The changing economics of space and its impact on EU security.

We examine how the rapid transformation of the global space economy reshapes the European Union’s economic position and security environment. We demonstrate how sharply declining launch costs (and the underlying microeconomic model) are generating powerful scale effects that favour large, integrated space actors and enable the emergence of mega-constellations as the dominant market structure. We show how these dynamics make the joint access to affordable reusable launchers and high-throughput satellite manufacturing the key determinants of space-oriented industrial competitiveness, and, in doing so, completely alter the economics of space-based military security. We show how, from a security perspective, the diffusion of large, commercially operated, inherently dual-use constellations alters both resilience and vulnerability. Distributed architectures reduce the effectiveness of traditional counter-space capabilities while incentivising cyber, electronic, and informational forms of conflict. At the same time, next-generation direct-to-cell and sensing constellations challenge state control over information flows, creating new risks for informational sovereignty even among allies. We conclude by demonstrating how Europe's delay in both industrial and governance structures constrain the EU within a “space trilemma” between strategic autonomy, fiscal limits, and technological capability. The central conclusion is that, absent affordable reusable launch capacity and large-scale constellation production, the EU faces a growing risk of long-term economic marginalisation and strategic vulnerability which stems from space-related weakness but risks affecting a wide number of security-related fields. (This paper is co-authored with prof. Alessio Terzi, economist at Cambridge University, and with dr. Giorgia Conte, aereospace and management engineer at Politecnico di Torino, neither of which is ECPR member).