Japan's Space Venture Challenge [9]Horie-mon declares: Space will surpass the IT industry!! And it will happen in the near future.
The global space business market size was approximately 40 trillion yen in 2019. And it is projected to reach a staggering 100 trillion yen by the 2040s (source: "Sora Hata").
This scale could bring an impact surpassing the IT industry. That said, in Japan today, the typical reaction to hearing "space business" is simply "That's a dream, isn't it? (A hobby?)".
Therefore, this article examines the growth potential of the space business and Japan's potential through the words of Takafumi Horie, founder of the space venture "Interstellar Technologies," which is challenging the small rocket launch business.
It's guaranteed to rewrite your image of space.
Mr. Horie's remarks are based on a talk session held at "FUKUOKA SPACE EXPO 2021" (hosted by Fukuoka Junior Chamber) in Fukuoka City on October 17, 2021. (Text: Dentsu Kyushu Inc., Kei Yamamoto)
<Table of Contents>
▼ Was U.S. information disclosure the catalyst? "That made it easier to enter the space business."
▼The geographical advantage of "missing the east and south." "No other developed nation has such blessed conditions as Japan."
▼ "Unconventional uses" will expand the market."It's the same equation as the internet industry."
▼Space is the ultimate industrial mixed martial arts. "Japan has industrial clusters, giving it a decisive advantage."
▼Rockets go global from the start—not "domestic first, then overseas." Want to work in that kind of environment?
Was the U.S. information disclosure the trigger? "That made it easier to enter the space business."
──What led to the boom in private space business?
Horie: The stagnation of U.S. space development is the root cause. The government had always led the way, but since it's funded by taxes, it can't continue without public interest. The public went to the moon with the Apollo program and thought, "Isn't space enough already?" Then there was the Space Shuttle Challenger accident. The government also found the burden heavy and wanted to shift as much as possible to the private sector, but rocket technology involved security issues, so they couldn't grant permission. Rockets and missiles share the same fundamental principles.
But in this day and age, rocket development is no longer classified technology. So why not open it up to the private sector? That's what makes America remarkable. It's the same with the encryption technology used on the internet – once it spread worldwide, the thinking was, "Let's turn it into a business quickly and boost tax revenue." That's just how America operates. So, they shifted course toward an open policy for space too. That made it easier for companies worldwide to enter the space business.
In Japan, space isn't seen as a viable business yet, but the internet was met with "What's that?" at first too. Give it another year or two, and people will be saying, "Space is apparently profitable!"
A geographical advantage with "open east and south." "No other developed nation has such favorable conditions."
──Why did you start the rocket launch business?
Horie: For example, many Southeast Asian countries want their own observation satellites. But they can't build rockets to launch them. So they turn to Japan. We can secure a lot of orders.
Japan's advantage over other countries is its "geographical advantage." Rockets launch east or south. For geostationary orbits, the south is ideal, especially near the equator. For low Earth orbits, east is better, and higher latitudes are advantageous.
The U.S. changes locations—like "geostationary orbits from California" or "low orbits from Florida/Texas." In contrast, Hokkaido's Tokachi region, where Interstellar Technologies is based, has geographical advantage. Both east and south offer clear skies. This "unobstructed east and south" advantage is unique among developed nations—only Japan has it.
"Non-serious applications" will expand the market. "It's the same equation as the internet industry."
──Beyond rockets, you're also entering the satellite market.
Horie: Smartphones are essentially satellites. The only difference is attitude control. Add reaction wheels and solar panels to a smartphone, and you've got a proper satellite.
In other words, within just a few years, we'll be able to launch massive numbers of satellites using "already existing technology." What changes when tens of thousands, hundreds of thousands of satellites are in orbit? Security and disaster prevention are important, but what will really expand the market are "non-serious applications" like entertainment. It's the same as the internet industry.
App developers will come up with these "non-serious" uses. Take "Pokémon GO," for example. That game was made possible by GPS technology, which pinpoints your exact coordinates from space. It became feasible because satellites became accessible.
Moving forward, as more satellites are launched, satellite-based services will increase exponentially. As an industry, it will become like the internet—no, even bigger.
Space is the ultimate industrial mixed martial arts. "Japan has a concentration of industries, giving it a decisive advantage."
──But does Japan's space industry have competitiveness?
