Monday, March 19, 2018

Measuring Canada's Ability to Scale Small Businesses into Large Corporations

         By Chuck Black

As covered many times in this blog, our largest space and aerospace companies tend to go bankrupt and get picked over by others (Toronto, ON based Avro Canada and Brampton, ON based Spar Aerospace, for example), or reincorporate as US based firms in order to take advantage of the American market (Richmond, BC based MacDonald Dettwiler and Associates) or they get purchased by large, American based corporations (Cambridge, ON based COM DEV International).

The front cover of the March 2018 Impact Report on "Measuring Canada's Scaleup Potential" along with an estimate of companies per one million population in Canada, the US, the UK, Germany and France. Canada's ability to to create companies is average when compared to the other countries on the list. Graphic c/o Impact Group.

They don't generally stay operational or remain Canadian. This is usually perceived as not being a good thing, but the situation persists and not just in aerospace (remember Nortel? Or Research in Motion?).

For example, as noted in the March 19th, 2018 More Commercial Space News post, "UrtheCast will now report Q4 2017 results & host the 2017 year-end investor conference call on April 2nd, 2018," Vancouver, BC Urthecast is currently in the midst of a fiscal crisis caused by the inability to close previously announced financing for its UrtheDaily™ Constellation. The extent of this current crisis might not become clear for another two weeks since the firm has postponed it's most recent public investor conference call until then.

Ottawa, ON based Telesat Canada could also be preparing for a crisis of it's own. As outlined in the March 16th, 2018 post, "Loral warns of possible Telesat legal battle, Xtar restructuring," the New York, NY based Loral Space & Communications (which holds the majority of Telesat shares) is planning to move ahead with a "strategic transaction" involving Telesat, which could spark a legal battle with Telesat's only other shareholder, the Montreal, PQ based Public Sector Pension Investment Board (which owns more of the valuable voting shares).

So what's the problem? According to Charles Plant, the senior fellow with the Toronto, ON based Impact Centre at the University of Toronto, Canada might just be good at starting companies, but not growing them.

A quick reminder that Canada has been obsessing over research and development initiatives for a very long time. As outlined in the April 7th, 1967 Globe and Mail post, "Ottawa hopes to spur research and development through five programs," Canadian industry was "being wooed into research and development as never before," over fifty years ago and not a lot has changed since then. Original graphic c/o Globe and Mail.

As outlined in the March 19th, 2018 Impact Centre post, "Measuring Canada’s Scaleup Potential," Plant and his colleagues at the Impact Centre have put together a useful, eighteen page study, under the same title, which attempts to measure Canada’s startup and scaleup rate and compare that to other countries around the world.

According to the Impact Centre, "there seems to be a shift away from focusing on startups to focusing on those companies in Canada that are scaling. This appears to have been predicated on the premise that Canada has become good at starting companies but is challenged at scaling them to world-class size. "

The report looked at how Canada stacked up against other major regions in the world, such as the US, the UK, France and Germany. It concluded that:
We have a higher startup rate than Germany and France but trail the UK on the same metric. 
We lead all European jurisdictions in terms of scaling rates. 
We report a rate of startup and scaleup that is dramatically lower than the US and, in particular, Massachusetts, California and New York. 
We have lower rates of both startup and scaleup than Pennsylvania, Illinois, and Georgia.

The report also identified a series of potential high growth companies capable of growing to "world class" size:
Based on additional analysis of revenue and employee growth and financing in public or private markets, we identified businesses with the potential to grow to world-class size, but only if they maintain current growth trajectories. 
In total, we identified 50 Canadian companies with over $10Mln CDN of invested capital that were growing at more than 20% a year. This represents 12% of all of the 423 Canadian companies above $10 M in capital.
The full report is available online at and its well worth taking a look at.

The executive summary, for those of us who are too lazy to read the full report, is available online at
Chuck Black.

Chuck Black is the editor of the Commercial Space blog.

