In the last month, 2 of the 5 commercial satellite operators in Europe have changed ownership; Deimos Imaging was acquired by Urthecast (Canada) and yesterday Blackbridge announced that the business which formerly traded as Rapideye would be sold to PlanetLabs (US). Both these deals are “industrial” or strategic, meaning it is not just a question of changing financial ownership. What does this mean?

After these deals, Europe is essentially left with 2 companies which offer satellite imagery; Airbus and E-geos/Telespazio. Neither of these companies owns the satellites they operate but rather have exclusive rights to distribute data commercially. Whilst SPOT 6 & 7 are owned by Airbus, the Pleides satellites are owned by CNES, ownership is shared between Airbus and DLR for TerraSAR-X and the satellites operated by DMCii have many owners whilst Cosmo is owned by the Italian government and data rights lie with Telespazio.

Hence the only two independent operators in Europe have been acquired by North American operators. It seems to be a strong vote for European technology and constitutes a strong, positive message concerning the future market, but the European backers of both Rapideye (which went into bankruptcy in 2009 before selling to the Canadian investment fund Blackbridge) and Deimos have preferred to see a capital return rather than continue to be present in the EO market. As far as I am aware these are both 100% exits and neither retains a stake in the enlarged businesses.

Does it reflect a lack of vision from European companies or are the reasons more fundamental? It demonstrates a dependence on public investment which is not the case in North America. Both Planetlabs and Urthecast are private companies backed by venture capital. They are taking risk to enter the emerging market for commercial EO services with the vision that this will be one key element in the Digital market. Recall also the presence of Google which acquired the Skybox Imaging business last year.

Whilst the NGA has recently announced that it wishes to open discussions with the “new operators” such as Planetlabs and Skybox Imaging, they depend almost exclusively on imagery coming from DigitalGlobe which holds a unique position in the market and underpinned by anchor tenancy contracts with the US government. Nevertheless, DigitalGlobe is a private company, backed by private capital even if it is dependent on government contracts. It is free to take commercial decisions which, even if they may be influenced by them, are not blocked by government policy.

I should hastily state that I do not necessarily see it as a problem that European companies have non-European owners. Personally, I believe in the strength of an open market and external investment can be a “strength” rather than a “weakness” but it does mean that future investment decisions could favour non-European technology. The key objective is still jobs and revenues in Europe and our actions should be oriented to ensuring that this remains the case.

I have stated before that I strongly prefer the anchor tenancy approach as part of a public-private partnership to the shared investment approach adopted in Europe. I think this view is supported by the two acquisitions which are market transactions unhindered by state investment. In Europe, despite Copernicus being a European programme, policy is determined by a few nations with own interests at heart. This means that whilst the EU market may represent 450m people, it is fragmented into 28 parts unlike the US where there is a single, 250m people market.

At the same time, the attitude towards and availability of risk finance is much more conservative in Europe. A culture of risk-taking and private investment is needed and paradoxically, European government policies will need to change to enable this to happen. This is also evident in the highly fragmented market for value added services where over 95% of the companies concerned have less than 50 employees. These companies will be squeezed out of existence or will also be acquired by non-European companies.

The recent proposals from the EC to establish legislation on the distribution of high resolution imagery, despite their claims, would not have addressed this problem which requires the EU to act as a single customer not as a single regulator. The EO services market is still dominated by government interests but the different approaches adopted in the US and in Europe are having a strong impact on this market. Talks must now start about what action can be taken in Europe to ensure that European companies do remain players in this emerging part of the Digital Market.

Alongside the recent EARSC AGM, we organised a workshop to develop a discussion between industry and the EEE’s (European Entrusted Entities) on how we can work effectively together on the Copernicus Services. The EEE’s are those organisations which will have delegated authority from the European Commission to deliver the Copernicus Services. Basically this gives them the responsibility to manage and spend public funds; something which it is very hard for a private company to be able to do. In consequence, and to be clear upfront, there is no contention that the responsibility to procure services should be held by public sector representatives.

However, we have the objective to maximise the potential for the private sector to exploit Copernicus. This means that industry should be involved to the maximum extent possible and that long-term relationships should be developed between the EC, the 7 EEE’s and the EO services sector. We should like that companies are able to figure more strongly in the supply of the services and indeed that everyone recognises the obligation to ensure that adequate resources are continuously available to meet the Copernicus demand. Hence we invited all those concerned to come to the workshop for an open discussion.

