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1 This Document is in DODIS ESA/C(2006)99 Paris, 29 September 2006 (Original: English) EUROPEAN SPACE AGENCY COUNCIL Draft ESA Long-Term Plan Summary The ESA ten-year Long-Term Plan (LTP) is the result of a process put in place according to Council s instructions in the Resolution on the evolution of the Agency s financial, budgetary and industrial policies, adopted on 17 June 2004, and in the Resolution on the Financial Regulations, adopted on 21 June The process aims at providing the Agency and its stakeholders with a tool for planning and managing ESA's financial resources over a ten-year period, consistent with the European Space Policy and European Space Programme and with the priorities and measurable objectives derived there from. Following the presentation of the draft ESA Long-Term Plan as a background document to the December 2005 Council meeting at Ministerial level with subsequent revisions presented to Council in mid-december 2005 and March 2006, the present document provides Delegations with a draft Long-Term Plan for consultation. With a view to submission for endorsement at the December Council meeting, this document reflects progress achieved in the elaboration of a European Space Policy and includes a new section on the Agency s evolution, revised financial tables and the introduction of Integrated Applications based on systems of systems as a new sectoral domain. It covers in particular: the priorities and objectives of Member States, providing the basis for ESA-proposed future programmes within demand-driven roadmaps, correlated internal policies regarding the evolution of the Agency, the definition of an initial set of performance indicators, as tools supporting the assessment of LTP implementation, the corresponding financial planning information (income vis-à-vis expenditure) Required action Delegations are invited to comment on this draft

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3 page 3 Table of Content 1. Purpose of the LTP Background and context Analysis of the international context Analysis of the European context Long-term strategic objectives and priorities Evolution trends and context The development of a European Space Policy: major strategic guidelines ESA s long-term strategy in the context of the European Space Policy ESA policies implementing the strategic guidelines within the overall European space policy Scientific Policy Industrial policy Technology policy Space promotion policy International relations Policy on internal effectiveness Programmatic plans Introduction Mandatory Activities: Scientific Programme Mandatory Activities: Basic Activities Human Spaceflight, Microgravity and Exploration Programmes Earth Observation Programmes Telecommunication Programmes Navigation Programmes Integrated Applications based on Systems of Systems Launchers Programmes Technology and ground infrastructure Assessment of LTP implementation Definitions and objectives of Key Performance Indicators (KPI) KPI linked to strategic, programmatic and financial objectives Long-term Financial Plan Acronyms... 62

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5 Page 5 1. PURPOSE OF THE LTP As foreseen in the Resolution on the Financial Regulations (ESA/C/CLXXIX/Res.7 (Final) adopted on June at the 179 th Council meeting, and as further described in the document outlining the main features of the flexibility mechanism and budgetary planning process (ESA/AF(2005)38, rev.4 dated 10 June 2005), the Long-Term Plan covers objectives, programmatic guidelines and correlated financial resources for a period of ten years. It represents the primary tool for planning and managing the strategy of the ESA Member States for Europe, taking due account of the need for the Agency to further adapt its policies and internal management processes and link the implementation of the LTP to measurable objectives via the introduction of performance-related external and internal indicators. It contains four main components: the priorities and objectives of Member States in line with the European Space Policy providing the basis for ESA-proposed future programmes within demand-driven roadmaps, the correlated internal policies regarding the evolution of the Agency, the identification of an initial set of performance indicators, as tools aiding the future assessment of LTP implementation, the corresponding financial planning information. Accordingly, it is prepared on the basis of: the ESA/EU process sustaining the definition of a European Space Policy and European Space Programme, the available forecasts over a period of ten years for contributions from Member/participating States and the best estimates of income other than from contributions, the expenditure forecasts over a period of ten years derived from ESA s strategic planning and corporate control, integrating data regarding already-subscribed amounts and data derived from assumptions on future subscriptions, and aims at: outlining ESA s overall strategy, from the demand requirements to the benefits expected from the proposed programmes and activities, demonstrating the coherence between ESA s overall strategy and its implementation through different programmes and activities, including the Agency s internal evolution, measuring achieved progress on the basis of agreed indicators, achieving the right balance between the best estimate of budget requirements for the implementation of approved/to-be-approved programmes 1 and overall income resulting from Member/participating States contributions and from third parties, assessing the robustness of the financial forecast for approved programmes in terms of providing a sound financial basis for proposing continuation/new/future programmes, thus being a real financial management tool vis-à-vis available resources. It also aids coordination with the European Commission and Member/participating States, providing: 1 The expenditure structure of the LTP comprises: mandatory programmes and activities (approved and to be approved) ongoing optional programmes (i.e. for which a Declaration is in force; for such programmes, the LTP will provide information on amounts subscribed by Member States) future programmes corresponding to new areas of activity (i.e. planned programmes for which there is not yet a Declaration in force)

