What ‘commercial space’ really means depends on who’s buying — and why

ORLANDO, Fla. — Governments on both sides of the Atlantic routinely say they are “going commercial” in space, but a new study argues that the phrase has become so elastic it risks obscuring what public agencies are actually buying, and why.

A report published Jan. 28 by the European Space Policy Institute and Aerospace Corporation’s Center for Space Policy and Strategy examines how the United States and Europe define and use commercial space procurement in practice. Its conclusion is that “commercial” has become a catch-all term applied to everything from open-market data purchases to government-anchored development programs where the state remains the only customer.

Both the United States and Europe are expanding their reliance on private space companies, and the report finds that they are doing so for different reasons and through different procurement cultures. U.S. agencies have increasingly used fixed-price contracts and competition to push cost and technical risk onto industry. European governments more often pair commercial language with strong public control, motivated by industrial policy, sovereignty and strategic autonomy.

The report argues that ambiguity around what is meant by commercial can lead to mismatched expectations, inefficient program design and missed opportunities for industry. In some cases, policymakers expect market behavior from programs that are still structured like traditional government developments. In others, companies are asked to shoulder risk without access to a broader customer base that would make that risk commercially sustainable.

Multiple definitions of ‘commercial’

The report attempts to bring clarity to what governments mean when they say they are “going commercial” in space.

It divides commercial procurement into three categories. “Commercial-Lite” programs leave the government bearing most of the cost and risk, even if industry plays a larger role than in past bespoke developments. “Commercial-Led” programs shift more design authority and risk to companies but rely on government support such as milestone payments, infrastructure access, or guaranteed demand — to de-risk development. “Purely Commercial” efforts, which the authors note are still relatively rare in space, involve governments buying off-the-shelf services that companies already sell to other customers.

In Europe, it examines programs such as IRIS², Copernicus data purchases and military satellite communications, finding that many initiatives described as commercial still retain strong public oversight. In the United States, the report looks at NASA’s commercial crew program, NOAA’s commercial data buys and Pentagon satellite constellations, where fixed-price contracts and competitive awards are used more aggressively to shift risk onto industry.

The report ultimately pushes back on the idea that “going commercial” is a single, coherent strategy. Without clearer definitions and better alignment between policy goals and contract structures, the authors warn, governments risk misjudging outcomes and overstating how market-driven their space programs really are.