top of page

Skyfall? The geopolitics of a contested, congested, and conflict-prone outer space

Agora Strategy Executive Briefing on geopolitics in the space
Agora Strategy Executive Briefing on geopolitics in the space

Executive Summary

  • Space is becoming a key frontier of geopolitics, as more players enter this strategic, but increasingly contested, overcrowded and under-regulated domain.

  • The space sector is a dynamic growth market with significant economic potential and opportunities for innovative start-ups, despite continued US dominance.

  • Future wars are likely to be fought in space, thus jeopardizing the space-based systems that are essential for the functioning of modern societies and economies.

Implications for International Business

  • SpaceX's new heavy rocket Starship has the potential to revolutionize the space economy with its unprecedented transport capacity and low payload costs.

  • Commercial space-based systems experience increased demand from defense contractors and may at once become targets for direct or cyber-attacks.

State of Play

Space is contested, commercialized, and crowded

Outer space has become the fourth domain of human civilization, after land, sea, and air. Satellites in the Earth's orbits are not only strategically important and economi­cally valuable, but by now indispensable for modern societies. Global trade flows, communications, and financial transactions rely on them. Space domain has changed enormously in the last decade, now characterized through:

1) Internationalization: space is becoming more global with more than 80 countries operating national space agencies, civilian or military programs;

2) Commercialization: private firms challenge the dominance of states in space;

3) Congestion: rapid increase in the number of objects in space, including debris;

4) Inadequate regulation: the international legal basis lags behind political and technological developments;

5) Theatre of rivalry: strategic competition between the United States, China and Russia increasingly plays out in space, leading to the securitization and militarization of space.


Six actors have emerged as major powers in space: The United States, Russia, Europe (via the European Space Agency, ESA), Japan, China and India. They all have the capability to autonomously carry out strategically important space activities, exerting power either in space or through space. This preparedness for disputes in space not only creates international prestige, but also allows them to extend their geopolitical rivalry into this sphere, for example through the military support functions of satellites while enforcing its interests on Earth. As a result, more and more countries strive to expand their strategic and economic space capabilities, and the NewSpace – the commercial space sector – is expanding globally on a rapid path.

Key Issues Geopolitical rivalry on an extra-terrestrial battlefield

Whoever controls space also controls the earth, the saying goes. Indeed, space has become the “ultimate high ground” for observing and firing at objects in space and on Earth, making it crucial for power projection and modern warfare. Especially China is challenging the United States as a space superpower, even though the "second space race" is about much more than putting another man on the moon. It is about prestige and resources, where both actors compete for the best location to set up a permanent lunar station and occupy strategic positions for controlling the cislunar and Earth orbit, as well as for exploration missions to Mars and beyond. While Russia emerges as China's junior partner in space, India has also extensively expanded its space capabilities.


With Galileo and Copernicus, Europe has gold standard systems and contributes important components and capabilities to the NASA's space program. However, Europe is in danger of being left behind in the dynamics of geo-economics and geopolitics, as it understood space policy solely as a civilian matter. Its space industry relied heavily on Russian capabilities and with Russia’s war in Ukraine it has lost its autonomous access to space as it currently has no own launch capabilities.


All space systems have a dual-use character, as they can be used for civilian and military applications, leading to the securitization of space. Space-based capabilities enable operational planning and execution, providing militarily critical data, products, and services, making it essential for modern warfare and an operational domain in itself. In the future, it will also be a domain for war, and the United States, China, and Russia already engage in an arms race for counterspace capabilities: Anti-satellite missiles, co-orbital rendezvous and proximity operations, lasers, electromagnetic waves, electronic and cyber activities are all designed to (temporarily) disable or destroy the space capabilities of an enemy. States like France, India, Iran and North Korea are likely to catch up over time.


The Outer Space Treaty of 1967 still serves as a "space constitution", a valuable set of guiding principles in space, although it does not address new opportunities such as space mining, tourism, conflicts about frequencies in low Earth orbit (LEO), traffic management, debris, and the expected militarization of space. The UN’s efforts to develop an international space law are currently blocked, leaving only non-binding recommendations in place, such as the UN Space Debris Mitigation Guidelines and the EU Code of Conduct for Outer Space Activities. The EU Space Law planned for 2024 intends to bring the eleven national laws in EU countries into a coherent framework, opening up investment and business opportunities and generating advantages in international space competition.

Companies becoming dominant, but also dependent

Launching satellites remains a bottleneck for the space economy. Russia, the United States, France, Japan, China, the United Kingdom, India, Israel, Iran, North Korea, and South Korea as well as ESA have launched objects into orbit with autonomous launching capabilities. However, the American private company SpaceX currently dominates space travel with its reusable rocket systems, having launched 355 rockets since 2010, including 96 in 2023 alone. This represents a 43 percent share of orbital rockets and manned space flights, with launch numbers to increase again by a half in 2024. Moreover, a successful takeoff of Starship would revolutionize the space economy by making the size and weight of the systems launched into space, until now severely restricted, almost irrelevant due to its high payload. In conjunction with the drastic drop in launching costs, the number of satellites is increasing rapidly. While 20 to 70 satellites were added per year between 2000 and 2010, currently 20 to 50 satellites are launched per week. Most of these spacecrafts are so-called smallsats, weighing up to 600kg and primarily used for remote sensing and communication applications. Again, the market leader is SpaceX, whose Starlink system accounts with 5,552 smallsats for almost 60 percent of all active satellites.

Overall, however, the current space landscape is an extremely dynamic sector with opportunities for start-ups in manufacturing and launches, especially of smallsats and small rockets, with initiatives like the German Offshore Spaceport Alliance to build new launching sites in Europe. This creates options for new space-based services, particularly in earth observation, internet provision, and communication. In fact, private investment has increasingly replaced government contracts for space-based capabilities and services, bringing greater dynamism, innovation and risk-taking. However, the lack of international political regulation remains a significant challenge, given the battle for satellite positions in LEO and the lack of common rules for space traffic management. There are currently 36,000 known pieces of space debris 10 cm or larger and an estimated one million pieces larger than one centimeter, each with the kinetic effect of a hand grenade. In the first half of 2023, each Starlink satellite carried out an average of 137 collision avoidance maneuvers per day. Each collision would in turn create more space debris, thus potentially triggering a chain reaction threatening the long-term usability of Earth orbits. Finally, given the increased use of space-based capabilities in modern warfare, companies need to develop strategies for responding to requests for their systems and services, determining the level of cooperation they are willing to engage in with conflict parties


bottom of page