Not all the services are the same and the degree of public and private sector involvement will be different for each. There is a great deal of difference between the set-up for say the local component of the land service where private service providers are heavily involved under contract to the EEA and the climate services where is very little private sector involvement today. Given the strong scientific and research base for climate change this is not surprising, but industry is already eyeing markets for climate information which should grow sharply in the next few years. Hence companies are very keen to work with the ECMWF and others to develop new products and to find new markets – together.

These new markets are potentially everywhere and whilst there is a vision that simply making Copernicus services products’ available will be sufficient, we do not agree with this approach. Firstly, companies wish to be masters of the products and services which they are offering and hence need to ensure that they have assured access to both data and to knowledge. This implies a direct relationship either as a supplier or as a dedicated partner. This should be managed through competitive procurement which demands sustaining competition which should not be between public and private actors which we consider is generally unfair competition.

I was recently at a workshop organised by the OECD which illustrates this for me. Strangely it was a presentation by NASA which triggered the discussion; I say strangely because the boundary between public and private activity is generally clearer in the US. NASA offer an African wide service showing the outbreak of fires. It was described as to how it was used, how a private sector user had been found and how a survey had been conducted amongst the users on what they would like to see developed further. One attendee asked how many companies were involved in the project to which the response was none but this was not considered to be a product of commercial interest as the resolution was not high enough. But, I commented, we shall never know if this is really the case since whilst it is a free “government” product no company will even look at it as the competition is too biased away from a private sector interest.

Now, this is not to say that it is right or wrong that NASA publish the product. It is purely to illustrate the issue. If the US government requires NASA to produce this product for whatever reason then they should of course do so and it should be available on a free and open basis. But then no company will consider investing especially if NASA (or any other PSB) looks to develop further to suit “the market”. It is a complex issue but one which is especially pertinent in the domain of EO services where many government bodies (public sector bodies or PSB’s) are rightly interested. It is for this reason we believe that a dialogue is necessary and a closer understanding which will reflect the reality of the situation as well as the interests of all parties. Let me also in passing just say that the site where this product can be found http://earthobservatory.nasa.gov/GlobalMaps/index.php is really nice - I like it a lot!

In an ideal world, we may well not choose to start from where we are today. But the origins of the technology in surveillance and scientific research (on the environment etc) has created this “dual-use” and “dual-interest” which we try to deal with. The focus on economic benefits and job creation as well as the digital society place great importance on this issue and we were very pleased that the workshop has at least opened the doors for discussions.

Last week we held the EARSC AGM and organised several events around it. It was a pretty intensive 2 days - as were the weeks leading up to it - but we had some great discussions and there is a lot to write about! I am not going to attempt to cover everything in one go so watch out over the next week(s) for further articles and news.

The evening before the AGM we held a workshop where I presented the first results coming from our 2015 industry survey. We closed off collecting data in May and are really just getting started with the analysis. Initial results confirm continued growth in the industry but it will take a few weeks more before we are ready to start publishing them.

In the evening we had our now annual cocktail at which we presented the EARSC Company Achievement award for 2015. The winner was GAF but it was very tight between them and the other finalists. All 5 finalists (Blackbridge, Deimos, GAF, GMV and Planetek) could have been worthy winners but the laureate and EARSC award goes to GAF who really merit the recognition of their peers in being nominated winners. GAF will celebrate their 30^th anniversary later this year and were among the first few companies created in the 1980’s to exploit the new remote sensing technology.

After the AGM we had yet another workshop which according to everybody I spoke to afterwards was really appreciated. One attendee even described it as maybe the best meeting that they had been to! It brought together representatives from each of the 7 EEE’s (European Entrusted Entity) and industry to address the question of how to work more closely together on Copernicus. Industry wishes to become more involved and the EEE’s (which are the public bodies with delegated authority from the EC to manage the procurement of the Copernicus Services) will need the industry to be active and supportive in order to deliver their missions. Hence it was agreed that there is a mutual interest to work together. Nevertheless, there are a lot of barriers to overcome which is the purpose of the discussions.