6 Page 6 structured visibility over ESA s strategic framework (currently accounting for about half of all public resources spent in Europe on space), to aid coordination with EU and national initiatives for the benefit of an integrated European Space Programme making best use of synergies, an overview of financial envelopes per programme domain for ongoing/future programmes and initiatives, an indication of the expected profile of Member/participating State funding, thus aiding the establishment of coordinated assumptions between the parties in their respective corporate planning and control processes; also for this purpose, the financial part of the LTP is drawn up at current economic conditions. The LTP year n to year n+9: aids the issuing of the draft budget for year n and provides the basis for budgetary framework of year n+1, can aid the decision-making process at a Ministerial Council meeting in year n - 1 (if any) by providing an overview of the long-term strategy, of which the next Ministerial Council decisions may represent the short-to-medium term component, is updated at least yearly on the basis of the progress made on its implementation and on the development of a European Space Policy. The LTP will be submitted to Council for endorsement 2 by its December meeting on a yearly basis, starting from Endorsement of a proposal is commonly and informally used to mean placing on record a non-binding position in favour: the endorsed LTP thus provides Council s guidelines for the following years, serving as a reference framework for Programme Boards and Committees, without prejudging decisions by Member States on whether or how to participate in ESA programmes (ESA/C/CLXXI/Res.2 (Final)).

7 Page 7 2. BACKGROUND AND CONTEXT The multiplication of highly competitive space powers and new players in space as well as the launch of major global cooperation initiatives characterises the international environment of space activities. In this context, ESA, the EU and their respective Member States have recently focused on the elaboration of a European Space Policy to be adopted in 2007, thereby responding to the objective of using space as a strategic tool at the service of European policies. Europe s ability to remain highly competitive in technological and industrial terms while continuing to be an indispensable partner in global cooperative projects will thus depend on the consolidation of past achievements and the taking of new programmatic decisions and initiatives Analysis of the international context The global space sector continues to be characterised by heavy governmental investment in space activities, with generally large captive institutional markets, making Europe an exception given its heavy reliance and dependence on the global commercial market. The largest space power remains the United States, with a total government space budget for civil and security/defence space activities of some US$37.3 billion for FY 2006 ($20b DoD and $16.4b NASA). Further sustained commitment to space activities can be expected, largely focused on the US space exploration initiative and homeland security/defence as the two priorities, following the revision of US space policy in NASA s priorities notably involve fulfilling international commitments with regard to the International Space Station, including the continuation and safe retirement of the Space Shuttle in 2010, developing a crew exploration vehicle and achieving a manned mission to the Moon by Russia, despite constrained budgets since the 1990s, continues to carry out the largest number of launches and ranks as the world leader in capturing internationally competed-for launch contracts. Moreover, with the adoption of a new ten-year Federal space programme up to 2015, Russia will raise funding levels in support of the modernisation of existing space systems (e.g. GLONASS) and the development of key capabilities such as a crew space transportation system in support of a future global space exploration architecture. Other confirmed space powers such as China and India, showing continuous growth of their space activities, and Japan, after a thorough restructuring process in its space sector, are in a good position to make significant contributions to global space initiatives and become strong competitors on the commercial market, given their technological skills, and - in the cases of China and India - their huge domestic market for space-based services and low production costs. China has set about mastering all space technologies, including manned transportation systems, and is developing a number of scientific and application satellites for Earth observation, telecommunications and navigation, while India is already at the leading edge of environmental monitoring and has developed a large variety of services driven by demand from its huge population, in particular for education. Beyond this, the number of countries taking part in space activities is growing further with the involvement of countries in Africa (Egypt, Algeria, Nigeria), Asia (Korea), the Middle East (Israel) and South America (Argentina, Brazil, Venezuela). While the various national-level space assets can contribute to global space initiatives, be it in support of a global space exploration architecture or in support of application-driven initiatives such as GEOSS linked to sustainable development or security objectives, the space sector also has strong commercial significance. The heavy drop in activity on commercial markets since 2000, most notably in the telecommunications sector, and the strong showing of emerging space powers have made the competition even harder, with Russia but above all China and India expected to develop strong commercial ambitions on the satellite and launcher markets. Although a slow but steady recovery of the telecommunication sector is expected, Europe must retain its technological lead if it wants to remain competitive. Space revenues globally increased by some 10% annually on average from 1996 to 2004, namely due to the rise of satellite and value-added services. Since 2000, revenues linked to services have been higher in value than those linked to manufacturing activities. The trend therefore indicates that the revenue and value is mostly generated at the end of the value chain in direct contact with the end customer and user, as indicated

