The Economics of Space Sustainability

4. Space assets as critical infrastructure? The socio-economic value of space infrastructure in Japan

Yui Nakama
University of Tokyo, Japan

Quentin Verspieren
University of Tokyo, Japan

Aya Iwamoto
University of Tokyo, Japan

Abstract

Very little research has been produced to try to quantify the value of space assets for society and the potential damage that a disruption of space-based services would incur. This chapter explores whether, in a similar manner to other critical infrastructures, space assets hold a significant value in our society due to the difficulties faced in substituting them with alternatives. It further proposes a simple theoretical model to comprehend the macroeconomic benefits of vital space assets from a governmental standpoint.

Introduction

In a modern digitalised society, space-based products and services play a crucial role in social and industrial activities. As the space environment undergoes various transformations, the protection of vital space assets has emerged as an important policy agenda. However, despite this recognition and the general orientation towards greater actions in fields such as space safety and sustainability, space situational awareness or space mission assurance, very little consideration has been put into the quantification of the value of space infrastructure for our societies, and the potential damage that a disruption of space-based services would incur. Considering the strong dependence of other critical infrastructures on space-based services, it is of utmost urgency for governments around the world to understand the socio-economic implications of the possible disruption of specific space assets.

In this study, the authors propose a simple model to evaluate the macroeconomic contribution of space-based services in an advanced spacefaring country like Japan. The ambition of this model is to contribute to evidence-based space policy making by providing quantitative evidence on the value of space infrastructure, which can subsequently be taken into consideration when evaluating the costs and benefits of space mission assurance activities. It also aims, in line with the OECD’s project on the economics of space sustainability, to kickstart global reflections on socio-economic valuation models for space infrastructure.

This chapter and its model are based on a detailed case study of the approach of the Government of Japan concerning the protection of vital national space assets. Considering that Japan has been highly active in the fields of space safety, sustainability and security in recent years, the authors discovered, through interviews with government officials, that there was no methodology to either clearly assess the degree of criticality of specific space assets or to quantify the socio-economic impact of a disruption of such assets. The authors therefore decided to investigate other areas of Japanese policy making, especially critical infrastructure protection and telecommunication penetration, to identify elements that could serve to assess the contribution of space-based services to society.

Critical infrastructure in Japan: limited substitutability and high socio-economic impact

The Government of Japan released two different approaches for the protection of its critical infrastructure between 2005 and 2022. First, the “Cybersecurity Policy for Critical Infrastructure Protection”, which was revised four times by 2022, placed the emphasis on cyber threats against critical infrastructure sectors and promoting the adoption of strict safeguards by service operators (NISC, 2024[1]). Second, the 2022 Economic Security Promotion Act contained elements on critical infrastructure protection (CIP) and provided a list of “designated social infrastructure services” (特定社会基盤役務) requiring special attention (Cabinet Office, 2022[2])Table 4.1 displays the two lists of critical infrastructure sectors and services in Japan.

Table 4.1. Japan's critical infrastructures in 2022

Critical infrastructure sectors (重要インフラ分野) Cybersecurity Policy for Critical Infrastructure Protection	Designated social infrastructure services (特定社会基盤役務) Economic Security Promotion Act of 2022
Airports	Airports
Aviation services	Aviation
Credit card services	Credit card
Electric power supply services	Electricity
Financial services	Finance
Gas supply services	Gas
Petroleum industries	Petroleum
Railway services	Railways
Water services	Water supply
Chemical industries	Road cargo
Government administrative services	Ocean cargo
Information and communication services	Communications
Logistics services	Broadcast
Medical services	Post

Note: Similar themes are highlighted in light blue and contrasting themes in dark blue.

The distinctions between these two strategies stem from their distinct objectives: cybersecurity and economic security. However, there are many common topics which have been highlighted in light blue in Table 4.1, as well as a collection of dissimilar themes highlighted in darker blue. According to the National Center of Incident Readiness and Strategy for Cybersecurity (NISC), “critical infrastructures (CI) refers to sectors that comprise the backbone of national life and economic activities formed by businesses providing services that are extremely difficult to be substituted; if the function of the services is suspended or deteriorates, it could have a significant impact on national life and economic activities” (NISC, 2022[3]). The Cabinet Office (CAO) regards “designated social infrastructure services” as “the foundation of people’s lives and economic activities and are likely to jeopardise the nation's and citizens’ security if their consistent provision is hampered” (Cabinet Office, 2024[4]). Based on these definitions, the government’s criteria for its CI can be summarised as limited substitutability and high socio-economic impact.

To identify the methodologies proposed by each of the two CIP approaches for measuring the value of critical national infrastructure as indicated in their definitions, the authors conducted multiple interviews with individuals leading the development of CIP policy in government, industry, and academia. It is pertinent to note that the Government of Japan has no specific economic impact analysis on its CI. This is due to its political decision making process regarding sectors and services considered as “the backbone of national life and economic activities” (NISC, 2022[3]). The officials interviewed by the authors all agreed that the policy documents for CIP are assembled from industry-specific laws relevant to each field, without a thorough evaluation of the socio-economic value of the respective infrastructures at the core of why they should be protected. Beyond Japan, other countries that have also identified space systems as CI or are actively engaged in the protection of space infrastructure, lack economic methodologies and strategies according to the authors’ international survey.1 While the value assessment process based on the definition is still in the early stages of establishment, the CIP itself remains a key indicator of national policy to protect its critical infrastructure.