At the AGM we launched the EARSC Certification scheme which is designed to help companies obtain a management certification specifically adapted to the needs of the EO Services industry. The goal is to give more confidence to customers that companies are operating in a professional manner. The EARSC scheme is applicable to all sizes of company and allows the possibility of certification to scheme requirements with or without full ISO9001 compliance. We consider this to be an important step in bringing the industry out of a research and development culture into an operational and professional industrial sector. Full details can be found on our web site along with some details of the companies which have been testing it and, in the future a growing list of the qualifying companies which are recognised.

The scheme also includes a DRD – Document Requirements Definition – which provides a template for specifying products. It is open for all to use and we encourage companies and customers alike to make use of it.

Certification is a subject which we shall continue to work on and over the next few months we are studying how we could start to tackle the difficult topic of product certification. The study has been initiated and should report by the end of the year. Meanwhile we continue to advance to help the EO services industry develop through all the initiatives which I have mentioned above. I’ll come back to talk more about these in the near future. 

We have been claiming for some time that it is essential to develop a formal dialogue between the industry and key decision makers; particularly those in the European Commission but also with ESA and Member States. Up to now, industry views have only been provided through specific meetings, corridor talk and only in an informal fashion.

Finally, the EC is prepared to establish a mechanism to engage with the industry and discussions have started about establishing a "structured dialogue" around space. As an input to the thinking on this we have developed some views on what are the key lines that need to be discussed. These are contained in our latest position paper on "Developing the Downstream EO Services Sector in Europe". The paper can be downloaded here or from our web-site where all EARSC position papers can be found.

We have categorised the

1.  Leverage Copernicus and improve the public-private interface

In order to allow the private sector to play a full role in Copernicus and to develop the 48,000 jobs which are foreseen by 2030, companies need to have a clear role with respect to the public sector bodies. This is a critical issue for us which must be addressed. We are doing our best to move forward and have a meeting organised on 17th June in Brussels when, for the first time, all the Entrusted Entities with delegated authority from the EC to deliver the Copernicus Services will be present to debate how to address this.

2. Research and Development

We consider that the European R&D programmes do not take sufficient account of industrial priorities. A large number of good projects do not result in exploitable products because there is a lack of industrial input during the research. This should be addressed through an overall strategy for developing the sector which can lead to focused R&D actions with a strong industrial interest.

3 Market Structure and Uptake

One of the biggest barriers facing the European industry compared to others is the lack of a single home market. Because it is fractured and because the majority of customers are public sector this leads to an industry which is fragmented. A more co-ordinated purchasing regime could help to overcome this weakness and help the industry organise itself.

On the question of the industry, we are just completing the latest survey and I'll write about that shortly. We are starting to analyse the results which - as always - are very interesting. I look forward to sharing them in due course.

Since I last wrote, one month ago, I have traveled to Japan with a group of EARSC member companies to explore co-operation with Japanese companies. A series of B2B meetings were organised with the support of the EU-Japan centre for industrial co-operation covering all aspects of space technology. I was pleased that EARSC could support this initiative as it has been a goal both to help companies develop new export business and to organise a first EARSC trade mission.There was a good interest all round and some optimism for new partnerships linked to EO services.

The business part of the trip was quite successful with some good and constructive meetings taking place over the 3 days which can hopefully lead to business for the companies concerned. On the other hand, on a personal basis, I extended the business trip into some holiday which was rather less successful as I spent most of the second week in bed with a strong dose of the flu. It is probably only the 5^th time in over 35 years of business I have extended a business trip to take holiday and was a good reminder of why I do not normally do so!

Whilst I was away, I noticed that ESA has published an interesting call for commercial partners in space exploration. “Calling new partners for exploring the moon and Mars”. The announcement was for a call for ideas to "assess how companies could join forces with ESA in novel partnerships".

This is excellent and in the domain of EO we also need to find new ways of doing things. Is this a model? I guess that there are two views; one that says commercial ventures are best done away from any constraints of agencies or governments and the second that says, given the strong interest of governments and their agencies in the sector, we should find new ways to bring together the strengths of both. I definitely fall into the latter camp and take the view, for example, that the public sector investment in Copernicus represents a great opportunity for the private sector. Nevertheless, we see the heavy constraints that this brings and the difficulty to find the modalities and instruments to make it work.

