Malaysia misses out on space economy | Daily Express Online

What a journey the past two years have been. Malaysia, the once roaring Asian tiger, has apparently lost its bite. The impact of the pandemic and political uncertainties pushed our economy into negative territory in 2020, registering a contraction of 5.6%.

Disheartened experts were certain there would be further contractions in the years to come. We began to lose faith in our now famous “Malaysia Boleh” spirit, and wallowed in self-pity, blaming everyone else for our predicament.

Much to our relief, however, our GDP growth rebounded to 3.1% in 2021. This is no small feat, as we battled the Delta and Omicron variants of Covid-19 and their long tails.

This economic boost gave us hope, not much, but just enough radius. We need more than that if we are to continue to compete successfully to attract the elusive flows of foreign direct investment (FDI) regionally.


In fact, we need a new economic engine to complement the ones we have now. We need what professors Chan Kim and Renée Mauborgne call a “Blue Ocean Strategy”.

Of course, this approach was all the rage when Malaysia’s sixth prime minister made it one of his pillars of economic recovery. With him, however, that model fell out of favor with policymakers when his term as prime minister ended in somewhat murky circumstances in 2018.

For the uninitiated, the Blue Ocean Strategy refers to a market for a product where there is little or no competition. This strategy revolves around finding an activity in which very few companies operate and where there is no pressure on prices.

What about the new space economy? Could this be the blue ocean we are looking for? We’ve been hearing a lot about the new space economy lately, especially with catchy headlines that include celebrities taking day trips to space. But this is not limited to space tourism for the wealthy!

While there are probably many ways to describe the current state of the space industry, it can be very helpful to compare it to what it was before. The original space economy was dominated by governments such as the United States and the USSR with large budgets to fund expensive research. It was centralized, national and very bureaucratic.

The new space economy is global, entrepreneurial and accessible. It is increasingly diverse and expanding, with private players in a variety of sub-sectors. The landscape has now changed, with 75% of industry spending coming from private companies.

For a long time, companies in this industry were selling satellite or technology, and ordinary people naturally couldn’t relate to their needs. So some providers started not talking about satellites; they started talking about data.

Yet the client could not intuitively understand this either. Today, more and more industry vendors are realizing that it’s not about data either; rather, it’s about meeting customers where they are and offering answers.

This trend has seen participants from new companies, new emerging countries and non-governmental investments which propelled the growth of the industry with a compound annual growth rate of 5.6% between 2018 and 2021.

This global space economy was valued at around US$447 billion in 2020, or 55% more than a decade ago, according to The Space Report 2021, Quarter 2. This is truly astronomical growth and made possible because the new spatial economy is finally connecting to the larger economy. .

This improved customer-centric mentality caught the attention of investors and the industry became more investable. Investors are finally hooking investment terms such as “real organic growth”, “economies of scale” and “pathways to profitability” to the space economy.


Increased capital means more players are bringing more technology to market. All of this translates into lower costs, lower barriers to entry, faster time-to-market, and more customer-centric offerings.

Companies now launch and recover spacecraft and shuttles, provide ground and mission control, perform Earth observations and conduct space science. The list is longer when we include spaceport operations.

Spaceport, you say? In Malaysia no less? Could this be the Holy Grail that can bring back the hunger and sharpen the fangs of this fallen Asian tiger?

Make me happy: the opportunity to take advantage of the new global space economy – from various sectors such as satellite services, satellite manufacturing, the launch industry, ground equipment and the associated non-satellite industry – is within our reach.

Local universities such as Universiti Tun Hussein Onn Malaysia, Universiti Kuala Lumpur, Universiti Kebangsaan Malaysia and University Sains Malaysia, to name a few, have earth and space related institutes to provide local content , and they are not the only ones.

The LIMA 2019 exhibition in Langkawi saw a group of local and international space players show their support for a government-backed space industry initiative, if designed strategically. They include leading Chinese players, the European Space Agency, the Italian Space Agency and their suppliers.

Located on the equator, Malaysia offers the perfect launchpad for horizontal air-dropped satellite launch services that cost only a fraction of the cost of the traditional variety of vertical rockets.

And an island like Langkawi would probably be as good a site as any for a fully functional spaceport, an iconic site for launching and receiving commercial and experimental sub-orbital spacecraft.

As a proof of concept, Puerto Rico, over 17,000 km away, has a fully functional and successful spaceport on the equator. As Langkawi and Puerto Rico are equidistant around the Earth’s circumference, suborbital flights from Puerto Rico can land safely in Langkawi and vice versa.

Opponents will point to the spaceport in New Mexico, USA, and say that even a US state collaboration with Branson’s Virgin Galactic failed to fly as planned.

My retort: ​​New Mexico’s spaceport was intended solely for space tourism, where people pay $250,000 (RM1.1 million) to $500,000 to observe our planet at 25,000 km altitude, suspended in weightlessness for a few minutes. Space tourism is just a small service in the new space economy.


The Malaysian model can offer more than that: ground services and mission control center services, suborbital flights for scientific studies, Earth observation, air launch services and space science.

For good measure, we can even have a Cosmotarium, where we can build an educational museum and simulate space travel for the landlocked. The key to the success and profitability of this business will also lie in satellite telephony and the data collection and distribution services that underpin these services.

Of course, many feasibility studies still need to be carried out to evaluate this new business model. In a Red Ocean Strategy, an organization must choose between creating more value for customers and lower price. In contrast, those pursuing a Blue Ocean Strategy attempt to achieve both: differentiation and low cost, opening up new market space.

Leading the countries of ASEAN and the Organization of Islamic Cooperation in a new industry where competition is almost non-existent should give our steps a bounce and a swagger in our march forward. The new space economy — a promising frontier for Malaysia to pioneer in this region. Are our leaders up to the task to lead us there?

Zakie is Executive Chairman of Kiarafics Sdn Bhd, a strategy consulting group. He is also an Adjunct Professor at the Faculty of Industrial Management, Universiti Malaysia Pahang. This appeared in Edge.

– The opinions expressed here are those of the writer Zakie and do not necessarily reflect those of the Daily Express.

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