Arpit Chaturvedi
(Original and abridged version published in Policy Circle, September 13, 2024)
Photo by Chirag Malik on Unsplash
Why do we care so much about the space sector in India?
I have written several articles, including on Policy Circle and in international journals such as SpaceWatch, advocating for the expansion of the space sector in India. I have had the privilege of engaging with space entrepreneurs in India and the US and have developed a close friendship with one of the most passionate evangelists of the space sector worldwide—Ms. Shelli Brunswick, former Chief Operating Officer of the Space Foundation. In her numerous lectures and writings, she often poignantly mentions that we are already living in a space economy. Yet, every time I find myself in a space-related discussion, a recurring thought surfaces: Why are we in India so determined to promote our space sector?
India is a relatively late entrant in the global space race, and the average person, an active economic agent, often lacks a clear understanding of why the space sector is so crucial to promote. Without this broader understanding among the public, policymakers might struggle to craft policies that genuinely enable the sector's growth. The risk is that our space sector might experience an initial rapid expansion but soon hit an upper ceiling—a common fate for new sectors in developing countries.
India’s Space Sector is on an Episodic Growth Path
Dani Rodrik’s work on structural transformation (Structural Change, Fundamentals, And Growth: An Overview, 2013) offers a crucial framework for understanding the potential trajectory of India’s space sector. Rodrik identifies two main challenges for developing countries aiming for sustainable economic growth: the "structural transformation" challenge and the "fundamentals" challenge. The distinction between the structural transformation challenge and the fundamentals challenge can be confusing because both are crucial for long-term growth. While structural transformation focuses on shifting resources to high-productivity sectors, the fundamentals challenge emphasizes building the broader economic foundations, like institutions and innovation.
Rodrick explains the difference between the structural transformation challenge and the fundamentals challenge as follows: “In practice, it may be far easier to promote industrialization directly, by subsidizing industry in diverse ways or removing specific obstacles to it, than to do it indirectly by making broad investments in human capital and institutions and hoping that these will trickle down to investment incentives in industry. It is possible to have rapid structural transformation (industrialization) without commensurate improvements in fundamentals. East Asia is the premier example of this strategy. In China, governance and human capital have lagged significantly behind the country’s manufacturing prowess.” The accumulation of fundamentals, according to Rodrik, requires costly, time‐consuming, and complementary investments across the entire economy. This is where India needs to work on.
He cautions though that: “it is also possible to invest significantly in fundamentals without reaping much reward in terms of structural transformation. Since the early 1990s, Latin America has considerably improved its governance and macroeconomic fundamentals, yet structural change in the region has been, if anything, growth‐reducing. Manufacturing and some other modern sectors have lost employment to lower‐ productivity services and informal activities.” This indicates that India needs to balance between structural changes and investments in fundamentals.
Figure: Typology of growth patterns and outcomes (Dani Rodrik, 2013)
India's space sector currently fits into Dani Rodrik's quadrant of high structural transformation, low fundamentals—a scenario of "episodic growth." This is because the sector has achieved rapid expansion and significant achievements, such as low-cost missions like the Mars Orbiter Mission (Mangalyaan) and Chandrayaan, driven by strong government support and cost advantages. However, it lacks the robust fundamentals necessary for sustained growth, such as a fully developed innovation ecosystem, sufficient private sector participation, and extensive R&D investment.
Indeed Rodrik’s work also suggests that in the early stages, growth is driven by rapid industrialization (i.e. structural transformation), which requires policies that differ markedly from traditional fundamentals. Countries that concentrate solely on developing broad-based capabilities often experience limited growth and may stray from the targeted industrial strategies essential for initial economic acceleration.”
Technology is not Just Technology
There is much to be agreed with Aqib Chaudhary and Ram Singh’s suggestion in a recent article on Policy Circle that India needs to focus on Indian capabilities to grow the space sector. After all, “technology is never just technology” I am picking this phrase from Peter J. Katzenstein's book “The Culture of National Security” where he cites Eyre, Suchman, and Alexander, who explain that technology is deeply enmeshed in social relations. In other words, Technologies are developed and deployed with specific objectives in mind that reflect societal values, goals, and concerns. These objectives are not purely technical but are instead deeply intertwined with social purposes. For instance, the development of nuclear weapons during the Cold War was not only about achieving a specific technical capability but also about achieving political deterrence and influencing international relations.
What specific objectives do we need our space sector to achieve, is something we need to define and communicate. So far, the national pride and signaling of our low cost tech-capabilities has been a clearly articulated objective that any member of parliament even with a limited exposure to the space sector would be able to articulate. However, if we want our space sector to contribute, for example to the agriculture sector, let us begin to publish data on how much did the home grown space sector contribute to Indian agriculture? And we should track this data annually, have a roadmap and assess gaps and progress.
For example, in a casual conversation with a space entrepreneur I heard them lamenting the fact that government grants for innovation in the space sector have an exact definition but a narrow bureaucratic understanding. “Innovative” is still what has been tried and tested in developed countries like Germany and the US and on an informal level bureaucrats still make grant decisions through such lenses. Although this is an anecdotal claim and by no means indicates that the bureaucratic outlook is uniformly myopic in this sector, yet, it is a legitimate perception of an entrepreneur who is operating in this sector.
Public Outlook towards Space Industries Could Be Better Than Their Outlook on Commercial Airliners
There is an important benefit in positioning the space sector in our social context – we will learn from our mistakes and use the sector more deliberately. Let me explain this from an observational anecdote. If you travel in budget airlines in countries where domestic airlines are a new phenomenon, you will notice the airborne crew insisting passengers to not unbuckle their seatbelt as they see kids running around when the seatbelt sign is on, and their parents frantically chasing them. I have seen even pilots making repeated announcements almost ordering people to remain in their seats while the seat belt sign was on, reminding me of an elementary school with a teacher unsuccessfully chastising students who could not pay any heed. Why, in some countries airline etiquettes are more in place than the others? My hypothesis is that countries where aircrafts as a transportation technology got introduced at an early stage, or where this technology grew organically, people in these countries went through a learning curve of understanding its risks, limitations, and challenges. In short, people in countries where commercial airlines were introduced early or grew more organically as an industry, have greater cognizance of the risks associated with travelling in the planes and with it comes a more thorough understanding of what it can do or cannot do, how it can be used or cannot be used. This in turn spurs more innovation and better regulations.
In India, we need to go through that learning curve with the commercial space industry. This means that our approach to the space sector should involve not just rapid expansion but also an emphasis on understanding its full potential and limitations. By integrating space technologies more thoughtfully into various sectors, such as agriculture, telecommunications, and disaster management, we can develop a more nuanced appreciation for how these technologies can enhance our economic and social well-being. Additionally, a deeper societal engagement with the space sector will help build a broader base of support and understanding among the public and policymakers, which is crucial for long-term success.
Lastly, it important to understand that technology is not a panacea. A technologist from Israel who was a water expert and a diplomat stationed in various countries to advice governments on developing water resources shared this nugget of wisdom with me. He highlighted that middle income countries, are often stuck in what is called the “middle income trap” because they think technology will solve all their problems. However, it is not just technology, but governance that actually solves problems. Technology should be in the service of governance and not the other way around. He recounted his trip to a village in Odisha where self-help groups used metered community water taps par excellence while experiments elsewhere had failed. The difference was the governance and management mechanisms put in place by the self-help groups. The same technology can lead to variable outcomes depending on the governance. This lesson also applies on the space sector. A focus on developing governance mechanisms is equally important as structural transformation (i.e. moving resources to the space sector).
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