Last year, I had the privilege of attending the annual European Space Tech Exposition in Bremen, a city often dubbed Europe’s “city of space” for being home to over 140 aerospace companies. While wandering through the vast and bustling ÖVB Arena, surrounded by over 12,000 attendees and nearly 1,000 exhibitors, I found myself among Europe’s brightest minds in the sector. I couldn’t help but reflect: How is Europe faring in this highly competitive industry?
The European Union has more than 2,800 active aerospace organisations, not including the vast supply chain of thousands of smaller firms. This network positions Europe as a huge player in the global space economy, which is currently valued at nearly €600 billion and projected to grow by an average of 9% annually until 2035.
Yet, when compared to the US or China, Europe’s scale and investment reveal challenges. The US, for instance, boasts over 3,000 aerospace companies, many of which are concentrated in hubs like California and Florida, while Europe suffers from a dispersed industry. Contrastingly, China, with fewer than 700 firms, is growing fastest, fuelled by aggressive state-backed investment.
The US outpaces Europe by a wide margin, and this is not including defence, in which the US blows Europe out of the water altogether. NASA’s budget alone stands at $25 billion (~€23bn), with total US civil space investment, including commercial partnerships, topping $29 billion (~€26bn) annually. Private sector investment, especially from companies like SpaceX, raises this figure, with SpaceX alone accounting for 165 of 193 US launches in 2025.
Europe, meanwhile, invests around €7 billion through the European Space Agency (ESA) and EU programmes. Additionally, Europe’s R&D spending, while growing, remains at €17 billion for 2025, which is meagre when compared to the US’s €57 billion in total investments for the same year, which rises to €200 billion when you consider state funding for defence.
But it’s not all about money. Innovation, while certainly accelerated by good cash flow, is really about the brilliant minds and companies behind it. Companies like Iceye in Finland, which currently operates the largest commercial synthetic aperture radar constellation in the world, or Infinite Orbits in France, committed to extending satellite lifespans, or Orbex in Scotland, which uses renewable bio-propane fuel to launch small satellites into low orbit, all contribute to Europe’s aerospace innovation.
Among Europe’s small firms in this field is Tenics. Based in Germany, Tenics specialises in space and aeronautics software development, developing software for space missions, including satellite systems, instruments, and control systems.
The College View reached out to the CEO of Tenics, Dirk Roßkamp, and he offered a candid assessment of where European firms are winning. “European space SMEs are historically strong with highly technical products [such as] laser terminals, optical instruments, magnetic sensors and actuators,” he said. “They struggle to compete with products that have a strong software aspect to them.” That weakness is precisely the gap Tenics works to fill, providing the software tools and services that space companies increasingly need.
But beyond rising national space spending, Roßkamp believes Europe’s institutional customers are starting to adopt the US procurement strategy, focusing on “what” to build rather than “how” to build it, and anchoring suppliers around committed customers. So if Europe’s agencies are learning to buy like in the US, then its SMEs may finally get to compete like them too.
Europe may be running behind in the space race, but it is certainly running. The question is no longer whether Europe can compete, but whether it can move quickly enough to matter.
