11 Aug 2020
The Right Stuff: The Evolving Sources of Talent in the Space Sector
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Space, today, is in the middle of a decades-long restructuring. Driven by increasing international competition, an influx of private sector innovators and investors, and growing commercial applications of space technologies, the global space economy expanded by 70% in the last decade and reached $432.8 billion in 2019.
Despite the contraction inflicted by the coronavirus pandemic—a contraction that, though painful for many companies, has thus far fallen short of crippling the industry thanks, in part, to the continued flow of government investment—we still expect space to be a multitrillion-dollar sector within the next two decades.
As a result of this growth, a May 2020 report by KPMG predicted that by 2030 “every business will be a space business,” and that humans will soon be growing food, conducting medical research, and manufacturing objects in space. A side effect of this new investment, however, is that the participants, their goals, and the societal implications of their activities are evolving—changing industry norms and threatening the primacy of legacy aerospace and defense (A&D) companies in the process. The rapid evolution of the space sector is also having a significant impact on the war for talent between A&D organizations and highly entrepreneurial technology start-ups. Because the barrier for entry into the space market remains exceptionally high, the challenge to meet the demand for adaptive executives who possess the “right stuff” to succeed in such a critical industry will be significant.
Traditional space players like the U.S., Chinese, and Russian governments remain dominant in their capabilities and investments, but they’re no longer alone. Eighty countries have space programs and, increasingly aware of the commercial and strategic opportunities in space, many of these countries are investing heavily in the sector. Germany’s space investments grew by 32 percent in 2019, Australia’s by 29 percent, and India’s by 17 percent. Though the U.S., China, and Russia continue to have a competitive edge globally, new partners, competitors, and technologies are beginning to emerge.
Closer to home, the private sector is now the primary vehicle of space innovation, and its commercial mandate—i.e. its emphasis on cost-efficient operations and long-term revenue goals—has brought a number of structural, operational, and mindset changes to a sector traditionally dominated by state actors.
The private sector’s commercial imperatives have long been a defining aspect of the space sector: the first satellites, for example, were built by the Soviet and U.S. governments, were very expensive, and were designed for a narrow set of applications; but when the communications sector got involved, they found ways to drastically reduce costs while simultaneously finding a number of commercially viable ways for society to use satellites and satellite-enabled technologies. What’s changed today is that, rather than improving technologies first developed by the government, the private sector is now leading the development of new space technologies itself. In other words, the U.S. government, once the leading designer of space technologies, is now playing the role of the customer, adopting private sector innovations and outsourcing its own specific design needs to private sector partners.
The significance of this shift, and the centrality of the private sector to the U.S. space industrial base, was recently highlighted by the Chief Scientist of the U.S. Space Force, Dr. Joel Mozer: “We're very much at a precipice where private investment in space is driving the technology, not necessarily government investment as it has been in the past.”
Entrepreneurs and tech mindsets
Given the billionaire entrepreneurs, the steady stream of venture capital investors, and the engineering core, it should be unsurprising that many of the space industry’s newest players have adopted the business models, operational mindsets, and risk appetites similar to Silicon Valley. Modeled after their tech counterparts, many space companies—especially the newer ones—emphasize “failing fast” rather than “avoiding failure,” an operational ethos that aims to maximize creativity while minimizing investments in time and capital. Similarly, they’re designing products to be “good enough” rather than “state-of-the-art,” a utilitarian approach that minimizes up-front costs in favor of incremental growth and adaptation.
These new entrepreneurial mindsets constitute a stark change from the operating cultures in the space sector’s oldest and largest companies, most of which have a diversified presence in the wider aerospace and defense industry and have traditionally valued stability over agility. This preference in many ways reflects the historical conditions and priorities in the sector, when the government was the preeminent reason for and purchaser of space technologies, the competitor landscape was relatively stable, and the skills of employees did not have significant overlap with other industries.
Today, however, the landscape is more complicated, thanks to a plethora of new competitors and investors, a wider industry shift from an emphasis on long-term capital returns to rapid return on investment, and a highly competitive talent market that sees space companies in active competition with the likes of Google, Apple, and Facebook.
If the legacy players want to maintain their leadership positions in the space sector, they will need to rethink who their customers are, how their organizations interact with innovation, and how they define, attract, and retain talent.
How do they do this?
In our current environment, space companies should be looking for adaptive and entrepreneurial executives, leaders with first-hand experience working at both traditional A&D and leading technology companies. They should also rethink traditional elements of the employee-employer contract and begin thinking holistically about how they attract, retain, and partner with top talent.
In most of the big A&D companies, long job tenure and rigid promotional hierarchies have been the norm for decades. But to remain competitive leaders of these companies need to embrace looser team structures. They also need to grow more comfortable with non-traditional career paths. If every business in 2030 is going to be a space business, talent-profiles in the space sector will need to reflect the widening application of the field. The space sector has changed significantly in the last 5 years, let alone 30 years, and the tumultuous events of 2020 have only highlighted the inevitability and pace of change. The successful leaders in the new space era must embrace these changes and open their doors to the cross-blend of talent across all sectors.