Russia Plans Major Reorganization of Space Industry

The Russian government is embarking on an extensive and complicated reorganization of the nation’s space industry that could see Roscosmos transformed into a state-run corporation that would be in charge of the whole kit and caboodle.

A structural reform of Russia’s space industry will see its numerous enterprises united into five or six large holdings, Federal Space Agency chief Vladimir Popovkin said on Monday….

The draft list of industries to get separate holdings includes orbital spacecraft development, in-orbit operation, guidance systems, scientific research, testing and strategic rocketry, Deputy Prime Minister Dmitry Rogozin said, also on Monday.

The centralization may be taken a step further, with the Federal Space Agency, Russia’s analogue of NASA, transformed into a state corporation that would replace the prospective holdings, Popovkin said….

“The reform of Russia’s space industry is long overdue because the industry is barely manageable now,” Igor Marinin, editor-in-chief of the respected industry publication Novosti Kosmonavtiki, told RIA Novosti.

During the 1990s, when the industry all but lost funding, it grew fractured, with its 130-plus enterprises developing vastly different ownership structures and with many becoming de-facto independent of the Federal Space Agency, Marinin said.

Marinin says that creating the holdings will be a difficult task because many companies provide services to several sub-industries. He also questioned the wisdom of turning Roscosmos into a state-owned corporation, believing it would end any real competition within the space industry.

This last point is interesting. Russia is not very competitive in space outside of its launch industry. Nobody goes to Russia to buy advanced communications satellites; they go there to buy launches for those spacecraft.

The Russian launch industry is now under threat from SpaceX in the United States as well as competitors from China and India. If turning Roscosmos into a state-run corporation chokes off competition, then where will the Russian space industry be in five years?

Russia’s current efforts at improving its launchers are focused on two projects that largely replace existing Soviet-era rockets. There’s Angara, a modular family of rockets whose development began in 1995. The Soyuz light launch vehicle is a scaled down version of the traditional Soyuz rocket that is aimed at small to moderate-sized payloads.

Russian launchers are competitive for now. However, it goes without saying that if SpaceX can actually recover both stages of its Falcon 9 rocket for affordable reuse through propulsive landings, most of Russia’s rockets would become largely uncompetitive. That would be true of most of the world’s launch vehicles.

It’s not certain whether SpaceX will be able to pull this off. It’s much easier to design in re-useability at the beginning than to try to re-engineer it in later. However, suffice to say that there seems to be little in the Russia’s planning to deal with that possibility, or the larger changes taking place in the international launch sector.

More generally, SpaceX represents a larger trend toward commercial space that is being pioneered in the United States. While Russia is moving toward greater centralization of its aerospace industry under government control, NASA is gradually turning more of its responsibilities over to the private sector so it can focus on deep-space exploration.

By the end of the decade, we could see private companies flying astronauts and supplies not only to the International Space Station but to private human facilities launched by Bigelow Aerospace and its competitors. Affordable commercial suborbital flights could be occurring on a daily basis with plans well underway for affordable orbital systems. Freed from the need to focus just on getting to orbit, NASA will be well positioned to once again send humans beyond Earth orbit.

It’s a bold vision that could be easily wrecked by a lack of funding, technological missteps, economic difficulties, or business failures. Efforts to implement it have been nearly blocked by political opposition and fears over the safety of turning over the challenging task of human spaceflight to the private sector.

If this vision comes to fruition, however, it will be because of competition between the likes of Boeing, SpaceX and Sierra Nevada Corporation on the orbital side and XCOR, Virgin Galactic and Blue Origin in the suborbital arena. NASA’s support of commercial space activities — funding hardware for orbital transportation and purchasing suborbital flights, for example — also will have played a vital role. Competition, not centralization, is the key.

Another element to note here is just how much time and energy the Russian government needs to spend dealing with the fallout from the collapse of the Soviet Union. Twenty-one years later, the Russians are still trying to recover from the near-death experience suffered by the space program in the 1990s.

Russian officials not only have to reorganize the industry, they must address serious quality control problems, rebuilt a decaying infrastructure, construct a domestic spaceport to replace Baikonur, rein in endemic corruption, and replenish an aging, bloated workforce with a younger generation of recruits.

With so much energy and money tied up in trying to fix these fundamental problems, it is very difficult to move forward with innovative programs and new approaches. They also will need to do so with an aging workforce that is about to be convulsed by a series of reorganizations, layoffs and facilities’ consolidations. Such actions inevitable damage morale, productivity and organizational cohesion.

Russia’s space industry also lacks the enthusiasm and innovation of youth. I see the results of this daily where I live and work in Mojave. There is a health mix of youth and experience both here and further south at SpaceX in Hawthorne. The grey hairs have the experience, the youth the energy and enthusiasm. If you get that balance right and create an open environment where innovation is welcome, good things can happen.

Not many new workers entered the Russian space industry during the tumultuous 1990’s. And the industry continues to have recruitment problems today. One sign of just how bad things are: the Russian government just announced a 50-percent salary increase for all space workers. The average salary will increase from 37,500 to 56,250 rubles per month. That’s the equivalent of going from $1,200 to $1,800 per month.

It’s little wonder that so many potential employees have avoided the space industry or found employment overseas.

It will be very interesting to see how the Russian reorganization of its space industry pans out in five years. Will it be vibrant and competitive, or suffocated under a regime that values control over innovation?