8 Page 8 by the steady growth of revenue levels regarding satellite operators and value-added services, rising from $38.6b in 2000 to some $60.9b in Most of the value-added services are linked to the telecommunications sector, with Earth observation and satellite navigation services expected to rise steadily from currently limited levels. New innovative markets may emerge, given recent private initiatives linked to space tourism Analysis of the European context Following the endorsement of a joint Resolution concerning a European Strategy for Space by the ESA and EU Councils in 2000 and the entry of the Framework Agreement between ESA and the European Community in May 2004, close cooperation has taken place between the two organisations resulting in the devising of a European Space Policy and an associated European Space Programme. As planned in that Framework Agreement, the Space Council, a joint and concomitant meeting of the ESA Council at Ministerial level and the Council of the European Union has been convened three times: in November 2004 and June / November Ministers endorsed orientations on various components of a European Space Policy, underlining the importance of the Galileo programme and the GMES initiative, identifying roles and responsibilities, as well as addressing international relations and other implementation principles. Throughout 2006, the joint ESA/EC Secretariat has prepared the holding of several High Level Space Policy Groups discussing draft European Space Policy modules dedicated specifically to International Relations, Enabling Activities, Science & Exploration and Industry Policy. On this basis, it is expected to endorse the European Space Policy at the Space Council planned for May In line with the European Space Policy decided upon, ESA will focus on the preparation of its Council meeting at Ministerial level to be held in the second half of 2008, to ensure the continuation of approved activities and take new initiatives. This effort therefore requires close coordination between the European Commission, ESA and the Member States. The situation faced by the space industry, while depending on the type of activity (manufacturer, operator, service provider) considered, remains in general terms very sensitive to global commercial market variations. Due to the combined effect of the market downturn and /US$ exchange rates, the European space manufacturing industry has suffered significant reductions in turnover and employment levels at all levels of the supply chain in recent years. Revenues linked to the commercial market therefore fell from 2865 million in 2000 to 1645m in 2005, with the loss of more than 5000 jobs over the same period. System integrators are particularly affected, experiencing further job losses of about 13.5% between 2004 and 2005 and a reduction in business of 13.1% LONG-TERM STRATEGIC OBJECTIVES AND PRIORITIES 3.1. Evolution trends and context In the broader international context, the main evolution trends include: the focussing of United States space policy on the exploration initiative and support for homeland security; Russia s development to become a key space partner for Europe besides the US; the strengthening of space powers such as China and India as well as the emergence of new players; the operational demonstration of a system-of-systems approach, with the setting-up of a Global Earth Observation System of Systems (GEOSS); the increase of private initiatives geared to new space markets (space tourism) or traditional ones (launchers). In the European context, the main features are: 3 Source: Futron. 4 Source: Facts and Figures 2006, ASD-Eurospace.

9 Page 9 ESA Member States overall contribution to the Agency not growing, at fixed economic conditions; the current context for the EU and a possible revision of its Financial Perspectives in 2009; the need to federate the demand for space-based services; industrial reorganisation and the need to preserve critical competences (via an appropriate industrial policy within an enlarged ESA). As a consequence, the European Space Policy must take this entire context into account and: ensure that European governments move space up the political agenda; place the emphasis on competitiveness (for current and future products and services) and discovery (to support the knowledge-based economy and also to prepare for tomorrow s competitiveness); make sure that, where Europe cannot be cheaper, it is technically better The development of a European Space Policy: major strategic guidelines The current development of a European Space Policy with an EU dimension - planned to be endorsed in May constitutes the major reference for the Agency's long-term strategy. This means that full consistency between the draft ESP and the LTP will be pursued, and that LTP to be prepared by 2007, will reflect the endorsement of the European Space Policy within the fourth Space Council. The development of the European Space Policy is driven by the consideration that: Space is a strategic component of Europe s future as an enlarged global power with increased strategic influence and as a dynamic knowledge-based society, and Space is a critical tool deployable in support of many European policies: - increasing knowledge, through science and exploration missions improving our understanding of our planet, the solar system and the universe, - economic growth, in particular through innovation and the creation of a highly-skilled workforce, - strategic ambitions, in particular in security matters, - European cohesion, by using technical systems to transmit and disseminate information, but also in terms of the global venture and challenge space represents for Europe; it also provides an opportunity to illustrate and spread European culture and values; - foreign policy and international relations, as space has been a longstanding vehicle for international cooperation - even more so now with the involvement in managing global public policy issues such as the environment, education, health and sustainable development for the benefit of all human beings, whether they be nationals of space powers or of developing countries with Europe having proved itself to be a reliable partner, as well as space being an arena for competition, with Europe a leading contender. Thus, space has to be an integral part of Europe s public policies, in particular within the EU framework. Over the past 30 years, European space programmes, whether conducted on a national or an intergovernmental basis, have enabled countries to build up a strong and competitive space industry, though which is now threatened by weak markets and increased competition, a solid technology base which needs to be strengthened to meet user needs and maintain European industry competitive, scientific leadership and the required infrastructure for accessing space, which is a pre-condition for implementing any European space policy. The main guidelines for the European Space Policy should thus be ensuring the availability and reliability of the space-based services and applications required to achieve Europe s overall objectives, be they strategic, economic, social, cultural, scientific or technological, and improving the daily life of its citizens,