New partnerships and ways of working together are needed and in particular a recognition from the governments that their role is to create the right environment for success. What does this really mean? It depends on what we understand by the government task!

I would see two key responsibilities here. The first is to ensure that the policy makers have the right tools and information available on which to base sound design and implementation of policy; we can think about security of the citizen and a sustainable environment. The second is to create conditions for economic well-being; we can think about employment and economic security of the citizens. Is it then necessary for governments to own the system to deliver this information? Not necessarily if the delivery can be assured by other means; ie through long term contracts etc.  

Yet various views exist on what this can mean and hence a dialogue is necessary to find the right balance. This is normal as various interests exist and as I wrote in an earlier blog "New business models (revisited)", sometimes both time and aid is necessary to adapt from an existing status to a new one driven by new technologies, ways of doing business etc. We are pleased to have started a number of discussions with agencies responsible for the delivery of Copernicus services and are optimistic that this can lead to some long term planning and realistic partnerships. But this must be developed into a broader platform and for this we definitely need to work with both ESA and the EC.

Hence, I welcome the approach by ESA reflected in the announcement for space exploration and look forward to developing ideas on how Europe can become more responsive with a stronger role for the EO services industry to prepare for and to lead change. This will mean taking some decisions but together we can all benefit. The first decision should be to construct a means for structured dialogue between the stakeholders as a prelude to creating new partnerships in Europe.

The EP held a stakeholder meeting on Wednesday to gather views on the High Resolution directive which the EC has proposed. The EP rapporteurs had called the meeting to get a better understanding of what the directive would mean for the industry.

I guess most people are aware but the EC looks to introduce legislation to regulate the internal market for the dissemination of high resolution imagery in Europe. Each Member State is required to introduce a law in the case that a satellite operator is based in their country. The law is intended to bring transparency to the process when there are security controls on the distribution of data.

EARSC position has always been quite neutral in that we do not see a strong benefit from the legislation. It is true that transparency may be useful as could a common understanding in all MS as to where the security threshold will apply. In this respect, if Digital Globe are able to distribute 25cm without security controls then we feel that EU operators should be given the same opportunity. However, we have not had any company come to us saying that they think it will improve their business; rather a few are concerned it could have negative consequences.

Overall, we have said that it could be useful provided that there is no additional cost, nor additional delays in company’s ability to supply imagery and hence we consider this is more an issue for MS to discuss than industry since it touches on security issues. In general, from an industry perspective, we should like to remove as much legislation as possible to help companies do business. This can help if it sets the security limits lower and hence frees up imagery down to sub-metre resolutions to be disseminated freely (note NOT for free!!).

The MEP’s seem to be generally in favour of the proposal based on their understanding / belief that it will open up the internal market. The EC are already convinced and it remains for the Council ie Member States to decide. Here there has been a strong division of opinion with UK, NL and others strongly opposed, Germany in favour and others asking for more information on the consequences (ie Impact Assessment).

From our perspective, we feel that there are more important issues to spend energy on. We support the process and are providing detailed comments to the EP on which to base their opinion. But let us quickly move on to address the question of how to enable the EU industry to capitalise on the public investments made into Copernicus.

Last Tuesday I was at a workshop on GEO in Washington. It was billed as A Roundtable Discussion on Advancements in Information Technology and the Next Ten Years of the Global Earth Observation System of System, but the main objective was to discuss the private sector participation in GEOSS.

Despite this, the majority of attendees were public sector representatives and, without counting, there would have been about 10 private sector people present out of around 40 in total of which we were 4 from Europe. A similar meeting called by the EC last September has attracted an audience of around 80 people with 25 from the private sector; none from the US.

Clearly, bringing private sector interests together into GEO/GEOSS will be a complex matter given the diversity of interest, the different understanding of what “private-sector” means and particularly its international nature. It is hard to imagine US companies traveling to Europe and vice versa or elsewhere in the world without a strong motivation.

It seemed that, amongst the US companies, there is a similar lack of understanding of what GEO is and what its objectives are, as had been the case for those in Europe at the EC meeting. There was a very patchy appreciation of how GEO could help the private sector and vice-versa. This was certainly picked up by the US-GEO organisers who concluded that GEO needs to employ some communication specialists.

