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The successful Hayabusa2 sample-return mission was a first. The celestial body sampled, the technology and processes used to do it, the size and quality of what was brought back — Japan accomplished what no other nation had before it.
Hayabusa2 was just the latest in a long chain of Japan’s success in space. After more than half a century, the nation’s space ecosystem is growing in ways unlike any other. The civil missions and government efforts, the commercial and startup communities, and the drive for talent are all evolving to adapt to the country’s distinct needs and opportunities, as well as its challenges. The process is ongoing, and there is reason to think what comes next will bring back to Earth benefits not just for Japan but for the world.
The Phases of Japan’s Space History
To appreciate how Japan’s space ecosystem functions today, consider where it started. Research and development of space technologies began in the 1950s, and when the Ohsumi research satellite launched in 1970, Japan was just the fourth country to put a domestic payload in orbit via an indigenous launch system. This period, from the 1950s until the 1990s, can be characterized as the R&D phase in Japan’s space history, according to Dr. Masami Onoda, director of the Japan Aerospace Exploration Agency’s Washington office.
“When the R&D phase was mostly completed around the 1990s, there was a turning point,” she said. “Globally, the user needs, applications and commercial industry were starting to take off, and there was a worldwide change.”
For Japan, part of this change included the 2003 consolidation of the Institute of Space and Astronautical Science, the National Aerospace Laboratory, and the National Space Development Agency of Japan. Together, they became JAXA. During this phase, the iconic H-2 launch system family, and the Epsilon with it, put more experiments and satellites into orbit. The International Space Station Japanese Experiment Module (aka Kibo) was built and sent to Kennedy Space Center for launch on the NASA STS-124 Mission. The Quasi-Zenith Satellite System (an enhancement of the U.S. GPS) was conceived and entered development. And in this phase came the Basic Space Law in 2008.
“The Basic Space Law changed the structure of the Japanese space policy and programs. With the structural change, the Cabinet Office set up the Office of National Space Policy, secretary to the Strategic Headquarters for Space Policy headed by the Prime Minister, which can be seen as analogous to the U.S. National Space Council. This change makes a huge difference.”
The space ecosystem in Japan emerged into a strategic national effort that includes a focus on industry and security, which Dr. Onoda said “brought a lot of life to the ecosystem since the 2000s.”
Today, it appears that Japan is entering a third phase in its space journey. In June 2020, it released a revision to its “Basic Plan on Space Policy,” which focuses on four core areas: ensuring space security; contributing to disaster management, national resilience and resolving global issues; creating new knowledge through space science and exploration; and realizing economic growth and innovation.
These goals command a larger space budget: 449.8 billion yen ($4.17 billion) in FY2021, nearly 25% more than a year prior. The budget supplies funding for continued development of the new H3 launch system, for satellite programs, and for a planned expansion of the Space Operations Squadron, a space defense unit within the Japan Air Self-Defense Force. Perhaps most exciting, however, is the funding for JAXA’s participation in NASA’s Artemis Program and Japan’s contributions to the lunar Gateway construction.
“JAXA has approximately $500 million for exploration, including contributions to Artemis, such as the Gateway development, in the JFY2021 budget and that will be carried out toward the end of the 2020s,” said Dr. Onoda. “If everything goes as planned, by the 2030s, we might see people going to Gateway regularly. Once we have learned how to do that, then we can start thinking about going on to Mars.”
The long-term mission to Mars is paved in part with the natural successor to Hayabusa2 — JAXA’s Martian Moons eXploration (MMX) mission. Scheduled to launch in 2024, MMX seeks to explore the Martian moon Phobos, to touch down, collect a sample, and then bring it back to Earth. It is unrivaled in its ambition and a quintessentially Japanese space mission. High stakes, never attempted, difficult to execute, and if past is prologue, we will soon be studying Phobosian rocks in Earthly labs.
But that is only part of Japan’s space story. For any spacefaring nation, exploration and sustainable activity beyond Earth takes a robust network of commercial enterprises, and here too the country is charting a unique course.
A Frontier Spirit for Earthly Benefit
The Japanese space industry is profitable. In FY2019, space industry sales were $3.29 billion, according to a report from the Society of Japanese Aerospace Companies. Sales resulted from space vehicles, ground facilities, and software, but what is most interesting is where revenue may grow in the years to come.
There are three commercial domains in the Japanese space industrial system: companies supplying materials and services for government missions; established aerospace companies providing services to commercial clients; and the new space startup community. These domains are not mutually exclusive, but they function and are funded in different ways.
Similar to other nations, government initiatives are made possible by vendors providing technology and systems manufactured according to public sector requirements. The prime contractors are large Japanese enterprises that work across numerous industries. For example, Mitsubishi Heavy Industries (MHI) is working with JAXA to produce the new H3 launch system, and separately, IHI Corp. provides JAXA’s solid-fuel Epsilon launch system. A cascading benefit from providing space technology for JAXA and other organizations is the intellectual capital and business capabilities that can be used for commercial space activities, such as selling launch services to customers around the world.
It is the third domain, the new space community, that is most compelling because these businesses are forced to solve a three-part challenge: secure funding, develop technology and services, and conduct business development, all simultaneously and on a global stage.
An analysis from the SPACETIDE Foundation showed that from 2014 to 2020, 44% of investments in Japanese space companies came from corporations, while 30% came from venture capital and virtually none came from angel investors or private equity — two sources that are significant funders of space start-ups elsewhere in the world.
“Overseas, the main investors [in space start-ups] are professional investors, angel investors and venture capital,” said Masayasu Ishida, president and CEO of SPACETIDE. “In Japan, the main investors are governmental funds and large corporations. The space business takes a long time to make money, so space start-ups need an investor who can offer a long payback period.”
