an established space industry and Falwasser has been exploring relationships during the past 12 months.

“They’re starting to increase the cadence of space launches,” she says. “They’ve got limitations within their own country; [and] they’re looking to partner with like-minded [people]. So, it’s going to be quite interesting to really get in there on the ground.

“In its way of doing business, Japan is kind of similar to us, as Māori,” she observes. “How you go into the front door is really important. So the mission is providing a really good platform to go in there.”

She notes that 50 per cent of the global space economy is made up of what she describes as “backbone” opportunities.

“We’ve got established assets. We are looking after the domestic market,” she says. “But we’re now really looking at partners. Whether they are investors. Whether it’s bringing investors and companies and organisations together to develop the site with like-minded people.

“We’re trying to find who shares the vision. Which partners would really suit. The spatial planning that we have for the location can cater for quite a diverse range of activities.”

Falwasser was a member of the PM’s earlier mission to Southeast Asia, where she deepened promising connections in Singapore and later liaised in Manila with the Philippines Space Agency. Among the Singaporean connections were Singapore Space and Technology Limited’s Thomas Zhuo; Jonathan Hung, the executive director at the Office for Space Technology & Industry; and Lynette Tan, CEO and chairwoman of Space Faculty, a global platform that connects government, corporations, and education institutions with the best space experts and researchers in the world to develop technology and people.

Falwasser has put the invitation out to Singaporean businesses to come to the National Aerospace Centre to launch and test new technologies, “enabled by a progressive regulatory system in Aotearoa New Zealand”.

Singapore’s aerospace and space sector is rapidly advancing, encompassing everything from design and production to satellite-based services like data processing, she notes.

“There are a number of other opportunities that we’re exploring, and some where we are navigating collaboration opportunities for New Zealand universities, researchers and so forth. Tāwhaki can play a key role being a sort of national centre that helps sew initiatives together.”

Japan beckons

Sir Peter Beck, charismatic founder of Rocket Lab, is the most notable New Zealand success story in the thriving international space sector. New Zealand hosted seven rocket launches in 2023 – the fourth-most globally – all by the US-listed Rocket Lab.

Rocket Lab’s Sir Peter Beck with Prime Minister Christopher Luxon at a parliamentary function to announce the Prime Minister’s Prizes for Space.

Beck is expected to fly into Tokyo to join part of the PM’s mission. There will be a visit to the Astroscale Space Orbitarium. Astroscale’s goal is to create a sustainable space environment. In 2021, it launched the world’s first commercial debris removal technology demonstration satellite. Astroscale Holdings Inc was listed on the Tokyo Stock Exchange Growth Market on June 5.

They are also expected to meet with JAXA, the Japan Aerospace Exploration Agency, which provided satellite data to New Zealand on the land surface changes from the 7.8 Kaikōura earthquake.

In 2022, New Zealand officials estimated New Zealand’s space industry was worth more than $1.75 billion and growing, employing about 5000 people and a further 7000 in support services.

New Zealand’s 240 space-related companies are diverse, ranging from launching payloads to satellite data collection, dark skies tourism and a re-usable space plane to take satellites into orbit. But the industry is dwarfed by Japan’s US$27b space industry – and that of Australia and the United States – all vying for a share of a US$600b global market.

The Government has set strong growth objectives for New Zealand aerospace, targeting the growth of a $10b industry by 2030. It is another plank in the diversification of the economy and integral (along with the emergence of other innovative industries) to the Government’s goal to double exports by value within a decade.

In 2022, the Ministry of Foreign Affairs and Trade estimated Japan’s space industry was expected to grow to $57b by 2050. Including space-adjacent sectors – for example services using location data from satellites – the market is predicted to grow to $770b by 2050.

The “upstream” segment – focused on manufacturing space equipment – was worth $4.6b. The “downstream” segment – centred on using space to provide services, such as Earth observation, global navigation and satellite communication – was worth $10.4b.

“Old Space” companies – large established companies, such as Mitsubishi Heavy Industry, IHI Aerospace, Mitsubishi Electric and NEC – dominate the “upstream” segment, which relies heavily (90 per cent) on government demand.

“New space” companies dominate the “downstream” segment. Approximately 70 per cent of some 54 start-up companies are connected to Japanese universities.

Japanese Earth-imaging company Synspective launched a two-stage electron booster from RocketLab’s New Zealand launch site in December 2020.

Falwasser will be back to Japan in July to do another deep dive and speak at a space sustainability conference.

“The more I’m understanding key markets, the requirements of launch companies, innovators, the types of infrastructure developments and the size of the opportunity, that’s what I’m sort of looking to sort of max right now,” she says. “Unless you know there’s an investor that would be into some sort of long-term innovation centre like that.”

· Linda Falwasser, hailing from Waikato-Tainui and Ngāti Awa, serves as chief executive of the Tāwhaki Joint Venture.

It is a pioneering partnership between the Government which has invested $29.4 million to date, and indigenous people of Kaitorete weaving together cutting-edge technology in aero-space and environmental rejuvenation.

As the founding CEO, Falwasser has been instrumental in establishing and advancing both the partnership and the Tāwhaki National Aerospace Centre. This multi-use facility, located in one of the world’s premier locations for aerospace activities – the 25km-long and 3km-wide coastal Kaitorete Spit, south of Christchurch – provides unparalleled access to key orbits and opportunities for launching and discovering new horizons.

United States-based Wisk Aero conducted its world-first airspace integration test flights for an uncrewed aircraft from Kaitorete. Kiwi firms Dawn Aerospace and Kea Aerospace are now able to conduct horizontal space launches and stratospheric flights from the site.