PNRR and Space Economy: Growth Prospects and Italy's Role in the Quest for Space

The "Space Economy: development and geopolitics” conference placed the spotlight on the development of the Italian space sector, which is set to receive 7 billion in investments over the coming years, including more than two billion from the PNRR (National Recovery and Resilience Plan).

The event "Space Economy: development and geopolitics" was an opportunity to take a detailed look at the current condition of the space industry in Italy, highlighting current investments under the National Recovery and Resilience Plan and exploring the future prospects of one of the country’s most strategic sectors.

The opening of the conference featured a talk by Frediano Finucci, journalist and head of the foreign-economics section of TG LA7, author of the recent essay "Operation Satellite," a review of satellite espionage among the great powers in space, spanning from the Cold War to contemporary dynamics.

Finucci highlighted the crucial importance of satellite technology, not only in economic terms but also for its geopolitical and military implications. He described the significant transformation taking place in the sector, with the advancement of new electronic warfare weapon systems capable of depriving entire nations of their GPS signal, and noted the gradual entry of private entities, such as Elon Musk's Starlink, into a field that was once the exclusive domain of state players.

Next, Giulio Gottardo, researcher at the PNRR Lab, and Mattia Pianorsi researcher at the Space Economy Evolution Lab, highlighted that, until 2026, the PNRR represents and will continue to represent an important channel of funding for Italy's space economy, with 1.5 billion euros of European funds plus 800 million from national public finance belonging to the PNRR Supplementary Fund. These resources are earmarked for the development of nine projects of strategic significance, including the deployment of a constellation of remote sensing satellites and the establishment of the Vigna di Valle satellite control center.

"We are talking about projects that are relevant to PNRR standards." Giulio Gottardo stressed. "The average size of the 9 Italian projects is 250 million euros. This figure is 300 times higher than the average for PNRR projects, which is 750,000 euros. This is positive because it indicates that, in the space economy sector, we are not seeing the fragmentation of resources that characterizes other areas, and there are only two implementing entities: the ESA and the ASI. The fact that six out of nine projects have already recorded actual payments is also significant; 67 percent, well above the NRP average of 15 percent. This is a tangible indicator of implementation progress."

As Mattia Pianorsi pointed out, the space sector is experiencing unprecedented opportunities with the public resources put in place by the government. Specifically, in order to fulfill PNRR projects, private sector investments are needed to generate value in the medium to long term, contributing to the expansion of the economy and paying back in to the PNRR. However, in the short term, there is a need for the government to adopt an appropriate strategy for maintaining overall funding levels in the national space sector, pending progressive market development that drives sustained growth in the sector.

Confirming this view, Carlo Altomonte, Associate Dean of SDA Bocconi, said, "In order to give the PNRR structural character, we need to see it as the public furrow into which private investment is inserted. Something of particular relevance here is the recent reform of the Growth and Stability Pact approved in Brussels, which downgrades the importance of the deficit criterion and adopts nominal public spending growth as the leading indicator. This implies that the government will have to declare beforehand in which areas it intends to concentrate public spending and in which areas not in order to meet the European average, with a multi-year time horizon. This is a change of significant magnitude for the spending policy of European nations."

Despite some issues at the European level (such as the fragmentation of space policy responsibility among different institutions, or the current difficulty in accessing space in Europe as a result of unwise choices in the past), Italy's positioning in the space economy is growing. "In 2022 we became the first country for optional space programs at the European Space Agency." Simonetta di Pippo, Director of SEE LAB, Space Economy Evolution Lab, remarked. "And this year marks 60 years since the launch of the San Marco satellite, and let's not forget that Italy was the third nation in history, after the Soviet Union and the United States, to put a satellite in orbit. We have been and still are a hub of excellence in space expertise, just consider that the modules under development for the Axiom space station are made in Turin. With this in mind, we have everything we need to play an even more prominent role in the space economy globally."

SDA Bocconi School of Management