Space’s critical contribution to information and communication services in Japan

Although none of the CIP approaches established by the Government of Japan include space infrastructure, or any part thereof, in their list, space technologies and services are at the foundation of most of the listed sectors and services. In fact, except for three ministries,2 all ministerial policy papers indicate an active usage of space infrastructure and reliance on it is growing, notably reliance on the “information and communication services” or “communications” sector. Telecommunications from outer space offer wide-area and multi-address capabilities, allowing for simultaneous transmission or communication to a significant number of individuals across a large region from a high altitude location.

The PwC study on the “Dependence of the European Economy on Space Infrastructures” released in 2017 concludes that the telecommunications sector is the least reliant on the space infrastructure due to the high-quality coverage offered by terrestrial communication networks in Europe (PwC, 2017[5]). This dependence, however, largely affects remotely located economic activities such as offshore stations and maritime or rural areas, which account for a lower percentage of the European Union’s economy. Despite having a relatively high coverage ratio of terrestrial network services, Japan, being a major maritime power, depends on maritime transportation for 99.7% of its trade volume. Additionally, the island country is confronted with the major challenges of an ageing society and declining birth rates. According to the latest demographic estimates by the Ministry of Internal Affairs and Communication (MIC), the rate of elderly individuals aged 65 and more reached a record high of 29.0%, while the overall population fell by 556 000 from the previous year to 124 947 000, marking the twelfth consecutive year of decline (MIC, 2023[6]). Addressing rural depopulation, which stagnates local economies and widens disparities with urban regions, remains an important and urgent policy agenda in Japan.

It should also be noted that, due to their distance from Earth, space-based telecommunications services are an essential means of communication and information gathering for disaster management, providing administrative support and ensuring the safety of communities. As a disaster-prone country, Japan relies heavily on space infrastructure as the “foundation of people’s lives” (Cabinet Office, 2024[4]). Immediately after the significant 7.0-magnitude earthquake during the Great East Japan Earthquake, approximately 340 satellite-based mobile phones were supplied to disaster areas where the transmission line to the communication station had been cut off (MIC, 2011[7]). Around 6 700 NTT Docomo, 3 700 KDDI (au), 3 800 Softbank, and 700 EMOBILE communication stations were offline at that time, and space-based telecommunication equipment played an essential role (MIC, 2011[8]).

Space infrastructure contributing to “information and communications” services

Satellite communications (satcom) and the global navigation satellite systems (GNSS) are central components of space-based information and communication networks. Vittori, et al. (2022[9]) identified the dependency rate of satcom and GNSS on the information and communication industry in Europe as 85% and 15% respectively.

Satcom provides a variety of information and communication services by transmitting and receiving radio telecommunications signals, including voice, data and video, between transmitting sources and receiving stations. The three fundamental operations are communication-by-satellite (point-to-point), broadcasting (point-to-multipoint), and data collection (multipoint-to-point), which are widely recognised as ubiquitous and cost-effective services. Table 4.2 lists eleven Japanese primary satellites in geostationary orbit (GEO),3 while Table 4.3 shows the other four non-geostationary orbit satellite constellations for telecommunications as of 2022.4

Table 4.2. Japan's primary telecommunication geostationary satellites in 2022

Satellite	Owner	Mission	Band	Orbit	Launch date
1. JCSAT-85/Intelsat 15	Sky Perfect JSAT/Intelsat	Data transmission (incl. image, voice)	Ku	GEO 85.15(°E)	December 2009
2. JCSAT-110A	Sky Perfect JSAT	Communication and broadcasting	Ku	GEO 110(°E)	December 2016
3. JCSAT-4B	Sky Perfect JSAT	Communication and broadcasting	Ku	GEO 124(°E)	May 2012
4. JCSAT-3A	Sky Perfect JSAT	Communication and broadcasting	C, Ku	GEO 128(°E)	August 2006
5. JCSAT-5A/N-STAR d	Sky Perfect JSAT/NTT Docomo	Broadcasting	S, C, Ku	GEO 132(°E)	April 2006
6. N-STAR e	NTT Docomo	Broadcasting	S, C	GEO 136(°E)	July 2002
7. SUPERBIRD-C2	Sky Perfect JSAT	Communication and broadcasting	Ku	GEO 144(°E)	August 2008
8. JCSAT-1C	Sky Perfect JSAT	Communication and broadcasting	Ku, Ka	GEO 150(°W)	December 2019
9. JCSAT-2B	Sky Perfect JSAT	Communication and broadcasting	C, Ku	GEO 154(°E)	May 2016
10. SUPERBIRD-B3	Sky Perfect JSAT	Communication and broadcasting	Ku, Ka	GEO 162(°E)	April 2018
11. Horizons-3e	Sky Perfect JSAT/Intelsat	Data transmission (incl. image, voice)	C, Ku	GEO 169(°E)	September 2018