10 Page 10 notably by taking due account of integrated applications in a system-of-systems configuration. These overall guidelines can furthermore be translated 5 into the following detailed general Strategic Guidelines (SG), expanding on the principles outlined in the 2005 Ministerial-level Council Resolution on the Agency s Long-Term Plan for Discovery and Competitiveness 6 : SG 1: Focus on science and discovery, fostering innovation and excellence under a multidisciplinary approach to science to ensure that Europe remains at the forefront, in particular in the space, Earth, physical and life sciences, thus enhancing its global influence on the world scene, the long-term competitiveness of European industry and the safeguarding of highly-skilled European scientific and technical personnel, plus the dissemination of the relevant advances and knowledge to boost existing and new operational applications; SG 2: Consolidate European competitiveness and technological excellence by: a) investing in demand-driven technological fields 7 ; b) promoting specialisation within European industry and standardisation of supply, as a tool to reinforce the European success factor on markets worldwide while generally maintaining at least two European sources for competitive procurement; c) exploring public/private partnership opportunities with private industry and operators whenever commercial exploitation can be envisaged, as a means to involve industry in competitivenessoriented measures; d) minimising production-support measures in favour of a larger effort on technology development, being aware of how vital it is to be better whenever it is not possible to be cheaper, especially for an industrial set-up such as the European space scene, which is strongly dependent on the commercial market; SG 3: Promote and extend the utilisation of space-based infrastructures and services in current and new application domains through a demand-driven approach, in order to enlarge the market served by space technology, progressively aggregate more financial resources from third parties and build up user loyalty to the utilisation and cofinancing of integrated space-based solutions to their needs, thus ensuring the availability, reliability and upgrading of the space-based services and integrated applications required to achieve Europe s overall objectives and improve the daily life of its citizens. SG 4: Ensure the availability and maintenance of European sources, in particular the unrestricted availability to Europe of critical capabilities, components and technologies: ensure unrestricted availability to Europe of critical capabilities, components and technologies, minimise cases of mutual dependence on non-strategic components and further develop/maintain the industrial sources and competences required to develop science, discovery, services and applications, including a broad research and technology base enabling Europe to design, manufacture and operate state-of-the-art space systems, while nevertheless remaining attentive to the need for value-for-money procurement as a major factor in the competitiveness equation. SG 5: Enhance coherence in the development and growth of all European space capacities, ensuring coherence between launcher and other spacecraft development, as well as between technology and userprogramme development, taking advantage of the opportunities arising from combining space-related capabilities and competences in the European space sector; SG 6: Maintain balance in international relations, in particular by attracting non-european partners to cooperate on European initiatives, 8 and by selectively promoting cooperation as a way of sharing development costs as well as reducing production costs, so as to increase competitiveness and profitability, provided that unrestricted availability to Europe of critical capabilities, components, technologies and the 5 The process of generating strategic guidelines is illustrated in section ESA/C/C-M/CLXXXV/Res.1 (Final): Chapter II, Art Including those which are expected to be required for security purposes 8 As has been successfully done with Galileo.

11 Page 11 role of European industry are not endangered; and promote accordingly the regulatory framework required to place Europe on an equal footing with its competitors. These Strategic Guidelines shall serve as an overarching vision, structuring ESA s strategy within the European Space Policy ESA s long-term strategy in the context of the European Space Policy The effective development and implementation of the European Space Policy requires a highly integrated approach geared to the creation of an overall inclusive European architecture of space activities based on the networking of competences, shared use of European facilities as well as coherent conducting of basic research & technology demonstration and the preparation of future application programmes. ESA is called to play its part by responding to the need to effectively set up such an overall architecture. Therefore, the assessment of the ESA long-term strategy in the global context and within the European Space Policy, transcends the specific perimeter of ESA's programmes and has to take into account other intergovernmental, EU and national activities that constitute an important contribution to an overall European Space Policy. With a view to ensuring complementarities and taking into account relevant synergies, the Agency s long-term strategy has to include considerations linked to existing and planned national capacities and activities in Europe, so as to respond in the most effective manner to the strategic guidelines of the European Space Programme while moving towards likely integration within the EU institutional framework in the next decade. Consequently, the assessment of the ESA long-term strategy: a) is based on: an overall conceptual roadmap 9 outlined in Chart 1, the conceptual representation of the ESA strategic framework within the overall European Space Policy shown in Chart 2, leading to the identification of operational domains ranging from enabling tools (technology, access to space, basic activities) to identified end-use domains 10, b) is derived from the SWOT 11 analysis performed at Agency level shown in Chart 3 and further developed at domain level in chapter 5; c) is shown in summary form in the overall roadmap provided in Chart 4. 9 Introduced in ESA-C-WG-M(2005)6 and consistent with the structure agreed between ESA and EU in the 2 nd Space Council addressed in 2.1 and enlarged by the representation of national activities 10 Based on the trade-off between the application of a theoretical model and pragmatism given the existence of an organisation based on directorates, the operational domains are broken down into nine programmatic plans and sectoral roadmaps in section 5. Integrated applications, a special multidisciplinary application drawing on Earth observation, navigation and telecommunications space infrastructure / services and their integration in larger systems of systems is given a dedicated sectoral roadmap. 11 Strengths, Weaknesses, Opportunities, and Threats.

