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Philippines, Malaysia and Indonesia bet on space as growth engine

Philippines, Malaysia and Indonesia bet on space as growth engine

NAGOYA, Japan — Asian countries are betting that the space industry will provide a new engine of growth, as the global economy sputters and government finances become overstretched.

A case in point: the Philippines.

“We cannot miss this boat,” said Joel Marciano, head of the space program at the Philippine Department of Science and Technology, in an interview with the Nikkei Asian Review.

The Philippines currently has three satellites in orbit that were developed with Japanese universities. The know-how has been applied to a curriculum for universities in the Philippines, which aims to build and launch four or five more in the next few years, Marciano said.

The country needs to “at the minimum” keep pace with global technological development, Marciano stressed. President Rodrigo Duterte recently signed legislation establishing a space agency, partly in response to changing economic and geopolitical circumstances.

“There is a big growth spurt in this sector now,” Marciano said. He was in Japan for the annual meeting of the Asia-Pacific Regional Space Agency Forum on Nov. 26-29 in Nagoya.

Manila is not alone in seeing opportunities in “new space” — commercial space activity, such as launching rockets and satellite-based services for businesses — that has emerged in recent years. China, South Korea, India, Indonesia and Malaysia are all looking to capture a piece of the new market — or at least get in the game.

Governments still dominate space programs in Asia. In Japan, 90% of hardware orders come from the government. The country is trying to boost the private sector’s share to around 50% — on par with the U.S. and Europe.

The four-day forum, now in its 26th year, is still not a business-centric industry event like its American counterparts. But the presence of a dozen or so company booths and the vibrant discussions at startup sessions give an indication that “new space” is reaching Asia.

The rush for space business also reflects the growing economic power of Asian countries and emerging geopolitical competition within the region.

“You have to know what your value propositions are for doing that if [SoftBank Group’s] OneWeb and [SpaceX’s] Starlink are already providing global internet at an affordable price,” Marciano said. “We have to prepare ourselves for opportunities down the stream.”

The Philippines is home to major electronics companies such as Integrated Micro-Electronics and Ionics EMS. The country is known as a hub for call center services, but that position is being threatened by the spread of artificial intelligence and robots that are replacing call center workers. Aerospace could fill the void.