A sky full of eyes – Commercial opportunity in Earth observation
by Jaap Kalkman, Adnan Merhaba, Matteo Ainardi
November 2018

600+ Earth observation satellites are constantly keeping an eye on us from space – is there a commercial opportunity in Earth watching, and how can companies play in this space?

The Earth observation satellites are orbiting our planet, collecting data and images, as well as monitoring and tracking changes
In eight executive briefing series, Arthur D. Little shares key insight into the commercial opportunity in Earth observation and how companies can play and win in this space. We look into:

  • What is Earth observation, and what are its key applications?
  • What is driving the interest in Earth observation, and is there a commercial opportunity?
  • Where is the sector headed?
  • How to ride the Earth observation wave and win?

 


 

Next edition: Earth observation applications

Analytical solutions based on Earth imagery are used across a wide range of industries, promising high impact and disruptive changes

  • Companies are building analytical services based on Earth observation imagery, with different applications across industries
  • Defense and government applications are still a key source of demand; however, use cases in other industries (insurance, commercial, etc.) are gaining traction 
  • Early adopters tend to be from technology-exposed industries 
  • Customers are increasingly demanding solution-based services (e.g., intelligence, supporting decision-making) rather than pure image-based products

Next edition: Market value & key drivers

Cheaper access to space and advances in data analytics will continue driving the double-digit growth of the Earth observation sector

The Earth observation sector is expected to continue its double-digit growth, driven by:

  • Availability of cheaper SmallSat technologies and decreasing costs of launching and operating satellites, which are making commercial solutions more viable
  • Advances in data analytics and artificial intelligence that make Earth observation solutions more accessible and enable the emergence of new applications across industries

Next edition: Investment dynamics

Investor interest in Earth observation start-ups has significantly increased, driven by the expansion of potential use cases and range of clients

  • Investor interest in Earth observation has significantly increased over the past 5 years:
  • Over USD 220 million was invested and over 50 new start-ups were set up 
  • 2017 was a boom year, with a ~9x increase in invested capital compared to the average of the previous 4 years
  • Investor interest is driven by expansion of use cases/ applications and potential customers (e.g., going beyond government-backed demand)
  • New start-up companies are focusing on data analytics

Next edition: M&A trends