Profile: Stability Through Diversity

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  Space News Business

Profile: Stability Through Diversity

By PETER B. de SELDING
Space News Staff Writer
posted: 16 March 2009
11:37 am ET





Michael Simpson

President, International Space University

The International Space University (ISU) appears to be digging itself out of a financial hole even as the sagging economies worldwide are dragging down many universities with them.

Founded in 1987, ISU has learned from its earlier missteps and is determined to keep pace with the changes washing through the space sector – a redistribution of wealth from hardware to the service sector, and a rebalancing of investment as India, China and selected other nations in Asia and Africa enter the field.

ISU President Michael Simpson said the university, which held its first summer session in 1988 and opened its main campus in Strasbourg, France, in 2002, has found a niche that gives it appeal to companies and space agencies in times of feast and famine.

At the same time, it has been able to maintain an aura of international neutrality to such an extent that it held what Simpson says was a miracle of a 2007 summer session in Bejing – despite the fact that China’s space sector that year was in a defensive crouch following an anti-satellite missile test.

Simpson spoke recently with Space News staff writer Peter B. de Selding.

How do you assess ISU’s financial health?

We’re healthy these days. We had a period a few years back when we had accumulated a deficit, and we were in a state of negative net worth. It took us awhile to adjust, but we have now managed to improve our financial condition by five fold.

What I mean by that is that we were about 1 million euros ($1.26 million) in the hole before and we have reduced that to around 200,000 euros. We have good prospects to go positive in the next year or two. Our most difficult period was around 2005, and we worked a plan at that point to emerge with a solid reserve position by 2010. We are on track to do that. We sometimes tell our people that our status as a not-for-profit institution also means not for loss.

How have you managed to improve the situation?

Pretty basic stuff: We focused on cost management, and we got a little leaner in terms of personnel. We organized fewer subsidized international meetings and in general are focused on our core mission.

Has the financial crisis reduced the number of applications you receive?

No. The reality is that our applications are at an all-time record, and the quality of the applications we receive is increasing.

How can you explain this?

To succeed in the space business you need to invest in your talent. You cannot roll over and play dead. Some company managers are concluding that it’s best if they invest in education now, when they can most afford to have middle managers not at their desks.


You have a diverse set of benefactors – the French air force, the China National Space

Administration, other space agencies, the regional French government and the private sector. Does this provide stability?

In some cases government agencies use us to help with capacity building, to develop their own cadre of people who are capable of managing their domestic industry. This support to us often comes in the form of subsidizing scholarships for students. China has done this for the last eight or nine years; other governments do too. The European Space Agency (ESA) has been a huge supporter as well.

How does your annual financial support break down by types of contributors?

We get around 35 percent to 45 percent of our cash budget support from space agencies – ESA, NASA, the space agencies of Canada, France, Japan and China.

In addition to this, some 15 percent of our support comes from agencies sponsoring scholarships. Other government funding includes regional and local governments, including the regions of Barcelona and Strasbourg. So government support is around 60 percent of our total.

The remaining 40 percent is personal contributions from donors, including individuals such as alumni, and tuition payments. We also receive support in various forms from corporations, including Snecma of France and the Boeing gift that we announced recently.

Your backers recently have included the service sector, notably several commercial satellite operators. Is this the result of a planned effort on your part?

Yes, when we looked around at what we were doing in 2005, we concluded that we had earned a reputation as a school for explorers. We certainly don’t want to lose this, but we don’t want to give the impression that we are not focusing on today’s issues. So we have our Master of Space Management degree, and we have recently started an Executive MBA degree with the help of several satellite operators. We recognized our shortfall and this resulted in a huge response from the operators.

Is there something specific about the space business that a conventional MBA won’t teach?

We have found that venture capitalists and others outside the sector who attempt to analyze it occasionally run into difficulties because of the unique aspects of the industry – for example, waiting 15 years for a payback on an investment, and the significance of single-point failures in many missions. We found that people wanted us to address these issues in a way that would not require that employers give up their people for a full year. Our MBA program is 18 months long but requires only about 10 weeks of actual face-to-face time. It took us two and one-half years to come up with something we thought would be effective and manageable from a cost standpoint.

These MBA candidates are all in the space industry?

Not all. About 20 percent are in other complex industries, and they come here with the idea that if they can deal with rocket scientists, they can deal with any complicated industry.

Is there a shortage of recent engineering graduates in the United States and Europe?

I get the sense there is a problem. Pretty much all our engineers have multiple job offers. The demand for engineers with a breadth of training is enormous. I get a sense that some companies are working to replace people to keep up with their book of business. On the management side, our graduates get offers but they do not get swamped with prospects like the engineers do.

Going forward there is going to be an interesting dynamic, as China and India are both training lots of engineers now; maybe more than they can use over the longer term. So there may be an equilibrium in the worldwide supply, but still an issue in the United States and Europe.

China’s space program is among the most dynamic. How is your relationship with China given that country’s traditional secrecy?

Around 125 of our 2,700 graduates are from China, and many of them now occupy posts of importance in China’s space industry. We held our 2007 summer session program in Beijing, and we got to see an amazing number of things there. Culturally, China is more than capable of engaging in open discussions.

Has ESA’s expanded membership, now including Central and Eastern European nations, helped ISU?

ESA is a kind of poster child for merging many countries and cultures into a single program. That is what we are trying to do as well – to bring a very diverse group of students together into a creative curriculum that forces them to work together. With us, they are not just part of the same school. Our Master of Space Studies course curriculum cannot be successfully passed without working together. We hope this experience is one they will remember for the rest of their lives.

Has the U.S. technology-export control regime, known as the International Traffic in Arms Regulations (ITAR), been an obstacle?

Occasionally a presenter will tell us they need to modify the presentation because of that, but really we have not had problems with this. We don’t focus on the minute program aspects that touch on the kinds of national security issues that can cause issues with ITAR. So really this has not been a problem for us.