US & UK Develop Satellite Servicing Spacecraft; Canada Will Likely Miss the Boat, Again

          By Brian Orlotti

In recent weeks, two space firms have made public their plans for deploying satellite servicing spacecraft within the next two years. These plans highlight another emerging market for the burgeoning commercial space industry. While one of these firms is UK based and the other US based, Canada has a connection with a third player, albeit a flimsy one.

On March 12th, 2018 the London, UK-based Effective Space Solutions (ESS) announced a $100Mln USD ($131Mln CDN) deal with an unnamed customer to dispatch two spacecraft to service two orbiting communications satellites in 2020.

As outlined in the March 12th, 2018 Space News post, "Effective Space reserves ILS Proton rideshare for two satellite servicers," the spacecraft, dubbed ‘space drones,’ will be launched into geostationary orbit on a Russian Proton Breeze M rocket where they will attach themselves to the two satellites.

The space drones, using their on-board fuel, will then take over from the communication satellites near-empty on-board propulsion, enabling them to remain in orbit and extend their lives.

The ESS Space Drone is a 400 kilogram spacecraft (measuring 1m x 1m x 1.25m) that uses a universal docking connector to attach itself to a host satellite and then engages its on-board electrical propulsion to take over the station keeping and attitude control maneuvers from the host’s propulsion system. In this role, the space drone’s duties can include station-keeping, relocation, deorbiting, orbit correction and inclination correction.

ESS also has other roles in mind for space drones. After the launch of the first two space drones in 2020, the company intends to launch up to six new drones annually, servicing low Earth orbit satellite constellations, cleanup of space debris and performing other logistical services.

On March 13th, just a day later, the SpaceLogistics subsidiary of Dulles, VA based Orbital ATK, announced at the Satellite 2018 conference in Washington, DC that its satellite servicing spacecraft, called Mission Extension Vehicle 1 (MEV1), had just passed a critical design review and will be able to launch by the end of 2018.

As outlined in the March 14th, 2018 Space News post, "Orbital ATK unveils new version of satellite servicing vehicle" as part of a deal signed with satellite communications giant Intelsat, the MEV1 will attach itself to Intelsat-901, a communications satellite in geostationary orbit for nearly 15 years that is running out of fuel.

The MEV1 will use its six-foot-long extender to connect to Intelsat-901’s liquid apogee engine nozzle, a standard component, to refuel the satellite. Intelsat has also agreed to lease MEV2, expected to be completed by mid-2020.

Intelsat is leasing MEV 1 for five years, with an option for two more years. With an expected lifespan of 15+ years, MEV 1 can detach itself from Intelsat-901 after the initial five-year lease and service other customers for ten or more years due to its large store of fuel. In geostationary orbit, this would comprise a large market of military and spy satellites. Orbital ATK intends to build five MEVs.

Also revealed at the same conference was the company’s next-generation satellite-servicing concept, dubbed Mission Extension Pods (MEPs). It envisions a spacecraft carrying ten to twelve fuel pods that can be placed on aging or failing satellites with a robotic arm. Each pod could then move its host into a new orbital position or provide it more fuel to extend its life. After the mother spacecraft dispenses all of its pods, it would then become an MEV able to attach itself to other satellites for up to fifteen years.

Orbital ATK aims to deploy MEPs by 2021.

Finally, San Francisco based Maxar Technologies (formerly Macdonald Dettweiler and Associates of Richmond, BC), via its Space Systems Loral (SSL) subsidiary, has entered into a partnership with the US Defense Advanced Research Projects Agency (DARPA) and a second partnership with NASA (via its Restore-L program), to develop a robotic servicing spacecraft for geosynchronous satellites.

These partnerships will likely be the slowest moving, despite the current Restore-L tentative 2020 launch date, because of the government connections through DARPA and NASA, and the paperwork and oversight those connections engender. Of course, they are also likely to be the most lucrative, because of the cost-plus government contracts provided to SSL in order to fulfill the contracts.

Those partnerships and contracts spurred Orbital ATK to sue DARPA in 2017 on the grounds that the US government was unfairly competing with the private sector for the same service.

