A truly global market has emerged for remote sensing products and services. Or has it?
During my almost 20 years of research on remote sensing, colleagues have sometimes questioned my description of remote sensing in market terms. Especially in the early days, space-based remote sensing seemed very distant from a market concept, given its limited use globally, the heavy government domination of the means of production — satellites — and the control of data on the ground, largely for military and intelligence purposes.
Over time, however, the global proliferation of satellites and the explosive growth in geographic information systems (GIS) have created a true market in this once very static area. Today, countries grapple with which international partnerships to undertake, satellite builders try to understand how far deep in the value chain they should participate, and data providers seek new applications for use of their data across scientific, safety, security and even more popular domains. Applications like Google Earth provide barely a tease for the imagination of what can be done with space-based imagery, especially in combination with other information-age applications, like navigation.
Like any other truly global market, what will have to be watched are those potential game changers that either countries or companies can create in the market. Here are just a handful to watch:
Demand Side
- Increasing interest in the environment: Politics aside, large-scale Arctic ice melting, the oil spill in the Gulf of Mexico and extreme weather around the world demonstrate the urgent need to understand the rate and scale of environmental change. Many international remote sensing programs have a large environmental constituency, such as Europe’s Global Monitoring for Environment and Security (GMES) program, which plans to spend many millions of euros on environmental warning and other services through 2020. U.S. space management and organization remains inefficient by design, based on a Cold War split across national security and civil space programs. Look for major new emphasis in this area, especially as concerns about human effects grow.
- The development of new applications: The explosion of mobile phone and other applications create increasing pressures for visualization and virtualization of places on Earth. Stimulated by navigation and mapping tools, and increasingly, by the visual dimensions offered by video and Google Earth, developers will seek more real time and 3-D applications enabled by space-based remote sensing. Look for at least a minor pull from the commercial market for radar and spectral data as more becomes known about it.
- The importance of analysis: Whether from satellites or from the Internet, pundits increasingly take comfort in the fact that they have access to massive amounts of data. But having data without regard or a rigorous and replicable process for deriving insight from it is akin to drowning in the ocean. Unlike most data sets, space-based remote sensing requires specific skills and experience to gain that insight, yet allows the use of rich data sets to better understand and model complex relationships. Look for wide global and regional gaps in high quality analytic capabilities and intense training and recruiting efforts to mitigate or eliminate them. U.S. space providers have finally started to recognize this and expand their value-creation opportunities through analysis.
- Market-clearing capabilities: Satellite data providers still candidly acknowledge that they remain one step away from a multitude of customers — not the trained and specialized user, but the commercial one. Aerial data represents another important set of data layers but has its own limitations. Look for new concepts to bring these communities together, paradoxically expanding the use of data while commoditizing it.
Supply Side
- The emergence of low cost satellites: Over a decade of technology transfer and increasing global experience with small satellites now creates the conditions for new satellite system, processing, and exploitation capabilities at substantially lower cost. This will complement the explosive growth in GIS markets — by which people actually make use of the data — worldwide. Look to developments in the United States and Asia for truly innovative concepts out of academia or industry that can change the game.
- The increased availability of free data: Increased environmental, health, water and other concerns could prompt governments to begin to release remote sensing data or applications into the public domain in order to accelerate an understanding of trends and the development of solutions. While the natural inclination is to think about this as a market killer, it could also stimulate a whole new set of applications in new and parallel areas. Look for GMES and other government initiatives to impact market growth and market direction, although not only in conventional ways.
- Changing business models: The days of selling pixels alone are over. The traditional model of selling the single image at high value with only limited regard for the rest has given way to completely different valuations of current, near-real-time, archival, fused and other kinds of information. Satellite providers and other commercial vendors today demonstrate a wide range of products and services. For many commercial providers, the image itself is purely an artifact, just as the cell phone service worries little about the satellite as the means of transmission. Look for rapidly changing business models in this area.
- The emergence of new partnerships: Whether government or commercial, domestic or international, look to wholly new partnerships to advance the state of space-based remote sensing. We have already witnessed unconventional partnerships between countries, between vendors and across functional lines. Look for this trend to continue, including merger and acquisition activities.
Any one of these developments can catalyze rapid growth in the market, and create strategic advantage for those that most quickly take advantage of them, whether government, non-state or commercial.
What about government intervention in the market? Not surprisingly, the legal, policy and regulatory debate has shifted from one almost exclusively about the security implications of this growing market to one more heavily dominated by trade and services considerations. Many satellite policy and regulatory regimes have become irrelevant — or at least give way to much more complex calculations about information generally — at the point where remote sensing is fused with other capabilities, and becomes a true information product.
Sadly, the United States has not yet made the transition to thinking about this historically important capability in global market terms, largely to our disadvantage and most ironic because of the decades-old vision that engendered the idea of market creation. Nowhere is this more evident than in the state of U.S. remote sensing commercialization, where two decades of tactical thinking has left us with two firms, Digital Globe and GeoEye, looking more and more like government entities. Especially in such a challenging budget environment, the U.S. National Geospatial-Intelligence Agency’s Enhanced View program should move beyond an unimaginative “fair share” mode to one that fosters innovation and true commercial practice.
Our mindset more than anything is going to destroy our historic advantage in this area. We continue to envision space-based imagery as something that needs to be heavily controlled, and doled out gingerly to our friends and allies. Not only is this contrary to the developments on the battlefield — where we have shown an enlightened ability to share — but it also flies in the face of the ability of others, increasingly, to provide data to their partners and for adversaries to gain access to it as well. Many other countries think about these capabilities expressly in export terms, including the solid funding strategies and focus for innovation behind it.
Lest anyone think that the move to market implies “game over” for the intelligence use of remote sensing, far from it. The National Geospatial-Intelligence Agency’s director and the U.S. intelligence leadership are trying to reposition the agency for such a dynamic world. However, an adaptation in thinking and a rapid leveraging of what is increasingly available in the open is essential to success. Scarce government dollars should be focused in areas where no market will ever exist, for safety, science and true security applications. But the market will change the purpose and the impact of those investments rapidly over time.
It’s time to abandon traditional thinking here. The winners of this game will be those that leverage the market rules, those who change it and those who adapt to it fastest.
Kevin M. O’Connell is president and chief executive of Innovative Analytics and Training LLC and an adjunct professor of comparative intelligence studies at the Georgetown University.