Table 4.3. Primary telecommunication non-geostationary satellites used in Japan in 2022

Satellite	Owner	Mission	Number of satellites	Orbit
1. ORBCOMM	ORBCOMM	Data transmission, positioning	16	825 km
2. Iridium	Iridium	Data transmission (incl. voice), Communication (OpenPort)	66	780 km
3. Globalstar	Globalstar	Data transmission (incl. voice), positioning	24	141 km
4. Starlink	SpaceX	Data transmission	4,053	550 km

GNSS offers global positioning, navigation, and timing (PNT) services through a network of satellites that transmit signals to ground-based receivers, allowing these receivers to determine their precise geographic location, velocity, and time. The most well-known example is the Global Positioning System, which was developed in the 1960s by the United States. The single and critical contribution of GNSS signals and frequencies to the information and communication sector is timing and synchronisation for various wired and wireless network management. Table 4.4 displays the present operating status of the Quasi-Zenith Satellite System, the Japanese GNSS, as of 2023.

Table 4.4. Japan's operational navigation satellites in 2023

Satellite	Services	Positioning signals	PRN	Block type	Launch date
1. QZS02	Satellite positioning, navigation, and timing	L1C/A, L1C, L2C, L5	194	IIQ	June 2017
	Sub-metre level augmentation	L1S	184
	Positioning technology verification	L5S	184
	Centimetre level augmentation	L6	194
2. QZS03	Satellite positioning, navigation, and timing	L1C/A, L1C, L2C, L5	199	IIG	August 2017
	Sub-metre level augmentation	L1S	189
	Positioning technology verification	L5S	189
	Positioning technology verification	L1Sb	137
	Centimetre level augmentation	L6	199
	Disaster management (Q-ANPI)	Sr/Sf	-
3. QZS04	Satellite positioning, navigation, and timing	L1C/A, L1C, L2C, L5	195	IIQ	October 2017
	Sub-metre level augmentation	L1S	185
	Positioning technology verification	L5S	185
	Centimetre level augmentation	L6	195
4. QZS1R	Satellite positioning, navigation, and timing	L1C/A, L1C, L2C, L5	196	IIA-Q	October 2021
	Sub-metre level augmentation	L1S	186
	Positioning technology verification	L5S	186
	Centimetre level augmentation	L6	196

The space assets depicted in tables 4.2 to 4.4 can be defined as the core space infrastructure for Japan’s information and communications sector. Rather than relying on the operations of individual satellites, they work as an integrated system to enable smooth communication services.

Substitutability: alternative solutions to the space infrastructure?

Telecommunications is a mature industry that is primarily reliant on terrestrial communication networks. Considering one of the requirements for critical infrastructure – limited substitutability – the substitutability of satcom and GNSS in the information and communications industry should be examined.

Although satcom capabilities are often considered complementary to terrestrial telecommunication networks in order to meet the “everything, everywhere, all the time” need, terrestrial networks cannot serve as a true alternative option to satcom in certain critical conditions, such as rural and catastrophe locations where terrestrial radio waves are difficult to receive or lacking. Aerial solutions, such as drones, high-altitude balloons, and airborne platforms equipped with communication features, on the other hand, can be viable alternatives in the short term; nevertheless, these technologies are not yet practical market solutions. As a result, when terrestrial communication networks are unavailable or inoperable, satcom remains the best and only choice, indicating “the backbone of national life and economic activities” (NISC, 2022[3]). Satcom offers various advantages that cannot be easily substituted, such as global coverage that is unconstrained by physical infrastructure, rapid deployment, geographic mobility, and wide-area secure communication.

GNSS has been the sole and significant solution providing accuracy, integrity, coverage, continuity and availability of global time, location, and synchronisation services across a wide range of socio-economic activities. In their comprehensive study on PNT systems published in 2023, Critchley-Marrows and Verspieren identified that, for most decision makers and government officials, GNSS serves as the primary source for PNT, which is “either referred to as an enabler of critical infrastructures or as a critical infrastructure in itself” (Critchley-Marrows and Verspieren, 2023[10]). While there are a few alternatives to GNSS timing and synchronisation functions, the options are typically limited to a specific type of application or a specific group of users, with limited spatial coverage. One of the main alternatives is Network Time Protocol, which uses synchronised clocks within a network for relatively exact timing and synchronisation. However, the network-based network systems are constrained by internet availability as well as hardware requirements such as high-performance clock sources for accuracy. As a result, GNSS, as a satellite-based system independent of network infrastructure, is far more competitive.

Socio-economic impact: the value of space infrastructure in Japan

Following the evaluation of the substitutability of space-based products and services in the information and communication sector, this section qualitatively analyses the other requirements for critical infrastructure – a high socio-economic impact. Space-based global connectivity improves and expands high-speed information sharing and access to services, overcoming geographical limitations even in distant or challenging-to-reach regions where terrestrial infrastructure is unreachable. The Government of Japan promotes the use of space communications infrastructure through two primary initiatives: regional revitalisation and disaster management.