But as outlined in the July 17th, 2017 post, "Orbital ATK, DARPA, MacDonald Dettwiler, DigitalGlobe & Unleashing the Lobbyists," that lawsuit was ultimately dismissed even though, as can be seen here, there were and continue to be, at least two private companies (ESS and Orbital ATK) currently competing against the DARPA and NASA funded projects.

And while, as outlined in the December 16th, 2016 post, "MDA says No Sale of Canadarm Technology to the US Government in NASA RESTORE-L, DARPA RSGS or "Any Other" Project," this blog finds that claim dubious, so we concede a very slight Canadian connection with Maxar.

Of course, none of the benefits from SSL or from any other on-orbit satellite servicing program currently gearing up, are likely to benefit Canadian taxpayers, no matter what the Canadian Space Agency (CSA) might have promised as recently as 2013.

While on-orbit servicing of satellites is expected to be another lucrative market that can foster the growth of the commercial space industry, it also appears to be another market where Canada has fallen behind.

While US and UK firms prepare to service the heavens, Canada seems ready to miss the boat.

Brian Orlotti.

Brian Orlotti is a regular contributor to the Commercial Space blog.

Friday, March 16, 2018

Looks Like Intellectual Property Issues Were Addressed in the 2018 Federal Budget

         By Henry Stewart

According to leading Canadian full service intellectual property law firm Bereskin and  Parr LLP, at least one portion of Canada's 2018 Federal budget outlined changes to Canada's intellectual property (IP) laws intended to help Canada’s innovative companies utilize IP assets to help grow their company.

As outlined in the March 9th, 2018 Lexology post, "A Radical New Way of Thinking about our Innovation Economy: Canada’s IP Strategy and the 2018 Budget," last year’s 2017 budget included reference to a Canadian National IP strategy, in order to facilitate an "innovation ecosystem" where commercialized IP (including patents, trademarks, copyrights, industrial designs, trade secrets and other items)  assist Canadian firms to grow to scale.

This year's budget allocated financing for the strategy, with "an overall commitment" of $85.3Mln for:
  • A pilot patent collective ($30Mln) or "sovereign patent fund," which, as outlined in the May 19th , 2017 Globe and Mail post, "Canada needs an innovative intellectual property strategy," will address the calls from "innovation experts who understand the critical role of IP in a 21st-century economy."
  • The creation of IP education and legal clinics ($21.5Mln) for "clinical legal education to both train and grow the pool of IP expertise, while at the same time providing much needed IP legal services to early stage companies."
  • The development of IP tools ($33.8Mln) to track the pool of IP available at Canadian research institutions and through funding initiatives, which can be taken over and commercialized by Canadian firms. 
As outlined in the March 1st, 2018 post, "'Patent Boxes, our Canadian Space Agency and the Lack of Real Innovation in the 2018 Federal Budget," IP management is a critical component of growing Canada's innovation economy.

It's good to know that others feel the same. At least some of this message seems to be getting through to the Federal Liberal party.

Henry Stewart is the pseudonym of a Toronto based aerospace writer

Thursday, March 15, 2018

Lauren Southern vs. the UK, the Growing New Media Landscape & Elon Musk Wants a News Service

         By Chuck Black

In the past, this blog has discussed media as it relates to science and the space industry, in articles such as the November 17th, 2013 post, "The 2013 Canadian Space Summit Media Panel," and the February 4th, 2013 post, "Hiding Science Behind Academic Journal Paywalls."

We've also applauded, as outlined in the November 8th, 2015 post, "A New Era for Canadian Space or More of the Same?," when then newly minted Innovation Minister Navdeep Bains fulfilled a Liberal party campaign promise to allow government scientists and experts to comment on their work to the media and to the public, without interference from their political masters.

And we've complained loudly when, as outlined in the September 29th, 2014 post, "No Visas for Russian and Chinese Space Delegates to Attend IAC 2014," the Federal Conservative government under Prime Minister Stephen Harper refused access to senior members of both the Chinese and Russian delegation to attend the 65th International Astronautical Congress (IAC2015), which was held in Toronto, ON from September 29th to October 3rd, 2014.

