An analysis of the Innovative Financial Support of Space-Defense Investments

A key factor for the development of space-defense activities is the financial support, for which the government involvement continues to be the main funding stream. Depending on the development stage and application type, the overall funding stream may include industrial/ private equity and venture capital (VC) investors. Depending on the development stage and application type, some applications could be funded exclusively by and for government, but in other cases funding could be mixed. The private equity investors are rarely interested in the early stage technological development because of the risk-liquidity ratio or the uncertainty of future developments. The majority of space projects are selected for strategic, long term needs of their sponsors. Governments can stimulate alternative and innovative investment vehicles within space activities by leveling the risk that investors take, and supporting particular space activities through investment in actual portfolio products development and supporting this portfolio in the real market using innovative financing solutions. Governments can support actions that increase the risk to return ratio of innovative investments and these actions will always increase the efficiency of investments in space activities. Governments have the advantage of project portfolio management (PPM) under the authority of a specific directorate. Combining the advantages of PPM implementation alternative and innovative investments based on knowledge management could accelerate the evolution of technologies and value management could realize a robust implementation in the real market.