12 Page 12 C-M 2008 Longer-term C-M 2016 TIME European space policy MS, EU, user needs and demand requirements ESA LTP Process ESA technology programmes ESA development and mission and exploitation programmes MS and EU return on investment Other Parallel Governments Developments developments in Europe MS, EU and other intergovernmental organisations development and exploitation programmes MS, EU and other intergovernmental organisations technology programmes Key milestones or decision points On-going ESA activities according to core package of C-M 2005 decisions Related ESA medium term objectives (subject of C-M 2008 decisions) ESA LTP outlining long term objectives (10 year frame), as a major component of the European Space Programme, and integrating other European capabilities Chart 1: Overall Conceptual Roadmap As a major contributor to the establishment of a single European space architecture, the Agency s activities are oriented towards the provision of powerful European solutions in response to identified demand and user needs, by making best use of European products and enabling tools and effectively organising synergies and favouring firstly integrated approaches between ESA programmes and other intergovernmental, national and EC activities, to be complemented by synergies with developments by industry and private operators as well as favouring the optimal integration of space systems within larger architectures encompassing systems-of-systems.

13 Page 13 DEMAND & USERS Multidisciplinary Sciences Integrated Applications* SPACE SCIENCES EARTH SCIENCES MICROGRAVITY SCIENCES EXPLORATION EARTH OBSERVATION* TELECOM* NAVIGATION* *including security END USE DOMAINS OFFER PLATFORMS PAYLOADS TRANSPORT SYSTEMS GND SYSTEMS, INFRASTR. & USER INTERFACE P R O D U C T S (why?) Other intergovernmental EC activities Activities (e.g. EUMETSAT) (what?) ESA PROGRAMMES (how?) National activities (Enablers) S T R A T E G I C G U I D E L I N E S Focus on science & discovery Consolidate European competitiveness & technological excellence Promote & extend utilisation of space-based infrastructures and services Availability and maintenance of European sources and nondependence Enhance coherence and effectiveness in the development and growth of all space capabilities Balanced international relations ENABLING TOOLS (ACCESS TO SPACE, TECHNOLOGY & OTHER BASIC ACTIVITIES) Spin-in/spin-off NON SPACE WORLD Chart 2: Conceptual representation of the ESA strategic framework within the overall European Space Policy

14 Page 14 Overall SWOT analysis at European level Major opportunities O1: Take advantage of international cooperation and act as an indispensable global partner capable of coalition building and exerting leadership in specific sectors O2: Develop and exploit demand-driven multi-use technologies and applications, increasingly taking into account system-of-systems configurations O3: Take advantage of the growing institutional/european Community demand for space products and services, also in the domain of security, as well as of the downstream-application market in Europe reaching critical mass O4: Support overall policy goals outlined in the Lisbon Strategy O5: Increase complementarity between ESA, other intergovernmental, EU and national activities, moving towards a coherent approach in support of the European Space Programme by taking into account available competences, capacities and activities. Major strengths S1: Recognised European scientific and technological maturity S2: Recognised capabilities of European industry and operators, resulting in a significant market share and the excellent reputation of European space manufacturers and operators S3: Excellent reputation of ESA and national space agencies based on past and present achievements S4: Identified and confirmed European ambition to lead European programmes having global reach, while maintaining industry s competitiveness (priorities of the European Space Policy) S5: Wide range and longstanding successful cooperation with international partners. Major threats T1: R&D investment by fast-growing, low-wage powers leading to cheaper space systems and provision of services at lower cost T2: Dependence on non-european sources for critical components, infrastructures and technology in specific segments, aggravated by restrictive rules and regulations (ITAR, shutter control) T3: Uncertainties in major international cooperation programmes, in particular the ISS T4: Limited perception by the general public of the significance of space for improving quality of life. Major weaknesses W1: Budget constraints and low R&D investment not matching European ambitions W2: Absence of an overall roadmap of coordination among all European stakeholders and subsequent sub-optimal exploitation of overall available financial resources and capacities due to insufficient specialisation and characterisation of European and national centres W3: Incomplete regulatory framework with a view to shaping international norms W4: Governance scenario not yet consolidated with risks of suboptimal management structures and insufficient coordination of partly diverging interests and priorities among Member States, ESA, EU and industry W5: Very limited political consensus and low investment in Europewide security and dual-use applications W6: High dependence of industry on commercial markets Strategic guidelines as derived from the SWOT analysis SWOT Factors Strategic guidelines (SG) Objective O1, O4, T1, T3, T4, S1, S2, S4, W1 O2, O3, O4, O5, T1, T2, T4, S1, S2, W1, W2, W2, W3, W4, W5, W6 O2, O3, S1, S2, S3, W1, W5, W6 T2, S1, S2, W3, W5 O3, O5, T5, S1, S2, S3, S4, W1, W2, W3, W4, W5, W6 O1, T1, T2, T3, S1, S2, S5, W3 SG1. Focus on science and discovery SG2. Consolidate European competitiveness and technological excellence SG3. Promote and extend the utilisation of spacebased infrastructures and services in current and new application domains SG4. Ensure the availability and maintenance of European sources and in particular the unrestricted availability to Europe of critical capabilities, components and technologies SG5. Enhance coherence in the development and growth of all European space capacities SG6. Maintain balance in international relations Ensure that Europe remains at the forefront in research, science and innovation Favour the development of a demand-driven multi-use technology portfolio as the backbone for enhancing and maintaining competitiveness in products and services Gradually increase the share of EU and third-party funded initiatives, having particular care to the security field. Ensure and maintain unrestricted availability to Europe of critical capabilities, components and technologies Develop and make effective use of: - flexible supply of launchers - diversified supply of platforms - demand-driven payloads Ensure that Europe cooperates in the fields where cooperation is value-adding and that it is on a level playing-field with other space-faring powers in those areas subject to competition. Chart 3: SWOT and Strategic Guidelines at Agency level