Nevertheless, overall, many of the conclusions were the same;

• Avoid competition between GEO and private companies
• Reach out to users to understand what they want
• Who are the “users” of GEOSS?
• GEOSS can be a conduit from EO providers of data and information towards the public sector stakeholders.
• Need to get more than just scientists involved in the service provision.

In discussion, we agreed that the users of GEOSS are the public sector stakeholders, but the world has changed greatly since GEO was founded (in 2003) and the impression remains that, today, its stakeholders have divergent ambitions for what it should become. As industry, we should start to become clearer in what we should like GEO to do and especially how the public and private sectors can engage in a global context.

Last Monday, I was at the information (half) day organised by ECMWF regarding the procurement of the atmosphere and climate services for Copernicus. I wish to thank them for organising this event and making the effort to promote and explain the procurement process.

Most will be aware that at EARSC, we have been promoting the necessity to involve industry as much as possible in the supply chain for the services. Today, the level varies widely between the Land services where there is a good industrial participation and others particularly the atmosphere, climate and marine where industry has not been really involved. Our goal is to change this recognising on the one hand that there are competences in industry that can and should be employed whilst there are capacities which only public bodies such as ECMWF can supply. This applies to all the Copernicus services and it is clear from the large number of meetings being planned already that we shall need a co-ordinated approach.

We seek to develop a partnership where the “optimum” arrangement can be deployed combining the strengths of industry with public bodies. Hence when ECMWF first contacted me at the end of last year, I was delighted to discuss with him how we could start to develop this arrangement. The information day was a very important first step and we now will work out how to establish a roadmap between the public and private sectors.

Mercator Ocean have also contacted me and I have now had 2 meetings with them to discuss the way forward. Their approach is different and a web-x presentation took place last Friday to start to explain their plans. Again we welcome this and the plans for future meeting s which bring transparency and opportunity to the process.

The discussions will not be limited to short term actions but must embrace planned R&D as well as promotional activities. The plan must show how to evolve from the current situation to one where a greater industry involvement becomes possible and perhaps even more importantly a stronger competitive landscape to ensure good value for the public sector and innovation in the private sector.

I very much hope that all the other EEE’s will follow a similar approach and look forward to discussing with them in the near future.

For the last 2 days I have been at the annual space policy conference in Brussels. As usual it has proven to be a very useful event to gather the thoughts of the political influencers and deciders but also to meet with so many friends in the space and Brussels communities. Several messages emerge for me which I wish to capture and share.

Firstly, some interesting details concerning H2020 and Copernicus where Philippe Brunet was very clear that projects can extend as far as in-orbit validation and demonstration of application capabilities. This should be very much welcomed and we need to develop more ideas on what that could mean for our sector.

On Copernicus, there were some commitments to ensuring that the data would be available to everyone on an equal basis no matter where they are in Europe. We have been asking for this on behalf of the industry but whilst there have been many good words, the funding to make this possible has not been available. We can only hope this may now change.

The dialogue between policy makers and industry will be developed further, initially in the context of H2020 to understand better industry needs. EARSC will be active in gathering and conveying the views and recommendations for the EO services industry.

In this respect, we need to raise the level of the debate which we engender. There are powerful trends influencing the sector at the moment and we must remain vigilant towards the development and positioning of the European industry. We have much to offer and many opportunities emerging but unless we adapt with the support of European policy makers in Brussels and in member states any competitive advantage risks to be lost. It should be an interesting period!

In our last industry survey in 2013, we found that around 65% of the European EO service companies were micro-enterprises ie employing less than 10 persons and that 95% were SME’s employing less than 50 persons. We found this a very interesting result and use it to argue that the sector is quite young and fragmented.

But looking recently at Europe-wide figures, maybe the sector is not so un-characteristic after all. Indeed the percentage of European micro enterprises and SME’s more generally are higher than we found in 2013. The latest SME report from the EC shows 99.8% companies in Europe are SME with less than 250 employees, whilst 92.4% are micro-enterprises compared to our 1% and 67% respectively (see table below).

