The global space industry has become a multibillion-dollar commercial arena. A study by Roland Berger and the Federation of German Industries (BDI) values the current market at roughly $600 billion (€516 billion) and projects it to grow to about $2.32 trillion by 2040 — roughly four times Germany’s federal budget for 2025.
Investment today is already substantial and split between upstream and downstream segments. Some $150 billion flows into the upstream market — the infrastructure on Earth and in orbit such as launch pads, ground stations and satellite manufacturing — while roughly $450 billion has gone into downstream services like positioning, navigation and timing, Earth observation and satellite communications.
The rise of NewSpace has shifted the balance of power. What began as a state-led enterprise during the Cold War has, over the past two decades, become a largely commercial field: governments increasingly act as customers while private companies build rockets, satellites and data platforms. Reusable launch vehicles and dramatic reductions in launch costs — McKinsey estimates a roughly 90% drop in launch prices over the last 20 years — have unlocked many commercial opportunities. The sector today is as much a data industry as it is a hardware one: satellite-derived data is being used across farming, logistics, infrastructure monitoring, autonomous transport and more.
Germany’s space ecosystem is growing and diverse. Three domestic companies are developing launch vehicles: Isar Aerospace in Munich, Rocket Factory Augsburg and HyImpulse Technologies in Neuenstadt am Kocher. Several German firms build satellites or satellite components — OHB in Bremen is one of the better-known system integrators — and companies such as The Exploration Company are developing reusable space vehicles.
Beyond hardware, a robust downstream industry is emerging. Firms such as OroraTech monitor wildfires from space; Constellr detects heat signatures tied to human activity and infrastructure stress; LiveEO in Berlin analyzes satellite and drone data to monitor large infrastructure networks like railways. The majority of space-sector companies in Germany serve traditional industries, using space-enabled data to create new business models for agriculture, manufacturing, transport and energy.
Industry groups and consultants argue that private firms need more state support to scale commercial innovations. The BDI and the German Aerospace Industries Association (BDLI) urge stronger government investment and simpler regulatory frameworks so startups can convert technical advances into viable businesses. Roland Berger likewise emphasizes that funding alone won’t suffice: firms need fewer bureaucratic hurdles, structural reforms and bolder public contracting to accelerate commercialization.
Germany has begun increasing its commitments. By the end of 2025 it pledged about €5.4 billion to European Space Agency (ESA) programs and plans roughly €35 billion in investments for military space capabilities over the next five years. Still, Europe lags the United States: in 2024 the US accounted for roughly 40% of the global market, Asia about 20% and Europe about 17%. Roland Berger estimates Europe would need an additional €237 billion through 2040 to hold its current share; to grow Europe’s share to 25% would require Germany raising its annual investment from around €4 billion to about €10 billion.
Leaders in the German space sector stress that the country is not starting from zero. German firms already play significant roles in international programs and possess competitive technologies. But narrowing the gap with the US — and building a resilient European space industry — will require a mix of public funding, regulatory reform, targeted state contracts, and policies that help startups scale into global players.
Space-based services are becoming critical infrastructure: navigation, communications, timing and Earth observation now underpin many civilian and defense systems. For policymakers, the question has shifted from whether to participate in the new space economy to how to shape a national and European strategy that secures technological sovereignty while enabling private-sector growth.
This article was originally published in German.