Horie: Japan's automotive supply chain is incredibly beneficial for the growth of its space industry. It ensures rocket strength while reducing the number of parts and achieving lightweighting. That's the technology of Japanese automotive manufacturing.
While the automotive era is said to be shifting to EVs (Electric Vehicles), anyone can make an EV by buying batteries, motors, and computers. It's far simpler than HVs (Hybrid Vehicles) or hydrogen. I even suspect that the EU and China, which currently can't match us technologically, are trying to crush Japanese cars. If that happens, the precious supply chain that underpinned Japan's automotive industry would be destroyed.
Even so, I believe the space industry can absorb a significant portion of Japan's supply chains. Japan has clusters of automotive, shipbuilding, steel, and other industries across the country. All of these connect to the space industry. Rockets and satellites are linked to national security and economic security, so they must be manufactured domestically, with parts also sourced within Japan. We have no choice but to do this as All-Japan.
Space is the "ultimate industrial mixed martial arts." Take special steel technology, for example. Only a handful of countries worldwide can even produce special steel. Japan is a remarkable nation with a century of ironmaking history and robust capital markets. Cultivating the rocket industry is key to preserving this value.
The importance of technological inheritance can be understood by looking at aircraft. In aviation, the US possesses a deep inheritance of know-how, from manufacturing technology to type certification. Japan's aircraft manufacturing history was interrupted for about half a century after the YS-11 (a passenger aircraft manufactured by Japan Aircraft Industries). We intend to keep building new rockets and inherit technology from Japan's industries.
Rocket development isn't "domestic first, then global"—it's global from the start. Want to work in that kind of environment?
──What are the challenges facing Japan's space industry?
Horie: The talent shortage. People often say, "Space is so dreamy, isn't it?" But that implies, "It's a hobby, not a business, right?" People don't realize it's becoming the backbone of a growth industry. That lack of recognition directly translates to recruitment difficulties.
The internet was seen that way initially too. Back when I started my company, I hired part-time workers from the University of Tokyo. One of them said, "This is so interesting, I want to do it forever. I want to quit school and work here right away!" I said, "Oh, sure!" Then a week later, his mother stormed into the office yelling, "I didn't send him to Tokyo University to do this kind of weird job!" (wry smile). Space is just like the internet back then.
Take the IT industry, for example. Because of language barriers, if you start a business in Japan, you typically focus on the domestic market. You launch domestically first, and if it goes well, you expand overseas. But rocket customers don't care where the launch happens, and language is irrelevant. The market is global from the start. Wouldn't you want to work in a place like that?
The great thing about working at a startup is seeing the "big picture." Building a rocket engine from scratch, gaining that bird's-eye view—you just can't do that at a big corporation. People have this preconception that you need specialized knowledge for space, but that's totally wrong. For example, the person building our flight control system used to make iPhone apps. We also have people who love radio, a former ramen shop owner, and our manufacturing lead used to operate machinery at a milk factory.
Thirty years ago, there was no internet, no smartphones, no apps—all we could do was imagine how incredible it would be. Space is the same. You just have to believe it. We've grown from 40 employees to 70 this year, but it's still nowhere near enough! We're short on funding too! But one connection could lead to something powerful. That's why we're always searching for those connections.
《After the Seminar》
Mr. Horie is a famous figure, and I imagine readers each have their own image of him. What struck me from speaking with him was his backcasting perspective and his strong patriotism. His purpose is remarkable: to create new industries by crossing over "traditional Japanese industries" with "the growth field of space," thereby passing on technology.
People tend to be conservative about unknown fields, but if you wait to enter after it's established, it's too late. I believe in the potential of the space industry. What about you? (Yamamoto)
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Author
Yamamoto Kei
Dentsu Kyushu Inc.
Member of the specialized team 'Dentsu Space Lab,' which handles a wide range of activities from collaborations with JAXA to supporting space venture businesses. Around 2005, he met manga artist Leiji Matsumoto, originally from Fukuoka, who was then Chairman of the Japan Space Cadets promoting space education activities. Since then, he has consistently worked under the theme of "making space a reality for business." Even now, alongside diverse client work unrelated to space, he dedicates equal effort to space-related endeavors, actively focusing on marketing support for food and agriculture utilizing satellite data.