We are just starting the new survey and we shall see what results this delivers. In 2013 we “found” a total of 319 companies in our sector. Already our database in 2015 contains around 50% more companies that we address with our survey and since we are more aware of the larger companies it is sure that a large proportion of the new additions are micro-sized. I expect we shall see results which are closer to the wider population of companies.

SME’s and especially the micro-enterprises are especially important in creating new jobs. At the launch of their report in 2012, the European Commission reported that 85% of net new jobs¹ in the EU between 2002 and 2010 were created by small and medium sized enterprises (SMEs). This figure is considerably higher than the 67%-share of SMEs in total employment. During this period, net employment in the EU's business economy rose substantially, by an average of 1.1 million new jobs each year. These are the main results of a study on the essential contribution of SMEs on job creation.

But in 2013, the number of SME’s fell by nearly 1% with the strongest decline in the micro category. So net creation of new enterprises fell below the rate at which earlier ones were failing. I hope, expect that in the EO services sector this is not the case and the numbers are still rising quite strongly. We have launched our 2015 survey and we ask that all companies respond and if by chance you have not received a request to do so, please let us know at secretariat@earsc.org.

How often have we (the older generation of which I am definitely part – a baby boomer) been accused of spending our children’s heritage; of using all the resources and polluting the earth on which we live? It seems to be a quite regular refrain but let us put it into perspective. I came across this delicious piece the other day written by Dennis Gartman and circulated by John Mauldin.

“Checking out at the store, the young cashier suggested to the much older lady that she should bring her own grocery bags, because plastic bags are not good for the environment. The woman apologized to the young girl and explained, "We didn't have this 'green thing' back in my earlier days." The young clerk responded, "That's our problem today. Your generation did not care enough to save our environment for future generations." The older lady said that she was right – her generation didn't have the "green thing" in its day. The older lady went on to explain: “Back then, we returned milk bottles, soda bottles and beer bottles to the store. The store sent them back to the plant to be washed and sterilized and refilled, so it could use the same bottles over and over. So they really were recycled. But we didn't have the ‘green thing’ back in our day. Grocery stores bagged our groceries in brown paper bags that we reused for numerous things. Most memorable besides household garbage bags was the use of brown paper bags as book covers for our school books. This was to ensure that public property (the books provided for our use by the school) was not defaced by our scribblings. Then we were able to personalize our books on the brown paper bags. But, too bad we didn't do the ‘green thing’ back then. We walked up stairs because we didn't have an escalator in every store and office building. We walked to the grocery store and didn't climb into a 300-horsepower machine every time we had to go two blocks. But you’re right, we didn't have the ‘green thing’ in our day. Back then we washed the baby's diapers because we didn't have the throwaway kind. We dried clothes on a line, not in an energy-gobbling machine burning up 220volts. Wind and solar power really did dry our clothes back in the early days. Kids got hand-me-down clothe s from their brothers or sisters (and cousins), not always brand-new clothing. But you’re right, young lady; we didn't have the ‘green thing’ back in our day. Back then we had one TV, or radio, in the house – not a TV in every room. And the TV had a screen the size of a handkerchief [remember them?], not a screen the size of the state of Montana. In the kitchen we blended and stirred by hand because we didn't have electric machines to do everything for us. When we packaged a fragile item to send in the mail, we used wadded up old newspapers to cushion it, not Styrofoam or plastic bubble wrap. Back then, we didn't fire up an engine and burn gasoline just to cut the lawn. We used a push mower that ran on human power. We exercised by working, so we didn't need to go to a health club to run on treadmills that operate on electricity.” But you’re right; we didn't have the ‘green thing’ back then. We drank from a fountain when we were thirsty instead of using a cup or a plastic bottle every time we had a drink of water. We refilled writing pens with ink instead of buying a new pen, and we replaced the razor blade in a razor instead of throwing away the whole razor just because the blade got dull. But we didn't have the ‘green thing back then. Back then, people took the streetcar or the bus, and kids rode their bikes to school or walked instead of turning their moms into a 24-hour taxi service in the family's $45,000 SUV or van, which cost what a whole house did before the ‘green thing.’ We had one electrical outlet in a room, not an entire bank of sockets to power a dozen appliances. And we didn't need a computerized gadget to receive a signal beamed from satellites 23,000 miles out in space in order to find the nearest burger joint. But, isn't it sad, how the current generation laments how wasteful we old folks were just because we didn't have the ‘green thing’ back then?”

