Blue Marble image of the Earth taken by the crew of Apollo 17 on Dec. 7 1972.
Image Credit: NASA

Last week the World Economic Forum published a report entitled ‘Amplifying the Global Value of Earth Observation’. The report, produced in conjunction with Deloitte, certainly has eye catching headlines indicating that by 2030 the Earth Observation (EO) industry is projected to be worth in excess of $700 billion, have driven $3.8 trillion in economic benefit in the preceding seven years, and contributed to the reduction of 2 gigatonnes of greenhouse gases each year.

The report focuses on both the economical value of the industry and greenhouse gas reduction, and it was the latter element that piqued our interest. The report starts with a 2023 baseline stating the EO industry was worth $266 billion, having grown twenty one percent between 2021 and 2023. The period of seven years from the baseline was used because many climate change initiatives such as UN Sustainable Development Goals, Global Biodiversity Framework, Paris Agreement, etc., are due to culminate in that year. As EO can support the delivery, and monitoring, of these initiatives, it is believed these would drive growth.

Economic Value

Positively, for companies like Pixalytics, downstream user activity is likely to be the economic multiplier for the industry, with the report noting that for every 1% increase in downstream user activity, an additional $9.8 billion in value can be added! The key growth areas will Asia Pacific, Africa, and South America, as Europe and North America are expected to have steady growth.

The industries that the report believes will be able to benefit most from EO are not exactly ground-breaking, as they are:

• Agriculture
• Electricity and utilities.
• Government, public and emergency services.
• Insurance and financial services.
• Mining, oil, and gas.
• Supply chain and transport.

Over the years we’ve had discussions, negotiations, projects, and contracts in many of these sectors, and we would agree with the opportunities. The business models and turning interest into economic value is more challenging, particularly for SMEs.

Climate value

This report highlights the multiple value propositions for EO to support climate and nature by:

• Using EO to determine actions that directly mitigate greenhouse gas emissions, for example, monitoring and reporting methane emissions that can help identify gas and oil pipeline leaks.
• EO helping provide the data for business cases towards climate adaption.
• EO being used to measure the impacts and benefits of actions on nature and climate, such as monitoring the loss of mangroves.

The former of these value propositions offer direct climate benefits and are estimated to have the potential to reduce over two billion tonnes of carbon dioxide entering the atmosphere, equating to 3.8% of current global annual emissions. The benefits of the latter two propositions are economic and are within those figures. The fields where the report believes the greatest possibilities for growth are:

• Environmental impact monitoring.
• Vulnerability analysis.
• Supply chain monitoring.

Commercial Strategies

The report highlights three strategies to maximise the global impact of EO value, and notes to deliver these will require sustained multi-disciplinary collaboration.

• Improve end user awareness – The report suggests this can be done through Governments, civil society organisations, & academia promoting the benefits, and the EO industry itself should acknowledge the gaps and limitations of the field. The industry has been trying to address this for decades. We all know EO was, and occasional still is, oversold and responsible companies have fought against this.
• Enable innovation with open standards, data, and solutions – This strategy we wholeheartedly support, and regular readers will know that we are involved in work on open standards and solutions through the Open Geospatial Consortium. The data issue is a key one for commercialisation, because of the restrictive data use licences operated by commercial data providers – i.e. you never buy the data and you have to pay more depending on many uses you want to put it to, or how clients you want to share it with. Compare this with buying, or hiring, a piece of equipment for the business that can be used for anything you need; the minimum purchase area requirements making buying data to monitor small areas unaffordable; and the having to pay more to have less processed data or more spectral bands as you needs don’t meet the data the provider is offering.
• Continue investment to advance EO technologies – This is something the EO sector has done, and will continue to do, whether this is new satellites, new sensors, new applications, new algorithms, use of machine learning and artificial intelligence, etc. This blog regularly highlights these developments as they occur.
• Focus on equity in access to EO insights – This is about ensuring that EO data is as accessible possible both technology wise and geographically, and again we’d support this strategy, and it builds on the open standards strategy in bullet two.
• Provide solutions, not pixels to reach new customers – Data is great, but customers want the value-added services that benefit them and their business – to a degree the fact that the data comes from satellites is almost irrelevant. This is something that we strive for within Pixalytics. We also have to recognise that the ‘EO experts’ may be in the middle of the supply chain, as the organisations doing the last mile of the selling can often be domain experts. So, the customer for EO is not the end user of the derived value.

 Conclusion

This is an interesting report, but like other reports we’ve seen over the years, the headline figures on industry growth are impressive. However, the delivery of these economic value, particularly for SMEs, is challenging. It will be interesting to see how the industry develops over the next seven years.