From startup to scale up in the Italian space sector

Abstract

Italy is the third country to have launched a satellite, the sixth country in the world for space capability, the third European Space Agency contributor, and it is among the leaders in Earth Observation. The Italian space industrial system covers the whole value chain, from the upstream (two-thirds of the companies work with satellites infrastructures and launching systems) to the downstream sector (one-third works with space enabled services and support activities). Unlike other industries, the space sector has some distinguishing features such as time to market constraints, capital intensive laboratories and facilities, and longer terms associated both to project development and return on investment, especially in business-to-business (B2B) models that require longer implementation time frames compared to business-to-customers (B2C) models. For these and other reasons, the scale up phase in the Italian aerospace sector is difficult to reach. Companies are struggling to survive to the lack of proper funding to sustain the huge investment, especially in R&D. Considering that the 80% of the companies that belong to the sector are small and medium-sized enterprises, with the largest share of turnover and employment concentrated in the hands of few large companies, Italian startups and innovative SMEs in the space industry represent a big portion of the whole sector and an interesting case study. The research will examine the differences in approaches adopted by five different startups in this ecosystem. The objective will be to identify and isolate the major variables and best practices that affect and contribute to the scale up process in this dynamic and fast-growing market. This thesis is qualitative in nature, as the topic requires an in-depth analysis of startups and innovative SMEs, and data collection methods include individual interviews and companies' observations.