Why are corporations investing? Mr. Ishida cites three reasons:
- The prestige that comes with showing a “frontier spirit” and a public image of a cutting-edge corporation;
- The opportunity to invest early in what is forecast to be a highly lucrative market (exceeding $1 trillion over the next two decades, according to The Space Report); and,
- To access technology that can support existing business (e.g., satellite data for advanced driver assistance systems).
“While Japan has been in an economic downturn since the 1990s, many of the larger corporations have abandoned R&D to invest in sales rather than science,” said Masashi Sato, SPACETIDE director and COO. “Since they lost their R&D capability, they came up with a new idea to invest in open innovation and new venture fields. This arose at the same time as the new government space policy, and that enabled space startups to get funding from corporations and also the government. It allowed them to take on the challenging position to make something new.”
The Japanese government plays an important funding role, such as through the Innovation Network Corporation of Japan (a public-private investment fund) and the Development Bank of Japan (which is government-owned).
“The Japanese government sees the space sector as important for the nation’s future economic growth,” said Mr. Sato. “The government sees space technology as an enabler to overcome barriers to machine automation, ubiquitous connectivity, Industry 4.0 and digitalization.”
No surprise then that the Japanese government’s Space Industry Vision 2030 aspires to double the domestic space industry within 10 years. To be sure, there is the potential for the domestic market to sustain space enterprises that provide data, communications and other outputs from space-based infrastructure, but that market is not yet mature. This is in part because, as Mr. Sato said, the Japanese economy has not yet undergone a full digital transformation where such data and services are needed at scale.
By this, Japanese space companies must seek customers outside of their home market, which presents a challenge. New businesses engaging in technically demanding and expensive enterprise must compete with companies in the global market that are already established and funded by eager angel investors and other private equity. As a result, the more than 40 new space companies in Japan are targeting areas of space access and use that are somewhat less crowded in terms of new space businesses, such as on-orbit satellite servicing, mass tourism, space mining, and pure exploration. There are many examples, and a good one is ispace, Inc. In it, the full picture of Japan’s space ecosystem becomes clear.
The Path Forward Takes Talent
The Google Lunar XPRIZE challenged privately funded groups to land on the Moon, travel 500 meters, and send back HD video of the feat. No one won. Team HAKUTO, managed by ispace, kept going after the competition was called, and in 2022, they will launch for the Moon on a SpaceX Falcon 9. The mission next year aims for a soft landing, and a second mission in 2023 aspires to deliver another lander carrying a rover, which will be deployed for surface exploration. The initial business model is to serve as the transport for customer payloads to and over the Moon’s surface, filling the essential gap between space transportation and lunar experimentation.
“We don’t know yet how big the cislunar economy could be in the best case scenario,” said ispace founder and CEO Takeshi Hakamada. “However, the figures we assume are that around the 2040s, 1,000 people are living and working on the lunar surface, and more than 10,000 people are traveling from the Earth to the Moon. That is the image we have, and according to the state of activities on the lunar surface, we can calculate what the economy could be.”
Mr. Hakamada pointed to the 2019 U.S. Air Force Space Command study predicting that the space economy will contribute at least 10% of global GDP by the 2060s and said the cislunar economy will undoubtedly play a major role in that potential. To get there requires a chain of human ingenuity and diligence, and that necessitates a global space-ready workforce that is currently too small. In Japan, the overall space workforce was 8,870 workers in 2018, according to The Space Report.
“There are not enough people,” said Mr. Hakamada. “We are struggling to hire the talent. Engineers but also the business side as well. In Japan, space engineers are not enough to support all the companies so we are competing with each other to hire the best talent. We are also hiring engineers from outside Japan.”
This is not a challenge unique to Japan. All nations and companies are striving to find the necessary talent, and increasingly, the solution is to draw professionals from other fields and from other countries.
“From the startup perspective, the key element is systems engineering,” said Mr. Ishida. “The process of systems engineering, architecture design and other areas are extremely important. Taking talented people from other industries is important for the sustainable growth of space start-ups.”
Mr. Sato added that businesses also need people to conduct sales, interact with the customer, and communicate the needs to the engineers and mission designers. Making matters more challenging, Japan has multiple industries that all require similar skill sets, and by that, the Japanese space sector is competing not just with other space enterprises but also with companies across the marketplace. And there is yet another issue.
“In the U.S., there is a lot of fluidity in the labor market,” said Dr. Onoda. “That is not yet the case in Japan, and people do not move jobs so much. So in some cases at JAXA, we provide cross-appointments or other opportunities to work at private companies. It is an exchange of talent with the commercial sector.”
For Japan and the world, the talent shortage remains an outstanding question, although one path forward is focusing on education for current students, re-skilling and upskilling the current workforce, and fostering a global culture of life-long learning. A key asset in this is that space awes every person. Everyone has looked up to the night sky and wondered about the possibilities of what might be accomplished and if they could play a part.
The Hayabusa2 spacecraft is currently more than 122 million km from Earth on a 10-year orbital path to reach asteroid 1998 KY26 in July 2031. A decade after it made history dropping Ryugu samples to Earth, it will make history again as one of the longest lived and most traveled spacecraft. Where will we be? Perhaps hundreds of people will be traveling to the Moon, and our sights will be set on an impending crewed mission to Mars. The stars need to align for that reality to emerge, but with talent development, enterprise growth and international collaboration, our trajectory is promising. If we succeed, Japan’s space ecosystem will be part of the reason why.
Shelli Brunswick is chief operating officer of the Space Foundation.