In most cases, the difficulties in building terrestrial networks stem from technical, geographical, and economic barriers. Remote locations, far from metropolitan areas, necessitate large increases in infrastructure deployment and maintenance expenses and effort. Geographical complexity, such as hilly regions, woods, deserts, or areas with many lakes, can further hamper the construction of terrestrial networks. Operating ground-based networks can also be challenging in areas prone to severe weather or natural disasters. Furthermore, low population density places may not have enough information and communication demand to justify the cost-effectiveness of setting up terrestrial systems.

Overcoming these challenges, satellite-based networks can provide high-quality connections to large remote areas while being economical. CAO released the “Vision for a Digital Garden City Nation” in 2022 to build digital infrastructure stretching to every corner of the ageing and depopulating country (Cabinet Office, 2022[11]). In the medium and long term, the strategy focuses on digital transformation, aiming for regional revitalisation using information and communication technology (ICT), including space infrastructure. Building robust and frequent satellite communication links largely contributes to local economic growth by facilitating many different aspects such as the expansion of telework environments.

Geographically, Japan is particularly vulnerable to natural disasters, experiencing countless earthquakes, typhoons, floodings, and volcanic eruptions. Every year, many people are reported as missing or dead as a result of these inevitably difficult situations. In times of natural hazards, the infrastructure of terrestrial communication and power networks is often disrupted or destroyed. On the other hand, space-based systems, with their independent communication pathway, can provide fundamental and dependable communication platforms for all risk management processes, including prevention and mitigation, prompt emergency response, and recovery.

During the 2011 Great East Japan Earthquake and tsunami, space-based information and communication technologies played three critical roles: administrative assistance, information gathering, and safety confirmation. Satellites assisted public authorities in successfully disseminating essential damage status information, safety instructions, and evacuation notifications to impacted populations, saving lives and lowering casualties. Besides responding to the government’s safety alerts, the affected people themselves utilised space infrastructure for enhanced situational awareness, in order to make informed choices by collecting and analysing data on weather patterns, water levels, seismic activity, and other crucial factors. Additionally, space-based communication services enabled safety assurance via phone calls and emails. Disaster response communication systems including satellite networks reduced uncertainty, allowing for speedy and safe disaster relief actions. The Government of Japan strongly recognises the critical need to strengthen its resilient, safe and secure information and communication platforms utilising space-based systems for safe and reliable emergency response (Cabinet Secretariat, 2021[12]).

Modelling the socio-economic benefits of space infrastructure for information and communication

Setting out a macroeconomic theoretical model based on the aggregate function, this part provides a quantitative assessment of the socio-economic value of space infrastructure in the information and communication sector, which is critical to national life and economic activities in Japan. The socio-economic impact, as a premise, refers to the direct or indirect effects of certain activities or technologies on the economy, social or cultural practices, livelihoods, and so forth. Since the implications cannot be quantified in terms of market size or development expenses, macroeconomic approaches concentrating on socio-economic performance in the relevant regions are applied. To understand how decision makers understand the value of satcom and GNSS, the authors adapted an existing model developed by the Government of Japan in the early 2000s to assess the significance of infrastructure in the information and communication field.

Introducing the space-based ubiquitous index

The ubiquitous index is a progress indicator towards the ubiquitous network, defined as an environment allowing access at any time, from any location, by any device, and by anybody. This indicator has been used by the MIC to measure the progress of the national ubiquitous network and its impact on regional economic growth, which was encouraged by the 2004 ICT plan “u-Japan Policy” (MIC, 2007[13]). By selecting the variables relevant to space-enabled applications, the general ubiquitous index can be translated into a space-based ubiquitous index, hence providing a simplified model to quantify the socio-economic effects of the spread and use of the space infrastructure. This can be done by following three main steps:

1. The space infrastructure index is assessed through four technological domains: personal computers (PC), internet, broadband, and mobile communication, and two macro areas: telework and multi-use of software, all of which are supported by satcom and GNSS. The index reflects the penetration and utilisation of space-enabled information and communication services.

2. Based on the space infrastructure index, the space-based ubiquitous index is calculated as the average of the six elements by prefecture, demonstrating both the social effects (changes in lifestyle, community, etc.) and the economic effects (changes in the economy, including businesses and individuals).

3. The correlation between the space-based ubiquitous index and the economic growth of a region is evaluated. In contrast to PwC’s dependence characterisation model, which measures the severity of dependence primarily on the scale of the economic activity using reasonable hypotheses, the authors’ modelling approach takes a broader perspective and is grounded in transparent government databases (PwC, 2017[5]).

The penetration rate of space infrastructure is measured by four technological sectors: PC, internet, broadband and mobile communication devices. Satcom and GNSS have a substantial impact on these modern information and communication systems in various ways, as discussed in previous sections. The combination of space infrastructure and major communication devices allows wide-area coverage, emergency connectivity, mobility, rapid deployment, and digital divide reduction. An overview of the activities conducted within each technological sector is presented below.

