The Earth observation industry has experienced accelerated growth in recent years. In 2020, OT’s commercial data market was $ 1.6 billion, a figure expected to exceed $ 2.5 billion by 2030, with the value-added services (VAS) market adding 5 additional billion dollars by 2030, with a CAGR of 7% through the decade, driven by emerging applications such as LBS and insurance.
Earth Observation and VAS Data Market by Sector in 2020
Following the publication of the latest edition of their report âEarth Observation: Data & Services Marketâ, in this article, Euroconsult leverages its extensive database and in-house expertise to explore the latest industry developments and highlight recent industry market trends.
Always a Defense & Security matter
Earth observation technologies have been used for a range of military and defense applications for decades, including scenarios related to land or sea border control and those requiring up-to-date information on infrastructure, logistics and military installations.
As estimated by Euroconsult, the defense market remains by far the largest, accounting for around 45% of the total data market, worth $ 1.8 billion, in 2020. US defense is the biggest consumer images, although non-US defense sales markets are expected to be the most important upcoming growth driver for revenue, with a 10-year CAGR of 5%, compared to 3% for the United States.
The defense sector is starting to show a tendency to buy commercial data like the new Earth Observation Commercial Layer program presented by the NRO in October. Previously, sub-meter resolution data was obtained from various orbital military assets, but now their growing interest is also in the highest resolution which is expected to become one of the main markets in the years to come.
Beyond the traditional multispectral VNIR market driven by companies like Airbus and Maxar, defense is increasingly attracted to other types of data such as hyperspectral (Orbital Sidekick, HyspecIQ, etc.) and SAR (Capella , Iceye, Umbra, Predasar, etc.). Most operators in the United States are supported by DoD through R&D contracts to develop innovative systems bringing greater revisit to defense assets. As usual, these new trends, driven initially by defense needs, should gradually impact other markets that will benefit from these new capabilities.
For example, more affordable satellites and constellations have created opportunities for advanced specialty sensors that meet the demands of a growing user base. The use of new specialized sensors will also unlock the potential of open source data from programs such as Copernicus and the latest generation of Landsat. The combination of new technologies, open data and a higher revisit rate will open up new markets around land use, e.g. detection of vegetation water stress, water saturation and fire detection. forest.
New types of data now support the Sustainable Development Goals
Beyond the defense market, the agricultural sector is a good example of an industry that will really benefit from the new types of data available. For example, the recent growth of hyperspectral imaging in the market, collecting data over a much wider range of wavelengths in the electromagnetic spectrum, rather than being limited to wavelengths of visible light, presents a multitude of new opportunities. Analyzing data like this can detect tiny changes in plant physiology, in turn providing information about proteins and potential crop diseases.
Satellite operators like Hydrosat or ConstelIR are also starting to take advantage of high-precision thermal infrared data, which measures the Earth’s surface temperature to better understand crop health and water needs. Access to such data will contribute to much more sustainable irrigation, as well as more efficient monitoring of yields, which has financial benefits not only in agriculture, but in the food industry at large. .
According to Euroconsult Market Intelligence report âEarth Observation Data & Services Marketâ, 12% of the OT market is related to natural resource monitoring in 2020, thus providing valuable information on status, value and amount of natural resource assets, which leads to better environmental protection. , as well as economic and global sustainability.
Considering that a large part of the population depends on marine resources and the fishing industry, especially in emerging regions, satellite imagery plays a prominent role in this sector. In addition to supporting sustainable fishing, with satellites monitoring ocean salinity, surface temperature and chlorophyll content, satellite imagery, and in particular SAR data and services, is also of interest to combat illegal fishing. , unregulated and undeclared (IUU) over large remote areas, thus reducing resources at sea and the associated deployment costs.
Lower cost of data and greater revisit allowing new global and responsive services
While the growth of value-added services is primarily driven by open source imagery and constellation offering, VAS operators and providers aim to tackle valuable new markets like finance and insurance, who should leverage this massive global surveillance to power big data models and improve forecasting and risk assessments. Euroconsult estimates that the SVA in finance market was worth $ 0.4 billion in 2020 with a CAGR of 40% over the decade, driven by emerging applications such as competitive intelligence, support for environmental governance , social and corporate and import / export control.
Indeed, satellite imagery is one of the alternative data, which represents non-traditional forms of data highly coveted by financial services companies looking to gain a competitive information advantage over their peers. Whether it’s counting cars in a retailer’s parking lot as a measure of sales activity, tracking ships across seas, monitoring crops, or scanning activity on rigs. oil companies, refineries and ports, satellite imagery is proving incredibly useful as a means of measuring industrial pollution levels. activity that cannot necessarily be determined at ground level.
However, these sources are also increasingly used by international organizations and companies to gain an overview of the impacts of local, regional or global phenomena such as economic crisis, political instability or food security issues. , in a global supply chain. Indeed, satellite imagery is used to feed risk assessment models, used by companies but also their insurance companies to prevent potential impacts on revenues and margin or by national and international organizations to prevent impacts on the economy but also on social phenomena such as illegal immigration, terrorism, and other hybrid threats.
Towards a new era for the Earth observation sector after the covid crisis?
Due to a long period of global lockdown, industries, financial services and international organizations have relied on remote sensing information like satellite imagery to keep their business going. Indeed, there have been concrete and operational projects that have used OT data to improve supporting industries and governments to collect information all over the world.
For example, a recent project from a British company Astrosat combined satellite data products with UK-based surveys and census data to identify ‘hidden vulnerable’ communities and better connect them with volunteers who could provide help and support. This is just one example of how OT data can make a valuable difference, even in social capacity.
Even after the unprecedented covid crisis in 2020 and the first period of 2021, the Chinese company “Webank” developed the China Economic Recovery Index (CERI), based on geolocation information provided by the Baidu constellation but also on satellite images to follow the economic conditions of China. recovery from the outbreak. The company measured manufacturing activity by creating the Satellite Manufacturing Index (SMI) using massive satellite imagery data to assess the impact of the coronavirus on several key sectors of the national economy. However, the lower cost of this data and the entire process of launching satellites and constellations can be harnessed to create higher value services that will inevitably lead to more interest in the field.
Despite 2020 bringing the first slowdown in fundraising for the market, due to the COVID-19 crisis, the next decade will undoubtedly be a very exciting time for the sector and associated industries. Indeed, this global phenomenon has shown the added value of remote sensing information, in particular Earth observation data and services, in many applications. Beyond all technological constraints, the biggest challenge for the Earth observation industry remains to prove what satellite imagery can bring to end users in their daily life and work by understanding their needs and by facilitating their preparation thanks to turnkey solutions.
In addition, as described in the Euroconsult report “Earth observation data and services” According to the Market Intelligence report, a recent boom in specialized acquisition companies (SPACs) has reshaped the Earth observation industry, with major operators going public thanks to this new financial opportunity. The billions raised through PSPCs are expected to trigger multiple mergers and acquisitions in the coming months and accelerate the deployment of operational constellations, which are supposed to unlock new applications and new markets.
Euroconsult is excited about the prospects that this growing market will bring to all industries in many sectors and the wealth of benefits that these Earth Observation innovations will bring to our daily lives here on Earth.