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maltatoday WEDNESDAY 25 APRIL 2018 11 Business Today www.creditinfo.com.mt info@creditinfo.com.mt Tel: 2131 2344 Your Local Partner for Credit Risk Management Solutions Supporting you all the way The space economy takes off The recent wave of technological innovations springing from the Fourth Industrial Revolution has opened up a huge opportunity in the space economy. Decreasing costs and a relatively open com- petitive fi eld could mean huge growth; however, as a panel at the World Economic Forum Davos meetings this past January dis- cussed, there are a number of po- tential pitfalls that could slow or even halt the growth of the space economy. The experts outlined the need for public-private collaboration, the innovations on Earth that have placed humanity on the threshold of this new frontier, and the possible downfalls the industry still faces. Here are the key takeaways. Public-private collaboration is the best way to foster growth in the space industry. The public sector may facilitate the growth of the space economy by building its infrastructure and absorbing some of its initial risk. If the private sector attempts to step into this role, the private and public sectors will block each other and slow progress. The government plays an imperative role in growing the space economy by driving demand, building infrastructure, and absorbing risk. Government agencies such as the Pentagon and NASA funnel large amounts of funds into the space industry. Governments may also facilitate industry growth by actually creating the initial infrastructure, which the private sector can improve and build upon. For example, NASA jumpstarted the US space economy. By taking it upon themselves to build the initial infrastructure, governments absorb the risk that would be untenable for private businesses. Luxembourg may serve as an example of successful public- private collaboration in the space economy. In the 1980s Luxembourg's administration decided to invest a large portion of the national budget to aid its private companies working in the space economy. Since then, Luxembourg has become a leader in the industry. The current wave of progress in the space economy is a product of technological innovations on Earth that have allowed data collected in space to be used to a fuller potential. The existing satellite technology in near space, which drives a large portion of the space economy, produces huge torrents of data that, until recently, Earth has lacked the technology to put to use. The Fourth Industrial Revolution, however, has led to new data analytics technology that can put the data to use. Existing satellite and monitoring technology in Near Space has recently been matched by data analytics technology on Earth. Specifically, advances in computer science have fostered the development of machine learning algorithms that can process and decipher the torrents of data being collected by satellites in orbit. The newfound ability to use the data being collected from space is driving demand in the space economy. With machine learning algorithms space can be used to scale up initiatives on the ground. For example, data from Earth monitoring systems, like GPS, have allowed organisations to make progress on initiatives to combat human trafficking and fight disease outbreaks on a larger scale. Space is not just for industry giants. As technology improves, the cost of investing in the space economy will fall dramatically. Although it will still be expensive, smaller companies will gain a much more advanced ability to run data analytics and Earth monitoring, while making capital gains on investments in a growing industry. Regulations are needed to avoid the existing pitfalls that could harm the space economy. Increasing space traffic, high risks, disreputable investing schemes, and risk to human lives all represent potential threats to the space economy that require government regulation. As space programs become more feasible for more actors, both public and private, new regulations will be needed to avoid conflict. Similar to how the airline industry developed, as more actors take advantage of falling costs to invest in the space economy new regulations will be needed to ensure safety and avoid conflicts. The high risks and costs associated with the space industry make regulation imperative. As more and more satellites are launched into Near Space the potential for collision will increase, leading to debris that could destroy satellites uninvolved in the collision. Lack of regulation and the clogging of space could hurt the industry in the long run. The prospect of space travel is intoxicating for many investors. The increased feasibility of space may trigger an avalanche of capital. The combination of an abundance of capital and a lack of regulation will make it more likely that investors will get caught up and invest in bad companies. Moreover, if a large, established company fails, it could trigger a cascading effect that impacts the entire economy. As space costs fall demand for human travel to space will increase. There are no current regulations to control human beings travelling to space with private companies. Despite this, space travel is and will continue to be a high-risk activity. There must be policies in place to prevent major catastrophes. Confi dence among business leaders in Germany fell back in April, a closely-watched sur- vey showed yesterday, as ex- ecutives responded to a broader clouding-over of the global economic outlook. The Ifo institute's closely- watched barometer lost 1.2 points month-on-month, for a reading of 102.1. April's score was calculated under a new method taking 2015 as the "base" year with a score of 100, where Ifo had previously measured confidence against levels seen in 2010. It also includes Germany's massive service sector for the first time, sharply reducing the weight of manufacturing in the result. "High spirits among German businesses have evaporated," Ifo chief Clemens Fuest said in a statement. "The German economy is slowing down." Looking to different areas of the economy, the mood among manufacturing firms worsened for the third time in a row, although it "remained at a high level," Fuest said. Meanwhile services firms' outlook worsened sharply, driven by a fall in optimism about future business. "Central risks, such as the global renaissance of protectionism or the political stalemate in Italy, continue to weigh on sentiment," commented Joerg Zeuner, chief executive of public investment bank KfW. Nevertheless, "reliable domestic drivers" including higher employment and wages and plans for increased government spending, should keep Europe's largest economy growing strongly this year, he predicted. German business confi dence erodes in April