Remoteness….occasionally a benefit

I’ve been a little unclear what to make of the Rocket Lab story.   Don’t get me wrong, I liked the idea that our regulatory systems can, on occasion, be sufficiently adaptive to cope with new and innovative industries –  even if it is far from generally true.  And I wish all the best to any New Zealander with innovations they succeed in taking to the world market, and if that includes rocket launches that’s fine.

But there was the nagging question of why such an activity would be taking place in New Zealand at all.  We aren’t exactly close to anywhere, let alone home to great centres of expertise.  But there were those government subsidies –  up to $25 million of taxpayers’ money to Rocket Lab, as well as the cost of the regulatory regime (15 to 20 bureaucrats in the “New Zealand Space Agency”).  And I recalled that the French launch their satellites from French Guiana without –  as far as I’m aware –  much else happening in French Guiana.

But there was an interesting article on Newsroom built around an interview with head of the agency, a mid-senior level MBIE official.   It answered some questions, and not in a terribly encouraging way.

There was the disarmingly frank acknowledgement of how little expertise MBIE has

The biggest challenge, Crabtree says, has been the “classic small government thing” of lacking expertise.

“We didn’t have the experience or technological depth, but the focus is on picking things up quickly but also working with international partners who can bring that to you…

“I set the challenge which was, can we move as fast as Rocket Lab?”

Where are the incentives to get things right, when the hype is all around accommodating –  and keeping pace with – Rocket Lab?  You can pick up lots of things quickly, but often you don’t know what you don’t know.    (And, to be clear, I’m not asserting a need for regulation for its own sake, and have no idea what specific regulation might –  or might not – be needed in this industry, but the general point holds.)

And then there was the answer to what New Zealand had going for it, aside from the cheque book of the put-upon taxpayer.

New Zealand has what Crabtree deems “a natural resource endowment” when it comes to space-related activities, such as a range of launch angles.

“You want to launch a rocket to the east, and you want to launch a rocket over the ocean, and you want that ocean to be relatively clear of ships, and you want the sky to be relatively clear of planes…

“There are very few places in the world that tick all the boxes.”

So that would be New Zealand, Madagascar, the Falkland Islands, and maybe Uruguay/Argentina?  Those great centres of economic activity, innovation and so on.   We have political stability going for us over each of those other places, but it scarcely sounds like the makings of  –  or even a marker of – a transformed economy, when the business has to operate in a place where nothing much else is.

Ah, but then there are the kids

Beyond the economic calculations, Crabtree hopes a booming space industry can encourage children to develop an interest in space and technology.

“Kids get interested in science either through dinosaurs or space, and we’ve had lots of dinosaur kids, but space hasn’t really had a fair go.”

The agency has been providing educational materials for schools to use, while universities also want to attract those keen on making a future contribution to the space race.

I guess at least the government is symmetrical –  we also subsidise the film industry which provides the most-frequent encounters with dinosaurs these days.

In my day, the Apollo programme, moon landings and all, was great for exciting interest in space, around the world.  Count me just a little sceptical that some rockets launching from remote sites on our east coast are going to make a material difference to the career choices of many New Zealand kids. Or that, if they did, many of the resulting –  higher value – jobs would end up in New Zealand for long.

Perhaps the industry can succeed here, standing on its own feet.  If so, I wish it well. But I’m a little uneasy about politicians and officials talking up, and then being pursued by, the hype.  Corporate welfare dollars all add up after a while.

7 thoughts on “Remoteness….occasionally a benefit

  1. Interesting piece, Michael. Some of the enthusiasm for governments subsidising film and rocket launches is to convince the public that we’re a technologically progressive nation that has a bright future. Unfortunately, neither the international film industry nor the domestic film sector here can sustain themselves even after 30 years of subsidies. I imagine the rocket industry won’t fare any better.

    One point: Do you mean “queasy” or “uneasy” in the sentence: “Perhaps the industry can succeed here, standing on its own feet. If so, I wish it well. But I’m a little easy about politicians and officials talking up, and then being pursued by, the hype.”?


  2. Probably both queasy and uneasy…but I had actually meant “uneasy” and have now corrected it. Thanks.

    I can see why this rocket launch business could conceivably prove self-sustaining, if the geography really is that important, but it is hard to believe there will be very much domestic value-added in that phase of the business. A bit like i-phones – most of the value-add is in the US, even if much of the assembly is in China and places like that.


  3. I am not close to this but my limited interactions reveal NZ does have some advantages about launch angles (due to geography) and available slots due to our relatively unpopulated airways and seaways. Satellite operators basically buy a ride on a launch vehicle for their satellite and the likes of RocketLab are in the business of providing that ride at a cost. They don’t provide the satellite; their customer does. Choice of launch partner for most launches is all about the grunt to depart earth and get the payload into orbit. That is simple physics.

    The barrier to a scalable businesss is that the large rocket operators (like the Ariane in French Guiana) can get a satellite into space for $10,000 per kg whereas RocketLab with their relatively small launch vehicles are costed/priced at $100,000 per kg.

    Their frequent launch slots are a definite advantage when compared to the crowded skies and seas off Cape Canaveral. Whether frequency and some particular easier to achieve orbits counts for enough to resolve the 10 fold economic difference remains to be seen.


  4. One small attempt at solving the “what can nz do” crisis
    Here is cornpone hayseed idea that I have had running around the grey-matter for over 10 years
    There is a lot of smarts running around in new zealand with wacky ideas that will never see the light of day – because the person with the idea is in a rusty od barn or workshop out the back of beyond at one end of the country while someone who just could be looking around for a solution to a problem that idea could be the answer to is at the other end of nowhere – or even in a tin shed out the back of Kazakhstan

    My idea is to have a government funded and operated searchable digital database behind a web-site where backyard inventors can post details of their invention up on the government-controlled web-site which then provides automatic world-wide intellectual-property protection/ Th3e anyone in the world can search the site looking for bright ideas v- chances are you are going to get 5 out of 100 hits. Academic engineers and university trained academics could moderate it


  5. In the last 20 years the government grants to the aerospace/aeronautical industry seem to have made rather terrible returns, typically making little to no difference except to the bottom line. One must ask what the value we get from giving money to any company that is well funded. Particularly now in Aerospace that nearly all the companies of any size seem to be foreign owned.

    Perhaps we should take slightly different approach. We must accept that as a small market / country sometimes government funding is the only way to achieve an industry of critical mass. But one company doesn’t create an industry, so maybe we need to double down on the government investment. If instead of giving grants, they brought launch slots & followed this up with contracting domestically to build satellites to launch on them (what they do is almost irrelevant so long as they do it well), it would allow NZ to be a one stop shop, rather than somewhere you send your satellite to be lobbed into space.

    Looking slightly in to the future, I would expect a loss of aerospace capacity due to a stagnate market size and modern aircraft requiring less work but more technically capable faculties. So the success of rocket lab is quite important in just maintaining the industry with in the country.


  6. Advantages of launches from NZ over the US or other places:
    1) Remoteness means more launch angles and more launch windows. They need exclusion zones for aircraft and boats during launches, and that’s easier in places where you inconvenience fewer others;
    2) The US regulatory apparatus is set up around giant expensive launches with big fixed costs. You need permissions from a half-dozen lettered agencies for a launch. In the context of launches costing tens or hundreds of millions of dollars, it can be done. But it leaves an opportunity for a place able to facilitate lots of low cost launches with simpler permissions.

    I’m a skeptic about government funding on this stuff, but huge kudos to MBIE for sorting a way to let this work.


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