The Copernicus Programme of the European Union is poised for growth. Spearheading the earth observation industry of Europe, Copernicus contributes heavily to the economic excellence of the Space industry.
Recognised as a leader of development, the earth observation industry is creating both social and economic impact at the global stage. The commercial earth observation industry is generating high-resolution and multi-spectral data that is unprecedented in both magnitude and scope. Since the launch of the first civil imagery satellite system, LANDSAT, countries globally have understood the need for satellite systems to support policy objectives for sustainable development, national security and climate change. In this regard, the Copernicus Programme, fondly known as ‘Europe’s eye on Earth’, is an Earth Observation Programme formed in collaboration with the European Union (EU), the European Space Agency (ESA), and the European Organisation for the Exploitation of Meteorological Satellites (EUMETSAT), and the member states. Also, known as Europe’s leading and world’s largest civil earth observation program; the satellites and in-situ sensors, are focused on monitoring the Earth and its diverse ecosystem to generate economic, social, environmental and strategic benefits globally thus creating significant economic impact of Copernicus.
Economic impact of the Copernicus
The Copernicus has four strategic components linked to its program which is inclusive of the Sentinel satellites, the ground and aerial based monitoring systems, ground segment, information and data management and core geo-information services that assure data continuity and complete coverage. Contributing to the ‘excellence of the European Space Industry’, the Copernicus caters to the needs of its users, primarily the European citizens through providing earth observation data for six thematic layers (atmosphere, marine, land, climate, emergency and security) and the development of supporting applications for the same. It is, therefore, no surprise why the Italian Research Council estimates the potential economic impact of the Copernicus program on the European economy to be worth EUR 30 billion ($35.25 billion) in addition to the 50,000 additional jobs that will be created.
In principle, the Copernicus data is available for use to every European citizen for free and, henceforth, the applications created by the data contribute to the buoyant growth of the economy. A study commissioned by the European Commission explored the key benefits of the Copernicus Program. Supporting applications in a wide variety of domains, it is estimated that the investments in the program shall increase to EUR 7.5 billion ($8.8 billion) while doubling the economic benefit derived to EUR 13.5 billion ($15.8 billion) from 2008-2020. It is also seen that of every EUR 1 spent from the public funds in the Copernicus activities, the value-addition to the whole economy is EUR 1.4 — a decent investment to benefit streak. It is also impressive to note that at present, more than 66% of the earth observation companies are exploiting Copernicus data in Europe, while, 27% of the companies are exploiting the Copernicus services. Moreover, more than 8 million Copernicus products have been downloaded on the Sci-Hub since September 2016. Does it not showcase the potential of Copernicus as a ‘Big Data’ hub? It most certainly does! With conflux of Big Data Analytics, Artificial Intelligence and Deep Learning, and innovations driving the earth observation industry, the Copernicus program is set to bring increased economic value-addition to the European economy!
Economic benefits from the intermediate user segment
Benefiting citizens ranging from researchers, commercial to private users, the global scientific community and most importantly the policy and decision makers, the exploitation of Copernicus-enabled products are bringing multiple socio-economic benefits in various economic sectors. These include urban development, agriculture, urban monitoring, insurance, ocean monitoring, oil and gas, renewable energies, forestry and fisheries, and tourism, among many others. In 2015, the economic benefits derived from the downstream market of Copernicus were estimated to be approximately close to EUR 28 million ($32.9 million) to EUR 54 million ($66 million)! This is expected to grow at an impressive rate of 31% per year as the Copernicus begins to fulfil the gap realised between the end user’s specific needs for tailored products and available solutions. As the Copernicus program expands, a positive evolution and bullish growth is expected in the end user segment, especially, agriculture, insurance and ocean monitoring.
Agriculture: Earth observation has played a defining role in agriculture as precision techniques using EO data began to emerge as early as the 1990’s. The major Copernicus applications in agriculture are precision farming applications, seasonal mappings of cultivated areas, irrigation management and drought monitoring, and food security monitoring. The typology of the users of Copernicus data and applications is balanced between the government and the private players. More often than not, the direct clients of the Copernicus products and services are agricultural cooperatives who further distribute these to the farmer segments they represent. In 2015, the EO downstream revenue segment related to agriculture was valued at approximately EUR 70 million ($82 million). It has been seen that the applications developed on the basis of Sentinel-1 and Sentinel-2 data have helped farmers increase their productivity and efficiency up to 20%. More so, the use of Copernicus data in agriculture has led to increased job creation, along with additional business opportunities. As the Copernicus makes a significant contribution to the efficiency of agriculture practice, the economic impact of Copernicus in the agriculture segment is estimated to be around EUR 9.2 million ($10.8 million) to EUR 13.7 million ($16.1 million) in 2015.
Forestry: Globally, 90% of the end users of EO products and services in the forestry sector is the public players. Similarly, the intermediate user of Copernicus data in the forestry domain is dominated by the public research organizations, government forest research operations and private players. Both Sentinel-1 and Sentinel-2 provide valuable spatial information for the forestry value chain and, therefore, about 11.5% of the total amount of EO data used by service providers in the forestry value chain is accredited to the Sentinel data. Furthermore, on the assumption that the growth in revenue generated by the EO imagery segment over 2015-2020 will be at a CAGR of 12.6%, it is estimated that the revenue generated by the Copernicus in the forestry sector will touch EUR 7.6 million ($8.9 million) to EUR 15.8 million ($18.5 million) in 2020. The launch of specialized platforms will enhance the impact of Copernicus for the forestry sector in the next five to ten years.