15 Page 15 December 2006 Council C-M 2008 Long-Term C-M 2025 Targets Space Science Earth Science Human Spaceflight Life Science Microgravity and Explorations EO Applications Navigation Space Science Programme Earth Explorer (EE) Missions Manned Transportation Exploration ExoMars ATV & Columbus / ISS exploitation Venus Express Solar B Missions development / operations Preparation and technology development and demonstration Future Missions Chandrayaan Lisa-PF GAIA ADM- GOCE SMOS Aeolus SWARM EarthCare (EE6) EE7 EE8 Jules Verne Astro-F / Corot CSTS preparatory activities Columbus Herschel -Planck Microscope Cryosat 2 Future Manned Contribution to future development programme Vehicle Routine Manned IBDM Spaceflights & operations Moon and/or Mars Exploration inc. Mars Sample Return and moon orbit infrastructure ExoMars Development Operations ATV-4 ATV-2 ATV-3 ATV-5 Segment 1 / Sentinel 1 Design and Implementation S1 S2 S3 S4 S5 GMES Segment 2 security req. Segment 2 operation METOP-A Segment 2 development Eumetsat / MTG & Post-EPS prel. studies & definition MTG & Post-EPS design and development Earth Watch plus Technology development and demonstration METOP-B MSG-3 MSG-4 METOP-C GSTB-v2/A GSTB-v2/B IOV-1/2 (*) Galileo IOV Phase FOC Galileo Operations 2nd Gen. System studies plus Technology development and demonstration 2nd Gen. Dev. EGNOS Operations JWST LISA BepiColombo Solar Orbiter European space science, earth science, life science, and space exploration infrastructure and facilities in operation, plus routine manned spaceflights and operations European EO space infrastructure in place Modernized European GNSS in place Telecommunications Integrated Applications Access to Space ALPHASAT Small GEO Satellite Multimedia and Mobile Interactive Satellite Telecommunication Systems Surveillance of Space Data Transmission System Security / Dual-Use Space Infrastructures Other integrated applications Ariane 5 VEGA Soyuz at CSG NGL AlphaSat Design and Development Technology pre-dev. and Platform Definition Prel. studies plus Technology development Prel. concept, system & architectures studies plus techno. dev. (NewPro) DTS system architecture studies inc a data relay component (P/L on small GEO) Prel. concept, system & architectures studies plus techno. dev. (NewPro) Development Pilot projects Consolidation Development Maiden flight Future Launcher Preparatory Programme Platform & Payload Development & Integration Design & implementation Design & Implementation / Early Demonstrations (**) DTS demonstration in support of GMES (inc. small GEO data relay P/L) Concepts validation / Early demonstrations Integrated Applications demonstration missions Maiden flight Adaptations and Evolutions Evolutions FLPP Continuation (NGL) Operations Operations Operations Development DTS services for GMES applications and other EO applications Development of operational missions Evolved A5 Evolved VEGA Flight demo NGL NGL maiden flight European Telecom space infrastructures in place and increased industry competitiveness Integrated applications based on systems of systems responding to civil and dual use needs European Next Generation Launcher extending improved offer of launchers and competitiveness Technology, Infrastructure and Basic Activities Enabling Technology Demonstration Activities Enabling ground infrastructure Preparation of NewPro PROBA-2 Expert On-going developments and support activities NewPro PROBA- 3 (formation flying) Future technologies Future technologies Future flying demonstrations in programmes European technology portfolio, and ground infrastructure extended to enhance European competitiveness (*) Indicative / Launch scenario still TBD Planned activities Key milestones or decision points (**) assumed in dual launch on A5 Programme extensions Major target for C-M 2008 and future activities Selected launch services Ariane 5 Vega Soyuz Others/TBD Non-selected launch services / best technically fitted launcher from CSG Ariane 5 Vega Soyuz future launches Chart 4: Overall roadmap

