European governments support the research and development initiatives of space startups through grants, but such a funding approach does not create a competitive environment where emerging companies are encouraged to grow, company executives and investors said at a Space Tech Expo Europe panel discussion on Wednesday.
According to Sven Meyer-Brunswick, principal at Alpine Space Ventures, companies go from one grant to another without any business development pressure, stifling the creation of competitive market offerings.
Instead of awarding grants, Meyer-Brunswick and Daniel Biedermann, a partner at NewSpace Capital, recommended buying products and services from the space companies. The executives and other panelists acknowledged that procuring items from startups comes with uncertainties but noted that accepting some risks will enable European space businesses to compete with American counterparts, SpaceNews reported.
Meyer-Brunswick discussed the U.S. procurement approach, which focuses on managing risks instead of eliminating them. He said the Space Development Agency is developing a low Earth orbit constellation with products and services bought from various companies under multiple contracts as a way to manage risks.
Mirroring Meyer-Brunswick’s remarks, Isar Space’s Chief Commercial Officer Stella Guillen, who was also part of the panel, urged European governments to imitate how the United States has been using commercial partnerships and services contracts to help companies grow, citing the impact of NASA’s commercial cargo program on SpaceX.