Urban Monitoring: Earth observation data is crucial for urban monitoring. The Copernicus applications for this segment include urban growth monitoring, 3D modelling construction, land use, change detection, environmental impact management, and transportation route mapping. The data from Sentinel 1-A has enabled the development of new products in urban monitoring while Sentinel-2 allows the Value-Added Service (VAS) companies of the sector to save time and money. In fact, it is estimated that approximately 15% of the revenues of VAS companies in urban monitoring is attributable to the Copernicus program. The global EO downstream market revenue for urban monitoring i.e. EUR 47.4 million ($55.7 million) in 2015 showcased an exponential growth rate of 500% from 2012 to 2015. The contribution of Copernicus to this itself has amounted to EUR 7.11 million ($8.36 million)! The future too is significant. The earth observation market for urban monitoring is expected to grow by 17% every year from 2015 to 2020. With the Sentinel-3 soon to offer Land surface temperature data in a maximum of three hours’ time, the Copernicus data too shall continue to grow in importance. The estimated value of Copernicus data for urban monitoring by 2020 is approximately EUR 12.6 million ($14.8 million).
Insurance: A recent trend seen in the earth observation industry is the use of EO products and services for insurance and (re)insurance activities. The data derived from the Copernicus is used for accurate risk modelling thus lowering financial risk. Copernicus is also seen as the enabler for the development of index products and development of new addressable markets. The applications include tracking and forecasting of natural hazards, computation of indexes for parametric products for crops and livestock insurance, tracking of potential floods to send early warnings, and identification of initial and potential fire departures. Speaking of economic impact, as of 2016, the benefit of Copernicus in the insurance and (re) insurance segment for the intermediate users has been limited to EUR 0.5 million ($0.6 million) to EUR 1.1 million ($1.3 million). However, the future is bright. It is estimated that the Copernicus-enabled revenue for the downstream market in the insurance segment is expected to grow at 64% per annum i.e. up to EUR 13.6 million ($16 million) by 2020. In addition, the benefit for end users i.e. the insurance companies is expected to be as high as 186 million.
Oil and Gas: The oil and gas value chain is the most private sector oriented value chain with mostly private end users. The largest share of value derived from the Copernicus data and products is derived from the Oil and Gas companies themselves. The potential value of Copernicus for the oil and gas value chain was already as high as EUR 115 million ($136 million) in 2015 of which EUR 107 million ($126 million) for the end-user segment. This revenue is expected to almost double by 2020 i.e. become EUR 312 million ($336 million) of which EUR 300 million ($352 million) will be for the end-user segment. The almost 50% increase is projected because of the higher penetration of Copernicus products and services which has been till now been low in the offshore fields and oil and gas companies. As the penetration soars, so will the revenue and the economic benefits that will be derived.
Ocean Monitoring: The integration of Copernicus data with ocean monitoring services and applications has increased productivity and caused significant cost savings. Sentinel–1 and Sentinel-2 data is being used extensively for various applications in ocean monitoring so as to measure water quality, detection of micro bacteria, mapping of fishing zones, monitoring of coastal erosion among many other applications. Also, the Sentinel-3 has technical specifications for ocean-monitoring related issues and will add significant commercial value to the segment. To further the dissemination of Copernicus in the Ocean monitoring segment, the Copernicus Marine Environment Monitoring Service (CMEMS) is set up inside the value chain. The CMEMS has about 5,000 – 6,000 users, 80% of which are public sector users who need the information provided on priority. On a global scale, the earth observation revenue generated by the ocean monitoring sector was approximately EUR 104 million ($122 million) in 2015, of which EUR 5.76 million ($6.77 million) to EUR 8.76 million ($10.3 million) can be attributed to Copernicus alone. Thanks to the Sentinel-3 mission, the economic impact of the Copernicus is expected to grow up to EUR 58 million ($68 million) in 2020.
The future is bright
The earth observation market value chain accounts for approximately 58% of the global space economy, thus bringing in significant economic benefits. At present, innovations in the earth observation industry are driven by the exponential rise in EO 2.0 players. Additionally, to leverage on the creative ideas coming from these new entrants, and to tap into the new user segments, the European Union has made a commitment of EUR 4.3 billion ($5.1 billion) to the Copernicus during the period 2014-2020. Evident from the economic impacts of Copernicus on the key user segments of the European region, increased investments mean sound economic benefits. The European Union already has cooperation agreements on data sharing with Australia, United States and the Gulf. A collaboration of such sorts could open up the Copernicus to the world market for data-driven products and services in global economic sectors like agriculture, ocean monitoring and urban monitoring. Such multilateral and bilateral agreements can increase the economic impact created by the program at a global scale. In the longer run, this will only create remarkable economic and scientific benefits for the global society, which could be a towering achievement for the Copernicus.
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