16 Page ESA POLICIES IMPLEMENTING THE STRATEGIC GUIDELINES WITHIN THE OVERALL EUROPEAN SPACE POLICY Ensuring the continuous and most effective achievement of its objectives and priorities in line with the strategic guidelines means for the Agency to continuously adapt its policies and also evolve as an organisational entity. Situating the Agency within the strategic framework of an overall European Space Policy in particular (cf. chart 2) entails ESA adapting to new circumstances and opportunities linked notably to the possible multiplication and diversification of partnerships and associated funding sources. This entails the Agency evolving from its traditional customer culture to a wider one that takes account of the need for it to act either as a customer to industry or as contractor with respect to third parties. In this endeavour, ESA will have to define and enter into new partnerships in addition to the strategic partnership which is already in place with the European Community and which will be developed further. While the approach at ESA has traditionally been to rely almost exclusively on Member States funding, this being well supported by a budget-based system, in its search for new space users and their resources for the European space sector, the Agency is having to raise funds from other parties too. This is leading to the need for a cost-based system suitable for providing a variety of services to such users on the basis of relevant internal and external costs. In addition, the demands of continuous cost-efficiency increases, applicable to ESA as well as to all the other stakeholders of the European space community, require the introduction of a cost-based system for its implementation. Against this wider background, ESA has derived more specifically from the six overall strategic guidelines 12 six transversal policies, 13 each following a distinct logic as to its impact on the space value chain: - Scientific policy - Industrial policy - Technology policy - Space promotion policy - International relations policy - Policy on internal effectiveness Each policy is implemented via a set of core actions detailed hereafter, representing actions linked to ESA activities, though aiming to have influence beyond the specific confines of ESA's programmes in support of an effective overall European space architecture. Some actions are already undergoing implementation, others are priority actions to be completed by 2007 or 2008 respectively See section Described below in 4.1 to Actions undergoing implementation are referred to below as UI, priority actions for 2007 and 2008 are respectively referred to as P7 and P8.

17 Page 17 ESA POLICIES IN SUPPORT OF STRATEGIC GUIDELINES Transversal coherence among sciences Enhancement of synergies/complementarities between sciences in space and sciences on ground Enhancement of synergies between sciences and education activities Increase of synergies between science and space applications Enhancement of the European industry s competitiveness Standardisation and procurement policy P7-P8 P7-P8 P7 P7-P8 P7/P8 P7/P8 S T R A T E G I C G U I D E L I N E S SCIENTIFIC POLICY INDUSTRIAL POLICY TECHNOLOGY POLICY SPACE PROMOTION POLICY INTER- NATIONAL RELATIONS POLICY POLICY ON INTERNAL EFFECTIVENESS Rationalisation and networking of competences and valorisation of European assets Optimization of the technology development and utilization process Enlargement and improvement of the technology portfolio Action plan for space awareness growth & stakeholder consultation Development of partnership models Towards the implementation of partnership models Approach consistent with political guidelines at European/national level Implementing actions in international relations/cooperation within ESP Human resources Reform of financial management Interdirectorate reform Continuous improvement of internal communication P8 UI/P8 UI/P8 UI/P7 UI/P8 P7/P8 P7 P7 P7 UI/P8 UI/P8 P7/P8 Evolution and characterisation of ESA centres P7/P8 Chart 5: From strategic guidelines to ESA policies and related implementing actions and priorities It should be noted that the various actions identified above and described in detail hereafter include some already initiated by the Executive during the course of 2006, notably the reform of financial management, and others related to: inter-directorate reform of corporate and risk management, including corporate information systems, Agency-Wide Controlling System (AWCS), project plan and integrated project review, General Budget (GB) reform, rationalisation of procurement actions, optimisation of the technology development and utilisation process.

