Germany gets ahead in the new space race

The space industry is a multibillion-dollar business. According to a study by the German consulting firm Roland Berger and the Federation of German Industries (BDI), the market is worth around $600 billion (€516 billion) and growing. By 2040, it is predicted to be worth $2.32 trillion. That is about four times Germany's federal budget in 2025.

And many want a slice of the new private spaceflight pie. Currently, some $150 billion is flowing into the "upstream market," which "comprises production of the infrastructure required on Earth and in space, from launch pads, ground segments, and satellites," according to Roland Berger. A much larger share — approximately $450 billion — has been invested into downstream applications, which "consists of space-based solutions — positioning, navigation & timing, Earth observation, and satellite communications."

"New Space is essentially a data business," said Matthias Wachter, the managing director of the BDI's NewSpace Initiative and co-director of its Innovation, Security and Technology division.

Space travel goes from state to private

Space travel has changed dramatically since its early days. During the Cold War, it was primarily a race between the United States and the Soviet Union, with the impetus and funding coming from the state.

But in about 2000, governments began to slip into the role of clients. Since then, private companies have been providing rocket launch services and developing satellites. Major players SpaceX and Blue Origin were also born at the turn of the century.

Reusable launch vehicles have also made space travel significantly more affordable, opening up new business opportunities and paving the way for various applications. According to the US consulting firm McKinsey, launch costs alone have fallen by 90% over the past 20 years. 

It's not only about Space X and Blue Origin

While SpaceX and Blue Origin have captured the public imagination, there are many other companies in the space business, including in Germany, particularly as space technology is so versatile.

According to the BDI, about three-quarters of space companies have clients in traditional industries, which are using satellite-generated data for smart farming, logistics, Industry 4.0, infrastructure monitoring and autonomous driving, to name but a few applications. Clients range from startups to small and medium-sized enterprises and also large system integrators.

"Services such as communications, positioning, navigation, timing, and Earth observation would be unthinkable without space-based technology," says Björn Hagemann, a senior partner at McKinsey. "These areas in particular are going to grow significantly."

German companies make launch vehicles and satellites

In Germany alone, there are three companies working on launch vehicles. Isar Aerospace in the Bavarian city of Munich is developing rockets, on which many have set their hopes. Rocket Factory Augsburg and HyImpulse Technologies in Neuenstadt am Kocher, which are also both in southern Germany, currently have rockets in the testing phase.

Many German companies are also manufacturing satellites. "We have a large number of downstream companies using satellite data to develop new data-driven business models," says Wachter. These include OHB in the northern city of Bremen, which is developing complete satellite systems and components for Ariane rockets for example. The Exploration Company, which is headquartered near Munich, builds reusable space vehicles.

OroraTech provides solutions for monitoring wildfires from space for example. Constellr's satellites can detect heat patterns that indicate human activity, infrastructure load and environmental stress. The Berlin-based company LiveEO analyzes satellite and drone data and monitors global infrastructure networks, such as Deutsche Bahn's rail lines. 

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Private companies want more government help 

The BDI and the German Aerospace Industries Association (BDLI) think that the German government has to invest more in space in order to help these private companies to thrive, despite the fact that the economy is currently struggling.

Regardless of the high costs involved, Germany cannot afford to be left behind in space, says Wachter: "Space travel is not niche or a matter of prestige, but the key to a great many future technologies on Earth."

According to the British consulting firm Deloitte, navigation, communication, timing, and Earth observation are essential for modern critical infrastructure, to which many believe space should belong to as a sector. They argue that the dependence on other countries for key sectors and critical infrastructure poses significant risks.

US still has largest share of global space market

At the end of 2025, Germany committed approximately €5.4 billion to European Space Agency (ESA) programs over the coming years — significantly more than in the past.

In addition, €35 billion will be invested in military space capability over the next five years. Space-based services are increasingly useful for both military and civilian purposes.

It may sound as if Germany is investing a great deal but what about other countries? In 2024, the US held about 40% of the global space market, while the whole continent of Asia together had 20% and Europe 17%. To maintain this share through 2040, Europe would have to invest €237 billion more, according to Roland Berger. And if Europe is to increase its share to 25%, Germany will have to up its investment from €4 billion to €10 billion.

But Roland Berger says that spending more money will not suffice. Private companies need help to turn innovations into successful business ventures, the consulting firm says, arguing that there should be less bureaucracy, less regulation and more structural reforms and bolder state contracts.

"We have a huge amount of catching up to do if we want to keep up with the US," says Wachter. "But we have nothing to be ashamed of in terms of technology. Whatever the US is doing in many areas, we can do too. This is also evident from the fact that we are already playing a prominent role in many US programs."

This article was originally published in German.