• PCs are primarily used for information processing, storage, and programme execution, while satellites serve as infrastructure to facilitate data transmission and internet connectivity. The PC household penetration rate is calculated using data from the “Q1 Ownership Status of Information Communication Equipment” on the “Communication Usage Trend Survey (households)” for each year between 1996 and 2022 with a database by prefecture from 2010 (MIC, 2022[14]).

• While PCs assist with individual information processing as one of the computer devices, the internet refers to the worldwide network that links computers and servers in different locations, enabling information sharing. Satellites can deliver wireless internet signals blasted down from a satellite circling the Earth, in addition to adding to internet connectivity and mobility. The internet population penetration rate is estimated using data from the “Q1(1) Internet usage experience in the last year (excluding non-responders)” on the “Communication Usage Trend Survey (household members)” for each year from 1997 through 2022 with a database by prefecture starting in 2010 (MIC, 2022[15]). The current definition of “internet users” includes citizens aged 6 and over who use the internet for any purpose, not just for personal use, regardless of device or location.

• Broadband encompasses high-speed, high-bandwidth communication technologies or network connections that allow the rapid and efficient transmission of large amounts of digital resources. Broadband subscribers are measured in the “Q2 Connection lines of households using the internet at home” in the “Communication Usage Trend Survey (households)” for each year from 2002 through 2022 with a prefecture-specific database beginning in 2010 (MIC, 2022[14]).

• Mobile communication refers to the technology of exchanging data and information that enables users to communicate in various situations, including everyday life, business, and emergencies, independent of their location. Mobile communication subscribers are counted in the “Q1 Ownership Status of Information Communication Equipment’ on the ‘Communication Usage Trend Survey (households)” for each year between 2006 and 2022, with a prefecture-specific database from 2010. Mobile devices include mobile phones, smartphones, personal handyphone system (PHS) devices and personal digital assistants (PDAs), and the statistics display the percentage of households that own at least one of these devices (MIC, 2022[14]).

The utilisation rate of space infrastructure is evaluated in two macro areas: telework and multi-use of software. The MIC also adopts the “information distribution census” or the “information distribution index” indicating the volume of information distributed and consumed domestically, as the ubiquitous index variables (MIC, 2008[16]). However, owing to the rapid advancement of ICT in recent years, information sources have become more diverse, extending beyond the conventional analogue paradigm. As a result of the uncertainty surrounding its validity, the survey on information distribution was discontinued in 2009 (MIC, 2009[17]). Therefore, this study’s model does not adopt the index. An overview of the activities conducted within each of the macro areas is presented below.

• Telework is the practice of working from a location other than the conventional office setting. Instead of commuting to a physical office, employees have the option to work remotely utilising ICT outlined in the penetration rate of the space infrastructure. Telework implementation rates in businesses are aggregated in “Q4 Telework Introduction Status” on the “Communication Usage Trend Survey (companies)” for each year between 2000 and 2022 with an eleven-regions-specific database introduced in 2010 (MIC, 2022[18]).

• Multi-use software facilitates access by numerous media sources after secondary usage while preserving the same content, demonstrating the diversity of information distribution channels. The market share of multi-use software can be found in the “Survey of the Current State of Media and Software Development and Dissemination” for each year spanning from 2001 to 2021 (MIC, 2022[19]).

Based on these six indicators, Figure 4.1 represents the penetration rates of space infrastructure (Panel A) and the utilisation rates (Panel B) between 1996 and 2022. The penetration rates experienced a significant increase by 2003, followed by a remarkable surge in utilisation, particularly in teleworking, in the aftermath of the 2020 pandemic.

Figure 4.1. Measures for space infrastructure penetration and utilisation in Japan

Source: Authors’ compilation of survey data from Japan’s MICs.

The space-based ubiquitous index is derived by taking the average of the six space infrastructure indicators for every prefecture in Japan. Due to the unavailability of prefecture data, telework implementation rates rely on regional data, while multi-use software market shares refer to nationwide data. Figure 4.2 demonstrates the evolution of the space-based ubiquitous index in Japan’s 47 prefectures between 2010 and 2021.

Figure 4.2. The evolution of Japan’s space-based ubiquitous index over time

Maximum, median and minimum values for Japan’s 47 prefectures

Notes: The space-based ubiquitous index is calculated as the average by prefecture of six indicators (household penetration of PC, internet, broadband and mobile communication; the share of business firms implementing telework; and the market share of multi-use software). Due to the unavailability of granular data, telework implementation rates rely on regional data, while multi-use software market shares refer to nationwide data.

Source: Authors’ calculations based on survey data from Japan’s Ministry of Internal Affairs and Communications.

Value of space-enabled activities

It is additionally critical to quantify the extent to which the technological progress in information and communications, including space applications, benefits regional society and the economy. In line with the government’s vision of creating a Digital Garden City Nation in rural areas, the relationships between the advancement of ICT and regional revitalisation are presented in Figure 4.3 (Cabinet Office, 2022[11]).

