Two reports, by Istat and by See Lab, offer very different estimates. On the need to build shared standards to assess a rapidly expanding economy

BY EMILIO COZZI AND MATTEO MARTINI

Looking at two reports produced by prestigious institutions, the question naturally arises: what is the real value of the space economy in Italy?
The first report, presented last December 9, is the result of a collaboration between the Italian National Institute of Statistics (Istat) and the Italian Space Agency (ASI). It quantifies the national space economy on the basis of production: €8 billion, employing just over 23,000 people, with an added value of €2 billion, equal to 0.1 percent of GDP. An important note: the figures refer to 2021 and were produced at Eurostat’s request as a pilot study, Istat explains.

Productivity and internationalization

The research identifies a vibrant ecosystem: “Labour productivity about 65 percent higher than that of non-space productive units (€84.8 thousand per employee versus €51.3 thousand),” the report reads. “Firms operating in the upstream segment show a greater propensity to participate in international markets compared to the rest of productive units: 77 percent higher than that observed in the rest of the economy. With regard to exports of goods, upstream firms also show a higher number of destination markets (11.6 countries versus 7.5) and greater product diversification (13.1 products versus 9) compared with other productive units.”

From a territorial perspective, “just under 90 percent of space activity is concentrated in the Centre and North-West of the country, employing overall just under 12,000 workers. The regions that contribute most to the formation of added value and employment are Lazio (€0.8 billion in added value, 8,000 workers), Piedmont (€0.2 billion, 2.2 thousand), and Lombardy (€0.7 billion, 8.3 thousand).”

It should be stressed that, unlike a quarter of a century ago, in space everything can change in four years. And indeed it has. Just think of Starship tests, the arrival of Blue Origin’s New Glenn, the growth of Starlink; in Italy, investments under the PNRR for space factories (which four years ago were only an idea); the successes of D-Orbit and Argotec; IRIDE; and Avio’s new propulsion systems. That said, Istat has its own timelines for accurate and scientifically rigorous analyses, which is why the next report, referring to 2024, is expected in 2027.

How the space economy is calculated

The problem reflects one of the biggest challenges of recent years: calculating the exact value of the space economy.
The differences between the two reports become clear when looking at the same reference year, 2021. “The estimated values for the space economy amount to €3.4 billion in revenue and 13.2 thousand employees in 2021,” explains Simonetta Di Pippo, director of the SEE Lab, in a note less than half the value indicated by the Istat/ASI dossier. According to the expert, this may be due to different factors. The most obvious is the reference sample. “The ASI/Istat study includes, in addition to private companies and entities, some categories of public bodies (for example universities and research centres). SEE Data, on the other hand, focuses exclusively on the private sector and, at most, on public-private partnership (PPP) initiatives. Moreover, the inclusion or exclusion of specific activities is not based on a shared definition, which further affects the reference base and the results.”

See Data uses a bottom-up approach, based on estimating the contribution of each individual company. In theory, the two approaches should be coherent and complementary, but in practice they inevitably generate different numerical results. Istat also uses a bottom-up approach, confirms Federico Sallusti, senior researcher at Istat’s National Accounts Directorate and head of the “satellite account” for the space economy: “Our method is based on company microdata. In identifying which companies fall within the perimeter of the space economy, we use a series of methods that allow us to define also the share involved. A large company such as Leonardo, for example, also does space, but not only that. Within the manufacturing firms included in our survey, we can define exactly the space share and the non-space share based on the codes contained in the guidelines.” The guidelines for defining the perimeter of the space economy are those indicated by Eurostat and ESA, the OECD, and the US Bureau of Economic Analysis: a list of product codes and economic activity codes.

Here things become more complex: classifications are both by product and by economic activity. “When we have product information, we go into detail; otherwise we work through activity codes and, through a statistical procedure,” Sallusti explains, “a sort of decision-making algorithm that, based on characteristics such as the domain of economic activity and production, allows us to define what share of a company can be assumed to be linked to the space economy. We then have a database of companies provided by ASI. Once this is done, we obtain an aggregated result that we verify ex post, because we then profile all the companies included in this statistical database.”

The database of Italian companies includes more than 4 million VAT numbers. Those labelled as space in the Istat database are a few hundred a number broadly in line (which Istat does not disclose) with the pool investigated by the SEE Lab.
Regarding the difference between output (production) and revenue, Sallusti specifies that it is “around 10–15%,” while the component relating to contracts with non-profit institutions such as universities and research centres amounts to about €600 million. These are the most significant differences, in terms of the pool of entities analysed, between the two studies. However, even these premises are not enough to explain a gap of almost €5 billion in estimating an economy described as rapidly expanding.

Defining the downstream

The final observation concerns the downstream component of the space economy that is, all applications and services enabled by space infrastructures. In its analysis, Istat focuses much more on the upstream component essentially manufacturing and services needed to build, launch, and operate satellites and constellations. Of the total, this is worth €4.2 billion; downstream about €3.3 billion. There remains a space-derived component, which Istat defines as “activities that produce goods and services that may use upstream productive inputs in their production processes even though they are not necessary (for example, remote monitoring of transport infrastructure).”

The upstream, by Sallusti’s own admission, is easier to define: “it is better defined from the point of view of products and sectors of economic activity.”

To clarify: downstream is considered, in all analyses produced also at the international level, as the driving component of the future of the space economy. Its boundaries, however, are becoming increasingly blurred, and Istat, following international guidelines, has applied a more conservative approach: “One thing is the existence of the production process, another is its efficiency,” Sallusti stresses. “Let’s take a couple of examples: the courier who delivers a package to a home and uses satellite positioning, but who could deliver that package even without using navigation; satellite television, such as Sky (or, in part, even Rai), which could not broadcast without satellites.” In other words, shipping services are not included in the downstream count, while television broadcasting is.

It should be remembered that growth in the space economy is underway precisely because its perimeter includes activities that will expand by exploiting new space-based opportunities (think of reports such as those produced by Mario Draghi or by McKinsey for the World Economic Forum in 2024, or the more recent one by the Space Foundation).
The real gold mine will be data and services made possible by those same infrastructures. Here too, the difference lies in how far one decides to widen the horizon and it should be a calculation based on shared definitions.
Ultimately, it could be considered a purely statistical issue, or an acknowledgment of the fact that without space we would be much slower, less efficient, and poorer.