I have to say that I do recall many of these things myself. We also had the equivalent of the local recycling centre come round to us in the form of the rag and bone man with his horse drawn cart. I recall being sent out to collect the waste from the horse to fertilise the vegetables which my father grew; so recycling was complete!

I just wanted to share this with you.

Last Wednesday (20^th) we held our 2^nd workshop looking at the question of certification for the EO services industry. At the 1^st workshop in April 2013, we had agreed to take two steps:

1. To publish a document which gives a template for products specifications which any EO service provider or their customer can use.
2. To trial a low-cost scheme whereby companies can certify their management systems. The EARSC scheme would complement a more stringent ISO9001 certification.

As a result, we have published a DRD (Document Requirement Definition) which provides a template for product specifications and we have trialled the scheme through an open call to EARSC members. The first has been used and tested by the EO4OG projects in generating some 96 EO product sheets for the oil and gas industry.

At the 2^nd workshop we heard from the 4 companies which had responded to the call which we put out last year; Ansur, Flyby, Planetek and Stevenson Astrosat all reported their satisfaction at the trial and encouraged it to be implemented on a wider basis. Lloyds Register QA, an auditing body which had been following the trial and the scheme, reported that the scheme is viable and that they are interested to become the first certified auditors for the sector.

We had a useful discussion on their reports which led to the conclusion that we should now make it operational and run by EARSC which we shall now examine further over the next few months.

One issue which we have to look at is whether this scheme should be open only to European companies or whether we should also offer it globally. There are advantages and disadvantages both ways and I should not wish to presume a decision which hopefully will be taken early next year.

It was also agreed to take the first steps towards a scheme to offer some form of validation scheme for products. This is a complex subject but is also starting to be of more interest to customers. Meetings which I participated to either side of the Certification workshop both considered this topic.

The day before, a workshop took place at which the results of 4 studies were presented to representatives of the oil and gas industry. The EO4OG projects have produced the 96 EO product sheets which can help meet the challenges of the O&G sector. These can be picked up and used by any O&G company wishing to buy a service so a process which “validates” the capacity of the EO service provider to meet the specification would make procurement easier.

On the following day I was invited as an advisory board member to hear and comment on the progress of the MELODIES (Maximising the Exploitation of Linked Open Data in Enterprises and Science) project (an FP7 project). It is an interesting and unusual project in its structure which includes 8 different EO applications using data, and especially linked data, from open sources. Given the diversity of these sources the question of provenance of the data and algorithms and the validity of the processing is something being considered as a transversal issue to all 8 applications. I am hoping that the MELODIES work may help us get some insight regarding product validation for our work which is planned to be reported at a 3^rd workshop targeted for end 2015.

I was reading the other day about the how some of the new business models which are growing around the internet and it led me to think about the comparison with changes in the EO services sector. In a very general way, we are seeing low-cost businesses competing with full-priced, higher-performance ones and we are seeing individuals and businesses using existing, paid-for assets to supply their customers at marginal cost.

In two sectors this is very marked.

• The existing hotel business is being challenged by internet sites like Airbnb which allow anyone to make some money out of their spare room. Hence an asset, in this case the spare room, which has no direct cost is competing with hotels with a much higher cost base driven by legislation on insurance, health and safety etc.
• The taxi business is being challenged by Uber, Lyft and other sites which allow anyone to use their own car to pick up and depose passengers. Whilst there are some obligations, the individual does not have the legacy costs of a taxi business such as their licences or their invested time in “the knowledge”.

The likes of Uber, Airbnb are allowing individuals the freedom to make some money in their spare time using assets which they already own ie a house, a lease on an apartment, a car but this is threatening traditional business models. The story I read was about a small hotel, just outside a large town, that has seen its business drop by 35% in the last two years; they consider that this drop is due to Airbnb and similar sites which are creating more lodging in the town and hence taking away some of the marginal business that the small hotel gains. The hotel also uses airbnb but of course room rates are driven down. All good for the consumer of course.