The six case studies demonstrate a strong correlation between the space-based ubiquitous index and the real gross domestic product (GDP) growth rate in Japanese prefectures with the smallest populations below one million people (MIC, 2020[20]). The real GDP by prefecture is based on the 2005 chain price for the 2010 value and the 2015 chain price for 2011-2019 values from the database of prefectural accounts by CAO (Cabinet Office, 2014[21]). The surges in the space-based ubiquitous index coincide with a rise in GDP, indicating a mean correlation of 0.52. The most notable correlation stands at 0.82 observed in Yamanashi prefecture.

As a starting point for estimating the value of space-enabled activities, the socio-economic impacts should be clearly defined. Social impacts are the effects of a particular action or event on individuals, communities, and society as a whole, such as changes in public health, education, community cohesion, lifestyle, cultural practices, and overall quality of life. Economic impacts, on the other hand, are the consequences of actions, events, policies, or technology on the economy, including businesses and individuals. These outcomes can have an impact on economic growth, employment, as indicated by GDP, employment rates, consumer spending and so on. In many cases, the social and economic impacts are interconnected.

Figure 4.3. Space-enabled society in selected sparsely populated prefectures in Japan

Notes: GDP: Gross domestic product. The space-based ubiquitous index is calculated as the average by prefecture of six indicators (household penetration of personal computers, internet, broadband and mobile communication; the share of business firms implementing telework; and the market share of multi-use software). Due to data unavailability, telework implementation rates rely on regional data, while multi-use software market shares refer to nationwide data.

Source: Authors’ calculations based on survey data from Japan’s Ministry of Internal Affairs and Communications.

To estimate the socio-economic impacts of space infrastructure, the model applies the aggregate production function which explains how the total real GDP is affected by available inputs in the economy. The following factors influence aggregate output: production function, technological capabilities, total amount of capital stocks, and total workforce. The key concept is that economic growth increases when aggregate production increases as a result of technological, human capital, knowledge, and social infrastructure changes. Based on the calculated space-based ubiquitous index in previous parts, which reflects not only the amount of information capital but also the implications of ICT utilisation, the macroeconomic model demonstrates direct and indirect impacts both on society and the economy. Based on Ministry of Internal Affairs and Communications (2008[16]), the authors estimate the following equation:

Estimate equation:

ln$\left(\frac{Y}{L}\right)$ = ln A + $\alpha \text{'}\cdot$ ln$\frac{Kall}{L}$ + $\beta \cdot$ln$\left(K\cdot Us\right)\cdot$S

*With A>0, $\alpha \text{'}$>0, $\beta$>0, Us>0, S>0

When calculating the socio-economic impacts by prefecture, a dummy variable for each region is added.

ln$\left(\frac{Y}{L}\right)$ = ln A + $\alpha \text{'}\cdot$ ln$\frac{Kall}{L}$ + $\beta \cdot$ln$\left(K\cdot Us\right)\cdot$S + δDummy

*With δDummy =${\sum }_{\iota =1}^{47}\beta \iota$ $\cdot$ dp$\iota$

Table 4.5. Variables for estimating the socio-economic impact of space infrastructure

Variables	Description	Database
Y	Aggregate output is defined as an economy's total productivity, or gross domestic product (GDP). GDP represents the sum of value added by all its producers. This study employs real GDP, an inflation-adjusted measure.	National Accounts of Japan or Prefectural Accounts, Cabinet Office
A	A denotes the technological factor measuring the economy’s overall productivity, called Total Factor Productivity (TFP).	-
Kall	Capital stock is the total quantity of non-human capital input into the economy. The amount encompasses physical and financial assets developed and employed by businesses or governments in the production process, such as buildings, plants, machinery, equipment, and ownership interests. Estimate equation: Kτi= Iτi + (I-d₁i)Iiτ-₁ + (1-d₂i)Iiτ-₂ + … + (1-dsii)Iiτ-si τ: point of time, dj: cumulative depreciation rate at time j, * j∈{1, 2, …, s} Iτ: capital investment at time j, s: service life Kτ= Kτ1 + Kτ2 + Kτ3	Gross Capital Stock of Private Enterprises, Cabinet Office
Ki	Telecommunication capital stock is measured in the perpetual inventory method: Kt = It + (1-d)Kt-1 I: flow investment, d: depreciation rate, t: year	ICT Economic Analysis Survey, Ministry of Internal Affairs and Communication and/or Estimation of Information Capital Stock by Prefecture, InfoCom Research, Inc.
L	Labour input = Number of employees in the entire economy × Total hours worked in the entire economy	Labour Force Survey, Ministry of Internal Affairs and Communication and/or Prefectural Accounts, Cabinet Office and/or Monthly Labor Survey, Ministry of Health, Labour and Welfare
Us	Space-based ubiquitous index	calculated
S	Space infrastructure's contribution to the space-based ubiquitous index	Not currently available

Source: Adapted from MIC (2008[16]), “ビキタス化による地域経済成長に関する調査報告 [Research Report on Regional Economic Growth as a Result of the Progress of Ubiquitous Networks]”, https://www.soumu.go.jp/johotsusintokei/linkdata/other033_200803_hokoku.pdf.

