Between Rules and Competitiveness: Governing the European Space Economy

The rapid expansion of the space economy is transforming regulation from a framework for overseeing activities in outer space into a strategic determinant of industrial competitiveness. Against this backdrop, this chapter addresses a question that remains largely underexplored in the literature: can Europe’s emerging regulatory architecture—particularly the proposed European Space Act and Italy’s new National Space Law—serve as a catalyst for growth and innovation, or does it risk constraining the development of the sector through additional layers of compliance and administrative complexity? Adopting an interdisciplinary perspective that combines international space law, European governance, industrial policy, and market regulation, the chapter advances an original argument: in the contemporary space economy, regulation itself has become a competitive asset. Moving beyond traditional analyses focused on state obligations and legal compliance, it examines how licensing procedures, supervisory mechanisms, sustainability requirements, and public procurement policies directly influence the ability of European companies to innovate, attract investment, scale their operations, and compete in global markets. Particular attention is devoted to the evolving interaction between national and supranational governance, the emerging relationship between the European Union and the European Space Agency, and the delicate balance between regulatory harmonisation and entrepreneurial flexibility. Drawing on comparative insights from the United States, the United Kingdom, and Luxembourg, the chapter identifies the institutional and regulatory conditions under which legal frameworks can function as enablers rather than constraints on commercial development. The chapter argues that Europe’s future position in the global space economy will depend less on the volume of regulation adopted than on its coherence, predictability, and market orientation. By reframing regulation as a source of strategic advantage rather than merely a mechanism of control, the analysis offers a novel perspective on the role of law in shaping the next phase of Europe’s space ambitions and its capacity to compete in an increasingly contested and innovation-driven global environment.