But the recent refusal to allow independent Canadian journalist Lauren Southern to enter the United Kingdom (UK) to report on UK immigration and the domestic political situation is problematic to all journalists, everywhere.

As outlined in the March 13th, 2018 Independent post, "Lauren Southern: Far-right Canadian activist detained in Calais and banned from entering UK," Southern was denied entry into the UK because, "her presence in the UK is not conducive to the public good.”

Southern is known online for her you-tube videos, and is considered as an independant representative of the growing new media. As outlined on her Wikipedia page:
Lauren Cherie Southern (born June 16th, 1995) is a Canadian far-right political activist, Internet personality, and journalist associated with the alt-right. In 2015, Southern ran as a Libertarian Party candidate in the Canadian federal election. 
She worked for The Rebel Media until March 2017. Southern continues to work independently and publishes videos on YouTube.
To be fair, the reference for Southern's categorization as a "far-right political activist," is from the July 27th, 2017 Canadaland podcast, "Why Lauren Southern Got Banned From Patreon." According to Canadaland:
The Patreon account of former Rebel Media personality Lauren Southern was banned late last week by the subscription-based crowdfunding website, following a lobbying campaign by the UK based anti-extremism charity HOPE not hate. 
“Yes, HOPE not hate lobbied Patreon directly, and they removed everyone connected to Defend Europe (a European based identitarian focused political organization which Southern reported on and was active in, but which was also actively at odds with the viewpoints promoted by HOPE not hate) from their service,” Hope not hate director of communications Nick Ryan told CANADALAND in an email. 
A Patreon representative informed Southern by email last Thursday that her account was being banned because some of her actions were “likely to cause loss of life” but didn’t elaborate further on any specific actions that prompted the ban. 
Patreon is a popular crowdfunding platform used by independent media creators, including CANADALAND (and the Commercial Space blog), that allows “patrons” to pledge support via recurring payments.

Curiously enough, HOPE not hate also has other aspects to its agenda. As outlined on its website, the organization grew out as a response to the gains made by the British National Party (BNP) in the middle 2000's.

HOPE not hate opposed the BNP and eventually took credit for its collapse.

So Southern and HOPE not hate both had agendas and viewpoints to disseminate. Southern simply preferred to state her biases in her editorials, unlike others, who preferred campaigns designed to "defund" and "de-platform" their opponents.

Much of the rest of our current media landscape also comes with an attached agenda.

This includes traditional media outlets such as the CBC, and more alternative outlets such as the Vancouver BC based Universe Today (a competitor to this blog, since we both cover many of the same topics) and Toronto, ON based Rebel Media (where Southern used to work).

For example, its interesting to note how Kent, WA based Blue Origin owner Jeff Bezos gets such wonderful coverage of his rocket company from the Washington DC based Washington Post, which Bezos also owns.

Even Elon Musk might just be looking to get into the media business. As outlined in the March 14th, 2018 Gizmodo post, "Elon Musk Starts Media Business, Possibly Named 'Thud!,' Musk has certainly made suggestions in that area.

In essence, there is nothing wrong with setting up your own media outlet, or bringing a viewpoint to your posts. The problem isn't even when other organizations (like HOPE not hate) with contrary viewpoints seek to compete in the marketplace of ideas in order to advocate and effect change.

The problem occurs when governments, often in response to lobbying efforts from organizations like HOPE not hate, take it upon themselves to censor people like Southern.

When that happens we all need to take note and object.

Otherwise, the freedom to research, assess, develop independent conclusions then speak and subject those conclusions to peer review via publication and exposure to a wider audience, is in jeopardy.

This is what seems to have happened to Lauren Southern.

As journalists and commentators, we need to point this out and object to it, in order to prevent those same surreptitious actions from secretly hanging over the heads of each and every one of us.
Chuck Black.

Chuck Black is the editor of the Commercial Space blog.

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