Figure 4.4. Illustration of the model’s economic implications

Notes: Kall refers to Capital stock; Ki refers to telecommunication capital stock; and L refers to Labour input. See Table 4.5 for further information.

Source: Adapted from MIC (2008[16]), “ビキタス化による地域経済成長に関する調査報告 [Research Report on Regional Economic Growth as a Result of the Progress of Ubiquitous Networks]”, https://www.soumu.go.jp/johotsusintokei/linkdata/other033_200803_hokoku.pdf.

Figure 4.4 illustrates the economic implications of the model. Reflecting the effects of a space-based ubiquitous network, the model represents the productivity enhancement brought by space infrastructure. As the model measures the value across time on real GDP, it is applicable even in unusual situations such as natural disasters.

Contributions from space infrastructure

S denotes the pure benefits of space infrastructure. To narrow the contribution from space infrastructure in the space-based ubiquitous index, the proportion of satcom and GNSS involved in each of the six indicators must be identified. In other words, the positive socio-economic impacts from other information and communication products and services that do not have access to space systems need to be excluded. The current absence of precise databases on S, such as the number of mobile satellite communication subscribers and the household members’ ratio of satellite utilisation in internet and broadband communication, poses a challenge to the proposed model. However, the contribution from space infrastructure to the information and communication industry has been increasing in Japan, as evidenced by Figure 4.5 illustrating the rapid growth in the number of radio stations for mobile satellite services between 2004 and 2015.

Figure 4.5. Number of radio stations for mobile satellite services

Source: MIC (2016[22]), “平成28年度　情報通信白書 [FY 2016 Information and Communications White Paper]”, https://www.soumu.go.jp/johotsusintokei/whitepaper/ja/h28/pdf/n5300000.pdf.

Discussion and conclusions

Space infrastructure has become an integral part of our daily lives. This chapter provides a macroeconomic framework to quantify the socio-economic impact of space infrastructure in the information and communication sector. The rational sector selection is based on a review of official policy documents as well as the key criteria to CIP: limited substitutability and exceptionally high socio-economic impact. In Japan, an isolated, ageing, depopulating and disaster-prone country, space assets in the information and communication industry can be considered as vital infrastructure to maintain national life and economic activities.

To understand the government’s perspectives on critical infrastructure, the model applies the MIC’s approach to evaluate the significance of general ICT based on the aggregate production function. The space-based ubiquitous index, which is measured by six technological sectors and two macro areas to which satcom and GNSS contribute, indicates the socio-economic impacts of space-enabled information and communication services on the model. The simplified equation, which is applicable to various use cases such as broadcasting and other countries, demonstrates the correlation between the deployment of space infrastructure and economic growth based on clear and unified government databases. The main challenge to the modelling is however the lack of precise data on the pure benefits of satcom and GNSS in the sector.

As the reliance on space-based products and services has grown, so have the risks to space assets. This economic study gives essential evidence-based arguments for international policy discussions on space safety and sustainability. Additionally, the case study in Japan provides an interesting ilustration of how one of the major spacefaring countries may develop a policy framework for the protection of its critical space infrastructure.

Endnotes

References

[4] Cabinet Office (2024), “経済施策を⼀体的に講ずることによる安全保障の確保の推進に関する法律, [Act on the Promotion of Security Assurance through the Integrated Implementation of Economic Measures]”, e-gov Japan, Government of Japan, https://elaws.egov.go.jp/document?lawid=504AC0000000043_20250616_504AC0000000068 (accessed on 11 January 2024).

[11] Cabinet Office (2022), “デジタル田園都市国家構想基本方針 [Vision for a Digital Garden City Nation]’”, Government of Japan, www.cas.go.jp/jp/seisaku/digital_denen/pdf/20220607_honbun.pdf.

[2] Cabinet Office (2022), “経済安全保障推進法の概要 [Overview of the Economic Security Promotion Act]”, Government of Japan, www.cao.go.jp/keizai_anzen_hosho/doc/gaiyo.pdf.

[21] Cabinet Office (2014), “県民経済計算（平成13年度 - 平成26年度)(1993SNA,平成17年基準計数) [Prefectural Accounts (2001-2014) (1993SNA/2005 base figures)]”, Government of Japan, www.esri.cao.go.jp/jp/sna/data/data_list/kenmin/files/contents/main_h26.html.

[12] Cabinet Secretariat (2021), “Action Plan of the Growth Strategy”, provisional translation, Government of Japan, www.cas.go.jp/jp/seisaku/seicho/pdf/ap2021en.pdf.

[10] Critchley-Marrows, J. and Q. Verspieren (2023), “Ensuring PNT Resilience: A Global Review of Navigation Policies and Roadmaps”, Science, Technology and Innovation Governance (STIG) Reports, University of Tokyo, https://stig.pp.u-tokyo.ac.jp/stig/wp-content/uploads/2023/07/Resilient_PNT_Policy_Report_FINAL_ONLINE.pdf (accessed on 11 January 2024).

[6] MIC (2023), Population estimates, Government of Japan, Ministry of Internal Affairs and Communication, www.stat.go.jp/data/jinsui/2022np/index.html.