The hotel has to adapt its business model but with fixed costs to cover they can only go so far unlike the house or car owner who already owns their asset and whose room rate is set essentially at marginal cost. But the playing field is not level because each of the professional businesses whether it be hotel or taxi have regulatory costs that the individual does not have as they are required to hold licenses to operate and to meet safety and insurance conditions. Uber drivers are obliged to hold adequate insurance but they are not licensed in the same way that traditional taxis are. Indeed, it is various regulatory measures from passing the knowledge in London to buying a license from the local authority which created barriers to entry that the new business entrants are breaking down.

In both cases, the competition is somewhat unfair but is good for the consumer as, in accordance with economic theory, prices are driven down towards the marginal cost. But the social cost may be high as the older businesses are forced to adapt or even fail since they cannot cover their legacy costs. Change will take time and transition away from the unfair situation should be ordered rather than purely “let the market decide”.

We are seeing something similar in the EO services market where, over the last 12 months especially have seen significant changes with three major trends:

• The move to much higher resolution in the commercial market with the opening up of (non) restrictions from US suppliers down to 25cm
• The advent of new business models bringing low-cost systems to the market offering what is still high resolution data at around 1m.
• The launch of Sentinels with a free and open data policy reducing data costs for moderate and low resolution data.

However, the market for hotels & taxis is predominantly a consumer market where cost is a first consideration and service, quality etc are secondary, whereas most EO services are sold to business or government customers where price is often a secondary consideration after the quality and reliability of the service. This is not to say that price is unimportant but that a professional customer will be concerned with the “specification” where most consumers are more taken with the “features”. This is a significant difference.

I think that in the consumer market, the wave cannot be stopped and that the drive to find cheaper and more democratic business models (Uber, Airbnb) is unstoppable. The consumer will benefit from lower prices for equivalent service and, through smart legislation to ensure a level playing field with more traditional businesses, we consumers shall get wider choice and better service. Overall, the market will be controlled by consumer protection laws.

In the business market the situation is different and is one reason why we are working to introduce a certification scheme. Rather than a legislative basis we would prefer an industry-led scheme in which the customer has the choice, allowing EO service providers to present themselves better to professional customers. Nevertheless, this should not create large barriers for new companies to enter the market and hence we consider it important to keep the costs of certification as low as possible. 

Last week I spent a very stimulating 2 days at the 8th Irish Earth Observation symposium (IEOS2014). I was impressed at the organisation and strength of the EO community over there. Tim McCarthy had done a great job to bring together around 120 experts from academia, research institutes and agencies, public users and, with the aid of Barry Fennel, from industry. I was told that it was by far the largest symposium which had been held. In addition there were trade exhibits from several organisations. Both Techworks Marine and Treematics impressed me with their business ideas,.

It is good to see this sort of meeting and maybe as EARSC we shall try to attend more. I am not aware of such community meetings in many countries so would be pleased to hear about any which you might be involved in. Whilst EARSC is a European organisation, where there is no local industry association we can stand in at the national level. We have recently played this role in the Netherlands and helped the local industry construct a new programme.

In Ireland, they would like to establish a Collaborative Ground Segment as part of the Copernicus programme. It seems to me that this is a useful step since access to the data is far from yet being assured. A national CGS acts as a focus for all the actors and whilst there is the enthusiasm in Ireland, they still search for the next step to take this forward into a national strategy since there is no level of political support. There is a strong academic interest but this maybe goes along with the fact that the Irish participation to ESA comes under the Ministry of Jobs, Enterprise and Innovation. Hence a CGS could help rally the various interests and provide a lever for growth on the back of Copernicus.

How to establish a national strategy was a key question addressed during the symposium. The largest panel to which I have ever participated - 37 people in total - discussed the question showing good buy-in from the whole community. It was agreed that a political interest must come first and hence the case must be developed. The ACEOBS concept proposed last year can form the hub of a strategy with a progressive approach to putting it in place. Given that Copernicus is designed to benefit the whole of Europe by providing crucial geo-spatial information to national administrations, we consider that an industrial policy is needed to go alongside the public investment. At EARSC we fully support the Irish industry and the wider EO community to establish a national strategy and are ready to work with any other national organisation which wishes to put a strategic plan in place, as one way of helping the industrial sector to grow.