18 Page Scientific Policy Transversal coherence among sciences Take measures (e.g. common roadmaps) to support coherence among the space sciences, Earth sciences, microgravity sciences (life and physical sciences), including support for the management of integrated databases, taking advantage of action related to the establishment of a High-level ESA Science Advisory Committee (HISAC) Enhancement of synergies and complementarities between space-based and ground-based sciences Define a common roadmap Enhancement of synergies between sciences and education activities Support vocational events relating to training and education Increase synergy between science and space applications Organise transfer of scientific progress to applications programmes 4.2. Industrial policy Enhancing the European industry s competitiveness Establish a process for the continuous and systematic assessment of industrial and technological capabilities within and outside Europe by improving capacities and processes for improved situational awareness and economic intelligence Assessment of current ESA Industrial Policy principles taking into account evolutions in the European industrial landscape and in line with the European Space Policy On the basis of long-term commitments from ESA, EU, other intergovernmental organisations and their Member States, match European Space industry capabilities and programmes needs, rationalising competences among European providers Establish an overall European approach towards procurement through coordination between ESA, EU, other intergovernmental organisations, and Member States in view of the creation of an open European market for space procurements Identify and develop necessary additional instruments (legal, administrative, and others e.g. economic intelligence) for reinforcing the position of the European space industry on the export commercial market Standardisation and procurement policy Establish a map/database of selected European products, technologies and services Identify opportunities to increase standardisation and define an action plan to foster the adoption of standardised solutions and promote their application to European space activities, including ESA programmes, other intergovernmental, national and EC activities 15. The following areas should be considered: o o o platforms, launchers, ground systems and recurrent payloads processes certification 15 As regards national activities, exploring in particular the opportunities arising from implementation of cashflow reciprocity arrangements, and also if so desired under ESA geographical return policy

19 Page 19 Implement balanced outsourcing of non-strategic components for competitiveness, increase and identify opportunities for value-adding extra-european procurement Implement a procurement strategy aimed at reinforcing the competitiveness of European industry, exploiting competitive tendering to the maximum extent while meeting industrial return requirements, provided that competences are preserved and national leadership - where applicable is acknowledged by procurement actions Rationalisation of ESA procurement actions (includes reducing the number of contracts in favour of increasing individual contract size) Rationalisation and networking of European competences and organised utilisation of European assets Develop various models of networking and integrating European intergovernmental, national and EC competences depending on the field of application and on the relevant distribution of existing capabilities Patent support: arrange a systematic review of the patent potential in the framework of ESA activities, raise awareness and provide financial and legal support to small institutes or universities for filing patents applicable to space, even outside an ESA contract (ESA web site as hub function for European Patent Office) Optimal utilisation of European facilities and infrastructures Support for internationalisation of space-based services supply 4.3. Technology policy Optimisation of technology development and utilisation process (technology pull) Develop an overall high-level policy with dedicated action plans for key transversal issues impacting on the technology development and utilisation process with regard to single market, programme scope, non-dependence, single or multiple source, evolution or disruptive technologies, specialisation, standardisation to frame new technology, PPPs, relation to adapted return concept and addressing major drawbacks (with regard to funding levels, dispersed efforts, discontinued action and lack of home market) Establish an end-to-end long-term plan for technology in support of European solutions, also taking into account other intergovernmental, national and EC activities with a view to building up aggregate markets across sectors and across research, development and exploitation Frame the technology harmonisation process so that it can serve as the link between the endto-end technology long-term plan and the implementation of programmes Strengthen internal ESA coordination through appropriate bodies established within the executive with a view to ensure consistency between programmes and with projects Maintain consistency between mission/system and technology through the involvement of users and tailored technology reference and impact studies Support as required the development of complex architectures encompassing a space component within systems-of-systems Extend stakeholder consultation Enlargement and improvement of technology portfolio (technology push) Setting up NewPro exploring the opportunities for equal financial commitment from the European Commission to respond to the new needs and to overcome current operational problems (dispersion, lack of continuity)

20 Page 20 The establishment of specific folders for key technologies, with emphasis on disruptive technologies, and of a strategy for in-orbit demonstration aimed at the completion of the development cycle Technology spin-in and support for the development of ground operation and utilisation technologies Support for the development of dual-use and other critical technologies, also taking into account specific needs arising from system-of-systems configurations Extend stakeholder consultation 4.4. Space promotion policy Action plan for space-awareness growth and stakeholder consultation Actions aimed at raising awareness - for decision-making, among the general public and within end-user communities both inside and outside the space sector - of the range of applications and benefits resulting from the use of space systems o o o education the mass media newsletters, workshops Consultation of all links in the value chain o o space and non-space industry and other entities such as operators, application developers and service providers Continuous dialogue with target user communities (institutional as well as private) Development of partnership models Deepening of strategic partnership with the European Community and related governance Development of new partnership schemes with national and international, public and private, space and non-space entities (public/private and public/public partnerships), including the objective of tying in the investor community Setting-up of an internal plan of action leading to the acquisition of know-how regarding the legal, regulatory, political, financial aspects of such partnerships and to the devising of progressively-standardised models Towards the implementation of partnership models Deepening of single-application initiatives: o o o Navigation (Galileo and its evolution): EC + operators + industry Earth Observation (GMES, Eumetsat): intergovernmental + EC + national public entities Telecom (e.g. AlphaSat concept): operators + industry Promotion of integrated applications initiatives and support for the development of complex architectures encompassing a space component within systems-of-systems (e.g. security: national public partners + EC + EDA 16 ) Short-term: o stakeholder consultation (identify and federate the demand) 16 To be considered in a longer-term perspective.