[19] MIC (2022), “‘メディア・ソフトの制作及び流通の実態に関する調査 [Survey of the Current State of Media and Software Development and Dissemination]”, Ministry of Internal Affairs and Communications, Government of Japan, www.soumu.go.jp/iicp/research/media_soft.html.

[14] MIC (2022), “Communications Usage Trend Survey 1966-2022 (Households)”, Ministry of Internal Affairs and Communications, Government of Japan, www.soumu.go.jp/johotsusintokei/statistics/statistics05b1.html.

[18] MIC (2022), “Communications Usage Trend Survey 2010-2022 (Companies)”, Ministry of Internal Affairs and Communications, Government of Japan, www.soumu.go.jp/johotsusintokei/statistics/statistics05b2.html.

[15] MIC (2022), “Communications Usage Trend Survey 2010-2022 (Household Members)”, Ministry of Internal Affairs and Communications, Government of Japan, www.soumu.go.jp/johotsusintokei/statistics/statistics05b1.html.

[20] MIC (2020), “2020 Population Census”, e-stat Japan, Ministry of Internal Affairs and Communications, Government of Japan, www.e-stat.go.jp/en/stat-search/files?page=1&layout=datalist&toukei=00200521&tstat=000001136464&cycle=0&tclass1=000001136466&tclass2val=0 (accessed on 12 January 2024).

[22] MIC (2016), 平成28年度　情報通信白書 [FY 2016 Information and Communications White Paper], Ministry of Internal Affairs and Communications, Government of Japan, www.soumu.go.jp/johotsusintokei/whitepaper/ja/h28/pdf/n5300000.pdf.

[7] MIC (2011), “Part 1 Information and Communications in the Aftermath of the Great East Japan Earthquake”, 2007 WHITE PAPER Information and Communications in Japan’, Ministry of Internal Affairs and Communications, Government of Japan, www.soumu.go.jp/johotsusintokei/whitepaper/eng/WP2011/part1.pdf.

[8] MIC (2011), “東日本大震災における通信の被災状況、復旧等に関する取組状況 [The state of communications damage caused by the Great East Japan Earthquake, and the state of recovery efforts]”, Ministry of Internal Affairs and Communications, Government of Japan, www.bousai.go.jp/kaigirep/kentokai/kinoukakuho/2/pdf/1.pdf.

[17] MIC (2009), “我が国の情報流通量の指標体系と計量手法に関する報告書 [Report on the index system and measurement method for the volume of information distributed in Japan]”, Ministry of Internal Affairs and Communications, Government of Japan, www.soumu.go.jp/main_content/000030652.pdf.

[16] MIC (2008), “ユビキタス化による地域経済成長に関する調査報告 [Research Report on Regional Economic Growth as a Result of the Progress of Ubiquitous Networks]”, Ministry of Internal Affairs and Communications, Government of Japan, www.soumu.go.jp/johotsusintokei/linkdata/other033_200803_hokoku.pdf (accessed on 12 January 2024).

[13] MIC (2007), “Chapter 1: Progress of Ubiquitous Economy and Global Expansion”, in FY 2007 Information and Communications White Paper, Ministry of Internal Affairs and Communications, Government of Japan, www.soumu.go.jp/johotsusintokei/whitepaper/eng/WP2007/chapter-1.pdf.

[1] NISC (2024), National Center of Incident Readiness and Strategy for Cybersecurity, www.nisc.go.jp/eng/index.html (accessed on 11 January 2024).

[3] NISC (2022), The Cybersecurity Policy for Critical Infrastructure Protection, Cybersecurity Strategic Headquarters. Government of Japan, www.nisc.go.jp/eng/pdf/cip_policy_2022_eng.pdf (accessed on 11 January 2024).

[5] PwC (2017), Dependence of the European Economy on Space Infrastructures: Potential Impacts of Space Asset Loss, Publications Office of the European Union, https://doi.org/10.2873/81127 (accessed on 11 January 2024).

[9] Vittori, D. et al. (2022), “Identifying the costs caused by an irreversible deterioration of the orbital regimes”, in Earth’s Orbits at Risk: The Economics of Space Sustainability, OECD Publishing, Paris, https://doi.org/10.1787/74213960-en.

Notes

← 1.  The authors conducted international research through literature reviews and interviews, mostly in France and the United Kingdom.

← 2.  The three ministries are as follows: the Ministry of Justice, the Ministry of Finance, and the Ministry of Health, Labour and Welfare in Japan.

← 3.  A geostationary orbit (GEO) is a circular geosynchronous orbit 35 786 km in altitude above Earth’s equator following the direction of Earth’s rotation. GEO satellites seem stationary from the ground, and due to their high altitude, three satellites can cover the whole world, excluding the polar regions, which are utilised for fixed and mobile communications.

← 4.  Non-geostationary orbits (NGSO) generally refer to those that are closer to Earth than GEO, such as a low earth orbit (LEO) below 2 000km. Therefore, non-GEO satellites offer less transmission latency than GEO satellites, have less terminal output, and can be smaller and portable, making them ideal for mobile communications.