Europe space spending is rising to unprecedented levels as the European Space Agency (ESA) confirms a €22.1bn budget from its 23 member states. The decision marks a 30 per cent increase in Europe space spending as governments and private companies race to secure strategic access to orbit amid global competition and geopolitical tension.
Higher ambitions for Europe’s space role
The new three-year budget will finance satellite launches for civilian and military use, alongside broader space programmes. Between 2023 and 2025, ESA spending stood at €16.9bn — making the latest figure a significant step up in Europe’s attempt to keep pace with the US, China and private giants such as Elon Musk’s SpaceX, who now dominate the increasingly lucrative space economy.
Europe’s intensified focus on space also stems from a push for greater strategic autonomy, particularly in security matters, following the war in Ukraine. Notably, the vast majority of Europe’s 2024 space expenditure — around 88 per cent — supported civilian rather than military applications.
A global space economy at record levels
Worldwide, the space economy reached a record $613bn in 2024, up 7.8 per cent year-on-year. Nearly 80 per cent of this came from the commercial sector, with governments contributing over $132bn. The US alone invested $77bn in national security and civilian programmes, including telecommunications.
These figures come from the latest Space Foundation report, covering data up to the second quarter of 2025. Analysts note that the rapid rise in space-related spending underscores the sector’s critical role in economic growth, national security and public interest.
ESA membership and growing investment
ESA’s 23 member states include Austria, Belgium, Czechia, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Luxembourg, the Netherlands, Norway, Poland, Portugal, Romania, Slovenia, Spain, Sweden, Switzerland and the United Kingdom.
Consultancy firm McKinsey estimates that the global space economy could reach $1.8tn by 2035, driven by technological backbone services such as satellites, launch infrastructure and applications including broadcasting and GPS navigation. The number of annual satellite launches has risen by more than 50 per cent each year from 2019 to 2023, while launch costs have fallen tenfold over the past two decades. Data prices — vital for global connectivity — are also expected to drop by around 10 per cent by 2035 as demand rises by roughly 60 per cent.
Connectivity, AI and the next decade
Key drivers include growing demand for global connectivity, increased reliance on navigation services, and expanding use of automated systems. The rapid development of artificial intelligence is also expected to accelerate the space economy further, with rising needs for data and infrastructure.
Five sectors — defence, logistics and transport, food and beverage, retail and consumer goods — are expected to generate more than 60 per cent of the sector’s growth by 2035. Many other industries are projected to reach multi-billion-dollar revenue levels as space capabilities expand.
Beyond economic returns, analysts say space activity will play an increasingly vital role in addressing global challenges, from disaster early-warning systems and climate monitoring to humanitarian response and broader societal wellbeing. Public-private cooperation will be essential to unlocking this potential.
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