Luxembourg – Future Space Power?

With a population of less than 600,000 (half of whom are foreign nationals), Luxembourg, which is nestled between France, Germany, and Belgium, is rarely center-stage internationally. Its biggest claim to fame is serving as an infamous tax haven second to Switzerland, and being one of the richest nations in the world (with a GDP per capita of around $100,000).

It is perhaps because of this great wealth and prosperity, as well as its relatively low profile (it maintains a policy of neutrality in most affairs), that this little country is aiming to become the “Silicon Valley of space mining”, to quote the headline of an article in Wired reporting on Luxembourg’s outsized ambitions in space.

Luxembourg is a bit analogous to a utopian space colony: small, confined, welcoming of outsiders, well-off, politically and psychologically stable.

And while it doesn’t have the weight of billions of people to throw around, Luxembourg does have capital, low taxes, small fees for sending money in and out, and customer confidentiality. That’s sent many an American company to Luxembourgish (yes, a real word and the right one) banks. It’s also allowed Luxembourg to build up that bomb-ass GDP, and the knowledge that when it lures companies—or industries—in, capital continues to flow, as when it got in on the ground floor of satellite communications.

And they have gone thither: The two major mining players based in the US, Planetary Resources and Deep Space Industries, have now established, or will soon, legal offices within Luxembourg. “Luxembourg certainly is taking a very visionary step,” says Chris Lewicki, president and CEO of Planetary Resources. It’s been good for his corporation. The country has purchased equity in and given grants to it. Along with the European Space Agency, Luxembourg has alsocollaborated on Deep Space Industries’ Prospector-X mission, which will use a nano-spacecraft to test some of its asteroid technologies.

In its investments, Luxembourg can double down on the space industry with impunity, in a way the US really can’t. Both companies have had contracts with NASA that fund their R&D. Luxembourg can do the same through the European Space Agency, says Meagan Crawford, Deep Space’s chief operating officer. “But then on top of that, Luxembourg also does direct investment, through loans, through equity, through all sorts of different financial mechanisms,” she says. “That’s not something we see from the US government.”

And in a prescient move last year, Luxembourg became the first country in Europe to devise a legal framework for property rights of resources extracted from celestial bodies. Although the U.S. offers the same rights, it does so only for U.S. citizens, whereas Luxembourg’s applies to anyone registered at a domestic office address; thus the country is poised to serve as a hub for enterprising space companies.

But this approach  can also far short.

The money, the legislation, and the response from corporations suggest the country has ambitious goals—and perhaps a reasonable shot at achieving them. “But here we’re in the land of speculation,” says Zoe Szajnfarber of George Washington University, who studies the dynamics of innovation in the space and defense sectors. “What Luxembourg is trying to be is either the Silicon Valley of space mining, where they’re able to attract a lot of talented people and keep them there, or the Delaware of space company headquarters, where they’re attracting a lot of companies who see value in the tax advantages.” But transforming a place into Hub of X is not easy or guaranteed, and we don’t really know how it happens. “It’s kind of like becoming a movie star,” says Szajnfarber.

Plus, the wait between now and digging up asteroids—which could happen in the mid-2020s, if you listen to the hopeful estimates based on aggressive launch and tech demonstration schedules—also leaves space for another country to hoover up opportunities. Deep Space Industries, for example, is talking with space agencies beyond Europe and the US. And the yawning years before the industry takes off give those competitors time to make themselves more attractive. “What [Luxembourg is] offering is really not enough to make people stay if it’s a multibillion-dollar industry and everyone can provide similar levels of investment or tax incentives,” says Szajnfarber.

So although Luxembourg has a realistic prospective of being a major player in space exploration and resource extraction, chances are that many other countries will start joining in as well. Indeed, the United Arab Emirates, another rather small yet very wealthy country, has already positioned itself as an early and ambitious space power, with plans to launch a Mars probe as early as 2021 (a fear only Russia, the U.S., the European Space Agency, and India have achieved).

This is all for the better, since we wouldn’t want any one country or company monopolizing something as pivotal to humanity as space. And imagine what more can be done if a larger pool of the world’s nations contribute their resources and know-how.

What are your thoughts?

 

 

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