Small Satellites,
Big Leaps:
How Germany’s Mittelstand Can Close Europe’s Launch Gap
· By Courtney Flynn Martino ·
Global corporate powerhouses such as Volkswagen, BASF and Siemens have long driven Germany’s economy, but the backbone of the country’s commercial success lies in a vast network of small- and medium-sized enterprises known as the Mittelstand. These modest companies, often family-owned and located in smaller towns, have a common goal: to establish a limited scope of work and do it better than anyone else. By identifying minute but essential gaps in the market, companies of 150 people or so can become international leaders. This Mittelstand mindset has given Germany a significant comparative advantage on Earth. It may now be the key to advancing European capabilities in space.
When it comes to dispatching satellites, Europe lags far behind the United States and China. There were 221 orbital launches in 2023, but Europeans were behind just three. Americans conducted 114 (96 by Elon Musk’s SpaceX alone), and the Chinese 67. In terms of commercial launch capabilities, the French company Arianespace is considered Europe’s leader, operating from its Guiana Space Center near the equator. Arianespace’s long-awaited Ariane 6 rocket can carry heavier payloads than its predecessor, the Ariane 5, and is available in two- and four-booster versions depending on mission need. Between the retirement of the Ariane 5 in 2023 and Ariane 6’s first operational flight this past March, SpaceX’s Falcon 9 rocket was the primary vehicle for launching European satellites. Ariane 6 allows Europe to regain some autonomy in the commercial space race, but it alone cannot shoulder the continent’s growing launch needs.
This is where Germany’s Mittelstand comes in. Several smaller German aerospace companies are experimenting with rockets able to carry lighter payloads more cheaply than their competitors can, allowing for a more agile, high-volume European satellite market. Two of these companies, Isar Aerospace and Rocket Factory Augsburg (RFA), have the additional distinction of launch sites closer to home, in Norway for the former and Scotland for the latter. A third enterprise, HyImpulse, is the only one, however, to have completed a successful test launch, in 2024 from Australia. Repeated delays have bedeviled RFA, and Isar’s first flight failed. All three companies, with 125 to 400 employees, may stretch the definition of small- and medium-sized enterprises, but they are nowhere near the size of Arianespace’s parent, ArianeGroup, and its 8,300 employees.
There is significant promise in the future of German aerospace, and the funds to match. In November 2024, the European Space Agency’s (ESA) Boost! program, which supports private enterprise in the European commercial space transportation sector, distributed almost €40 million among HyImpulse, RFA and Isar. It was the third disbursement to the trio since the program was adopted in 2019. In addition, the German government announced in December 2024 an additional €95 million in funding for the three companies, financed in part through reallocating ESA funds. Berlin is the agency’s largest contributor, providing 23.4% of its 2024 budget. This shows that Germany is demonstrating a commitment to advancing European commercial space capabilities at the national and multilateral levels.
The companies have a long way to go before they can regularly and reliably launch satellites into orbit, but their mandate is clear, and they have the financing and the political backing to meet that objective. It is only a matter of time before Germany’s aerospace Mittelstand jumps from startup to lift off.